Play Nice 2019 Non AFL Admin, Crowds, Ratings, Participation etc thread

[jatz14]

The issue is the Netflix model is still very different to the sports model. As it stands most sports streaming services have get there content from local broadcasters. Very few if any are producing there own content. Even Netflix have had to up prices to cover costs of there own produced shows.

It's only early in the streaming era and platforms have had to offer cheap services to move people away from cable tv. The question is how long is this sustainable for them. Content cost money no matter who delivers the product. Everyone believes streaming will be substantially cheaper than the cable model but reality suggests it may not be long term.

Report in the SMH suggested one Foxtel customer is worth as much as 5 Kayo subscribers. So if people switch to streaming wholesale, at the price they will be willing to pay for streaming, something has to give. Either sports accept a lot less money, or the cost of streaming is going to have to rise.

This will be markedly compounded if the sports market fragments on streaming services, which is almost certain. Kayo is attractive because it has lots of sports, but if it starts to lose them to different competitors? How many subscriptions is the average person willing to pay for?

Pirating was on the decrease, but is now rising again, for this very reason. There is so much good content locked up with exclusive deals. Most people are not going to pay for 4 or 5 subscriptions, if there are only 1 or 2 shows per subscription they are really interested in.

 

[Ned_Flanders]

The issue is the Netflix model is still very different to the sports model. As it stands most sports streaming services have get there content from local broadcasters. Very few if any are producing there own content. Even Netflix have had to up prices to cover costs of there own produced shows.

It's only early in the streaming era and platforms have had to offer cheap services to move people away from cable tv. The question is how long is this sustainable for them. Content cost money no matter who delivers the product. Everyone believes streaming will be substantially cheaper than the cable model but reality suggests it may not be long term.

The issue is the Netflix model is still very different to the sports model. As it stands most sports streaming services have get there content from local broadcasters. Very few if any are producing there own content. Even Netflix have had to up prices to cover costs of there own produced shows.

It's only early in the streaming era and platforms have had to offer cheap services to move people away from cable tv. The question is how long is this sustainable for them. Content cost money no matter who delivers the product. Everyone believes streaming will be substantially cheaper than the cable model but reality suggests it may not be long term.

Don't disagree, which is why I think sports will start looking at less coin for these deals. The value as a loss leader for other shows isn't what it was 10 years ago

 

[deck]

Don't disagree, which is why I think sports will start looking at less coin for these deals. The value as a loss leader for other shows isn't what it was 10 years ago

The AFL are already getting less coin in the current deal from 7. All the extra money came via Foxtel and all 7 had to give up was 1/2 a game. I'm not sure the AFL will walk into the next deal and except not to get at least a inflation increase on what they're getting now.

 

[Ned_Flanders]

The AFL are already getting less coin in the current deal from 7. All the extra money came via Foxtel and all 7 had to give up was 1/2 a game. I'm not sure the AFL will walk into the next deal and except not to get at least a inflation increase on what they're getting now.

I agree that's what they will be expecting, but if Foxtel keeps bleeding subscribers and free to air advertising in general softens, where is the coin coming from?

 

[jatz14]

I agree that's what they will be expecting, but if Foxtel keeps bleeding subscribers and free to air advertising in general softens, where is the coin coming from?

the advantage the AFL will have in the coming era of streaming is, its a marque sport. People will not pay for a streaming service that just offers heaps of second tier sports. A service wanting to break through needs a tier 1 sport, or it will remain a minor player. Its the second tier sports that will really bleed. That said, I think the AFL will do well to hold on to the revenue it has, and increases of the size seen previously are a thing of the past.

 

[Ned_Flanders]

the advantage the AFL will have in the coming era of streaming is, its a marque sport. People will not pay for a streaming service that just offers heaps of second tier sports. A service wanting to break through needs a tier 1 sport, or it will remain a minor player. Its the second tier sports that will really bleed. That said, I think the AFL will do well to hold on to the revenue it has, and increases of the size seen previously are a thing of the past.

We are back to the earlier point though, people will not pay as much for streaming as they do for Foxtel. If they start charging $70 a month for kayo, you think the subscriber numbers will keep rising?

 

[Our Game]

We are back to the earlier point though, people will not pay as much for streaming as they do for Foxtel. If they start charging $70 a month for kayo, you think the subscriber numbers will keep rising?

Yep but Foxtel is bleeding subscribers already and are currently running a massive loss so something has to give or they go under and it looks like Telstra are a wake up and dont want to waste money on propping outmoded Foxtel up.

 

[HavUEvaSeenTheRain]

I agree that's what they will be expecting, but if Foxtel keeps bleeding subscribers and free to air advertising in general softens, where is the coin coming from?

I think Telstra is the key. They have revenue of near $30billion so an extra $1billion (very much the high side) in costs PA to get full rights to AFL, NRL and even EPL ect isn’t out of the question. They could absorb the cost a lot better than anyone else considering they have close to 14 million customers and an extra $10 a month per customer is probably all that it would cost to cover it. They may lose some customers from a price rise if they don’t like soccer, football or League but they gain what they lose from Optus you would think. Plus advertising ect ect would help cover broadcasting costs

 

[jatz14]

We are back to the earlier point though, people will not pay as much for streaming as they do for Foxtel. If they start charging $70 a month for kayo, you think the subscriber numbers will keep rising?

I dont think they can charge $70 for Kayo, but I dont think Kayo can keep all its sports either. Foxtel, with the sports, may be costing $70 a month, but how much of that $70 is going to the AFL, not a lot I think.

If AFL ends up on a platform charging $25 a month, but its the sport getting the bulk of the payment, then they are probably not a lot worse off.

Its the smaller sports that face minimal payments, or doing it themselves via Facebook or YouTube streams that will have the real issue.

 

[Ned_Flanders]

I think Telstra is the key. They have revenue of near $30billion so an extra $1billion (very much the high side) in costs PA to get full rights to AFL, NRL and even EPL ect isn’t out of the question. They could absorb the cost a lot better than anyone else considering they have close to 14 million customers and an extra $10 a month per customer is probably all that it would cost to cover it. They may lose some customers from a price rise if they don’t like soccer, football or League but they gain what they lose from Optus you would think. Plus advertising ect ect would help cover broadcasting costs

Why would they wear the loss?

They already give this content for free, so you are saying they charge more for exactly what they offer today (for AFL and NRL)

 

[Ned_Flanders]

I dont think they can charge $70 for Kayo, but I dont think Kayo can keep all its sports either. Foxtel, with the sports, may be costing $70 a month, but how much of that $70 is going to the AFL, not a lot I think.

If AFL ends up on a platform charging $25 a month, but its the sport getting the bulk of the payment, then they are probably not a lot worse off.

Its the smaller sports that face minimal payments, or doing it themselves via Facebook or YouTube streams that will have the real issue.

Afl wanted to do that previously, but walked away because they don't want to take on subscriber risk. They would rather get a cheque and let a third party wear the risk of falling subscribers.

Also to cover less than half for the current deal, the AFL would need 666,666 subscribers rusted on for a full twelve months. Kayo is here with a full suite of sports. How do the AFL increase this further with only one sport, and SFA on for 3-4 months of the year

 

[HavUEvaSeenTheRain]

Why would they wear the loss?

They already give this content for free, so you are saying they charge more for exactly what they offer today (for AFL and NRL)

So my non factual and with made up numbers answer would be

Say if Optus and Telstra can both provide the same mobile/internet service for say $75 a month. With Telstras huge customer base they could realistically put their price up to $90 and bring in something like an extra $1.5billion PA if they have ten million customers. (They have something like 14 million mobile customers already. Not sure how many plans) they also have options of approaching someone like Netflix. If they have say a current revenue of $100mil than maybe Telstra offer them $150mil for exclusive rights to their content. It could pretty much kill their opposition. With such a huge customer base they don’t need to charge huge amounts ($.50 a day) to cover the costs and it is easy to hide from them considering they need a phone and the internet, compare that to Foxtel

 

[Aussie in exile]

Yet another game the NRL are taking to a NSW country area today.

Can only imagine there is a financial incentive to do so.

The same reason we take games to Tassie

 

[Gigantor]

I sort of get what you're saying, if the desire is merely to maintain, and possibly have small growth, to an existing large customer base, and existing revenues, it might be worth buying AFL content at a premium price.

Just doing some basic maths, at an additional charge to customers of $120 per annum (similar to the Netflix charge of $10 per month), those customers taking up the option of having access to the AFL (if that's the model), would only generate $120 mill per annum if one million customers take up the option.

It might be worthwhile for Telstra to pay double the money it brings in to lock in those one million customers long term, but even in that best case scenario, the AFL is only getting $240 million per annum. For a whiile, you'd be able to add whatever FTA brings to the table, which we know will not grow from where it is now, and steadily decline before it disappears altogether.

Those rough and ready numbers merely show how hard it will be to make up the traditional broadcast revenue in the 100% streaming world.

The large international social media players, to date, have shown zero willingness to pay big dollars for sport. And why should they, their thing is to have people talk about and share sports talk, without them having to pay a cent for it.

 

[HavUEvaSeenTheRain]

I sort of get what you're saying, if the desire is merely to maintain, and possibly have small growth, to an existing large customer base, and existing revenues, it might be worth buying AFL content at a premium price.

Just doing some basic maths, at an additional charge to customers of $120 per annum (similar to the Netflix charge of $10 per month), those customers taking up the option of having access to the AFL (if that's the model), would only generate $120 mill per annum if one million customers take up the option.

It might be worthwhile for Telstra to pay double the money it brings in to lock in those one million customers long term, but even in that best case scenario, the AFL is only getting $240 million per annum. For a whiile, you'd be able to add whatever FTA brings to the table, which we know will not grow from where it is now, and steadily decline before it disappears altogether.

Those rough and ready numbers merely show how hard it will be to make up the traditional broadcast revenue in the 100% streaming world.

The large international social media players, to date, have shown zero willingness to pay big dollars for sport. And why should they, their thing is to have people talk about and share sports talk, without them having to pay a cent for it.

I don’t think they would give the customer the option to pick and choose. I think they would just say for eg pay $90 for Telstra and get your phone, sport (AFL, NRL and EPL. Possibly other sports like NBA or cricket where they have no extra broadcasting costs) and a movie/tv program streaming channel. Or pay say $75 for Optus just for your phone service.
That extra $15 per month people wouldn’t even notice and the beauty of it for them is a household of say 4 ppl could be paying $60 between them (nearly the same as Foxtel) for a lesser service without people even thinking about it because it’s being split up. A very good movie channel is extremely important though considering half the population is female.
Financially it may only be a break even result for Telstra but it’s more about beating the opposition to it because that could be disastrous for them

 

[jatz14]

I don’t think they would give the customer the option to pick and choose. I think they would just say for eg pay $90 for Telstra and get your phone, sport (AFL, NRL and EPL. Possibly other sports like NBA or cricket where they have no extra broadcasting costs) and a movie/tv program streaming channel. Or pay say $75 for Optus just for your phone service.
That extra $15 per month people wouldn’t even notice and the beauty of it for them is a household of say 4 ppl could be paying $60 between them (nearly the same as Foxtel) for a lesser service without people even thinking about it because it’s being split up. A very good movie channel is extremely important though considering half the population is female.
Financially it may only be a break even result for Telstra but it’s more about beating the opposition to it because that could be disastrous for them

I doubt that will happen. Telstra is already seen as somewhat expensive. While AFL is popular, it is still only a fifth or so of the population that watch it to any extent. A large proportion of people have no real interest in sport full stop. Will these people be happy at their phone bill going up by $15 a month, specifically so they can access something they have no interest in?

Personally, my phone company says, bills are going up $15, but great news, you now get soccer, I am looking for a new phone company.

If Telstra hike prices for AFL and NRL, I think they will lose more customers than they gain.

 

[HavUEvaSeenTheRain]

I doubt that will happen. Telstra is already seen as somewhat expensive. While AFL is popular, it is still only a fifth or so of the population that watch it to any extent. A large proportion of people have no real interest in sport full stop. Will these people be happy at their phone bill going up by $15 a month, specifically so they can access something they have no interest in?

Personally, my phone company says, bills are going up $15, but great news, you now get soccer, I am looking for a new phone company.

If Telstra hike prices for AFL and NRL, I think they will lose more customers than they gain.

It’s very possible and that’s why they would need an extremely good version of Netflix to go with it.
I think $15 a week won’t make much difference to people when it’s hidden in a phone/internet bill. Even $10 would probably cover it.
The worry for Telstra is they could possibly lose millions of customers if Optus beat them to it. It would be billions in lost revenue. I think the real key is the female customer though.

 

[Ned_Flanders]

So my non factual and with made up numbers answer would be

Say if Optus and Telstra can both provide the same mobile/internet service for say $75 a month. With Telstras huge customer base they could realistically put their price up to $90 and bring in something like an extra $1.5billion PA if they have ten million customers. (They have something like 14 million mobile customers already. Not sure how many plans) they also have options of approaching someone like Netflix. If they have say a current revenue of $100mil than maybe Telstra offer them $150mil for exclusive rights to their content. It could pretty much kill their opposition. With such a huge customer base they don’t need to charge huge amounts ($.50 a day) to cover the costs and it is easy to hide from them considering they need a phone and the internet, compare that to Foxtel

Current deal is $2.5b over 6 years (off mem)

Your $150m pa is less than a third of this. Where is the rest of the money coming from if telstra has digital exclusivity, and Foxtel budgets are being slashed?

 

[Gigantor]

Current deal is $2.5b over 6 years (off mem)

Your $150m pa is less than a third of this. Where is the rest of the money coming from if telstra has digital exclusivity, and Foxtel budgets are being slashed?

I guess FTA pitches in a bit, for as long as it remains alive.

It underscores that it's going to be an uphill battle replicating these sorts of revenues in a full streaming world.

 

[Ned_Flanders]

I guess FTA pitches in a bit, for as long as it remains alive.

It underscores that it's going to be an uphill battle replicating these sorts of revenues in a full streaming world.

That's it for me. FTA won't be the bedrock anymore (and isn't in the current agreement)

That means we have to be realistic about what we can get from the digital space, and manage spending expectations accordingly

 

[HavUEvaSeenTheRain]

Current deal is $2.5b over 6 years (off mem)

Your $150m pa is less than a third of this. Where is the rest of the money coming from if telstra has digital exclusivity, and Foxtel budgets are being slashed?

Sorry I was making those numbers up. I was talking about a streaming channel for movies/tv shows with those figures, though I’d imagine Netflix is closer to $300-400mil revenue. Telstra would be replacing fox with the TV rights who pay something like $225mil PA so that’s how much extra it would cost atleast plus all broadcasting costs.

 

[HavUEvaSeenTheRain]

AFL or any other Australian sport going alone in streaming could be a disaster imo.

 

[Ned_Flanders]

Sorry I was making those numbers up. I was talking about a streaming channel for movies/tv shows with those figures, though I’d imagine Netflix is closer to $300-400mil revenue. Telstra would be replacing fox with the TV rights who pay something like $225mil PA so that’s how much extra it would cost atleast plus all broadcasting costs.

Telstra don't have the infrastructure to cover the sport, only to adopt providers coverage (they don't have a television production entity)

Telstra subscribers already get AFL streaming for free. It would cost a mint for small subscriber pick up to develop a production company for one sport.

 

[HavUEvaSeenTheRain]

Telstra don't have the infrastructure to cover the sport, only to adopt providers coverage (they don't have a television production entity)

Telstra subscribers already get AFL streaming for free. It would cost a mint for small subscriber pick up to develop a production company for one sport.

There’s no way they would just take on AFL and not NRL so they would have to go the whole hog in broadcasting if they went down that route. Otherwise it would just be pointless.
The only reason they would bother doing any of this is if Optus or another streaming provider try and take the rights from them. Long term even Kayo which is great will make very little financial sense unless the companies push up there subscription prices which in turn would turn customers away.

Telstra is the only company who has a customer base that can really cover the costs in broardcasting and for TV rights. If people have the option of paying a little more and getting a really good exclusive movie/tv show streaming channel to go with exclusive rights to NRL, AFL and EPL for example rather than paying a little less at Optus with no sports and inferior TV/Movie streaming than people would probably go with Telstra and it could work. There just seems no other way sports can make anywhere near the money they are currently from streaming.

 

[Ned_Flanders]

There’s no way they would just take on AFL and not NRL so they would have to go the whole hog in broadcasting if they went down that route. Otherwise it would just be pointless.
The only reason they would bother doing any of this is if Optus or another streaming provider try and take the rights from them. Long term even Kayo which is great will make very little financial sense unless the companies push up there subscription prices which in turn would turn customers away.

Telstra is the only company who has a customer base that can really cover the costs in broardcasting and for TV rights. If people have the option of paying a little more and getting a really good exclusive movie/tv show streaming channel to go with exclusive rights to NRL, AFL and EPL for example rather than paying a little less at Optus with no sports and inferior TV/Movie streaming than people would probably go with Telstra and it could work. There just seems no other way sports can make anywhere near the money they are currently from streaming.

Even with nrl, you need a production company employing ft staff for just nine months. That's a huge cost, for two sports, that they already provide to all their subscribers for free