AFL Media already making a profit

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Mar 1, 2011
2,103
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http://www.theaustralian.com.au/med...-who-fostered-it/story-e6frg9tf-1226475158423

This News Ltd winge piece had some interesting facts peppered throughout:

....soon launched the Dream Team game on the AFL site -- a similar concept but with free access. This may be one of the reasons the Hun's paywall experiment has delivered less than thrilling results and is ripe for "recalibration".

AFL Media invested $5.5 million setting up its operations in AFL House. There are 22 journalists and another 30-odd staff producing news, video and content for AFL and club websites, as well as providing Telstra with content. This is a sweet deal: Telstra pays the AFL $30m a year for streaming rights to games and then pays AFL Media to produce the content. Supported by the AFL's major sponsors, the media operations are profitable in year one and full payback of the investment is expected next year. Clearly, it's good business

Telstra adds $150m for online rights. It provides live coverage via a smartphone or tablet app at $50 a season. It expected about 250,000 downloads, but already has notched up 1.2 million.
 

Stewies Power

Premiership Player
Sep 14, 2011
4,722
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Adelaide
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Can you insert the whole article in here? I'm not a subscriber to The Australian and can't find the article on Google anywhere. Cheers.
 

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Mar 1, 2011
2,103
4,094
Canberra
AFL Club
Adelaide
Other Teams
Central Districts F.C, GWS
AFL turns back on those who fostered it
by: Mark Day
IF you have ever wondered about the destructive power of the internet the ability to challenge and make redundant old business models you need look no further than the relationship between the AFL and the Herald and Weekly Times in Melbourne.
This month, while the big men fly and AFL fans around the nation get their fix of spectacular finals footy, off-field tensions are simmering,
For decades, HWT's newspapers have fostered football with religious fervour. The tabloid Herald Sun, a part of News Limited (owner of The Australian) since 1987, has built its position as Australia's top-selling daily on the back of relentless, forensically detailed and often extravagant football coverage.
It's fair to say the VFL and its successor, the national AFL, owe a large part of their success to the massive promotion of the game provided free by newspapers, led by HWT publications.
So it's understandable that the football-obsessed management and staff of the Herald Sun feel mightily aggrieved at the AFL's actions in setting up its own division, AFL Media, to compete directly with them in covering AFL news and information.

It is equally understandable why the AFL has done it: the future is digital. Where once the AFL relied on newspapers' ability to spread the gospel to millions of fans, the digital environment lets it deal one to one with these customers. The profits derived from this will go straight into its pockets.
A massive, multi-billion-dollar game is being played here. It won't be over one day in September, or in four quarters. At its centre lies the National Broadband Network and the shift in viewing habits away from free-to-air and pay-TV to a new world of infinite choice spawned by the NBN and internet-protocol TV.
First shots in the war between the AFL and HWT ("war" is my term; both sides politely describe exchanges to date as "skirmishes" or "scuffles") were fired in December when AFL Media poached Matthew Pinkney, editor of the Herald Sun's website, to become its head of content.
A particularly bitter aspect of this appointment was that Pinkney had developed the Hun's Super Coach competition, an interactive game for readers to test their armchair AFL skills. Super Coach was a critical part of the Hun's plan to put a paywall on its website, the strategy being that the lure of big bucks and footy would encourage people to pay for an online digital pass.
But Pinkney soon launched the Dream Team game on the AFL site -- a similar concept but with free access. This may be one of the reasons the Hun's paywall experiment has delivered less than thrilling results and is ripe for "recalibration".
The Hun has also landed some tough tackles on AFL Media, saying it lacks independence, is merely a mouthpiece for AFL agendas and bosses, spins yarns to avoid criticism of the AFL and has invented rules designed to hobble newspaper reporters, such as banning all but its own representatives from tweeting from tribunal hearings.
Pinkney rejects this. He says his decision to join AFL Media came after he received assurances he would be able to report independently and without obligation to "preach the company line". He says it is essential for the AFL's credibility that "we tell it like it is".
That hasn't stopped some Hun reporters claiming pro-AFL spin is rife. They point to AFL Media's early release of a recent award winner's name before it was announced at a function to illustrate the inside run given to the site.
Clearly, many in the HWT camp have their noses out of joint by the AFL's assault on their traditional territory, but the man behind the AFL Media strategy, chief operating officer Gillon McLachlan, is keen to play the role of on-field general and off-field pacifier. "It's 100 per cent true that we are where we are through media groups," he says. "We value the role they have played and continue to play and we hope to be partnering with them for the next 100 years. We see News Limited as a partner of ours -- a print partner, but the digital world is a whole new battleground."
AFL Media invested $5.5 million setting up its operations in AFL House. There are 22 journalists and another 30-odd staff producing news, video and content for AFL and club websites, as well as providing Telstra with content.
This is a sweet deal: Telstra pays the AFL $30m a year for streaming rights to games and then pays AFL Media to produce the content.
Supported by the AFL's major sponsors, the media operations are profitable in year one and full payback of the investment is expected next year. Clearly, it's good business.
But under McLachlan's plan, the best is yet to come. The current AFL rights deal involves the Seven Network paying $450m for free-to-air rights in a five-year deal that expires in 2016, while Foxtel contributes $650m for subscription rights and Telstra adds $150m for online rights. It provides live coverage via a smartphone or tablet app at $50 a season. It expected about 250,000 downloads, but already has notched up 1.2 million.
The apps provide mobile live TV. By 2016, with NBN take-up well into its J-curve growth phase enabling wall-sized high definition IPTV viewing, the AFL will be in a position to offer all games live via the internet to individual customers for a per-game or annual fee. While this will inevitably diminish FTA and subscription audiences, with a consequent impact on rights payments, it will deliver a new massive revenue stream directly to the AFL.
Just as the Herald Sun is having its lunch cut today, Foxtel will be the next to feel the pressure.
The AFL anticipates politicians will continue to ensure its games are seen live on FTA broadcasts with an ongoing anti-siphoning regime but clearly sees that by developing its own digital business it can control its own destiny and reap new and higher profits.
Expect the NRL to follow suit.
 

finders

Norm Smith Medallist
Nov 24, 2004
6,070
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I see that the whingeing Mark Day is the "writer" and I use the term loosly.

Of course its News Ltd trying to put the boots in but as we all should know this is the way of the future and the AFL under AD is right at the cutting edge of the new technology.

I predict that in ten years the way their sales are dropping there will be very few print newspapers left and without live sport (thats is if the major sporting codes produce their own games online and sell direct to the public) Foxtel will also struggle to survive.

The AFL will also have a massive bargaining chip to play against all the TV networks free and pay.
 

Smokin

Norm Smith Medallist
Jun 9, 2001
5,024
1,190
Melbourne
AFL Club
Essendon
sometimes you wonder if the news companies/networks realise just how the world is changing around them. It feels like they are totally oblivious.

Would not want to be invested in a traditional newspaper or magazine right now, i know that much.

For TV, I think the next AFL TV rights will have an AFL network type compoent thrown in, perhaps with its own game (exclusive) but viewers will pay a monthly/seasonal premium. The NFL is doing this now - every week there is a Thursday night game excslusive to the NFL network, with the rest of the games being sold to the networks normally.

They could be holding off Monday night games for this reason.
 
Oct 10, 2007
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What we may see in the future is a version of what American baseball do now.

That is, the game will be filmed by AFL media, however the commentary (and additional pre/post game content) will be done by the FTA network (for TV) and also the clubs. (i.e. You log on to the Richmond website and it's call of the game will be from the Tigers point of view).


The only thing that annoys me at the moment is AFL media doesn't spend enough time pumping up the lower leagues. For example, the VFL (run by AFL Vic) has to rely on one paid staff member and volunteers to run it's media coverage* (excluding the ABC TV match of the round).

Wouldn't it be great (since they are running into profit) that AFL media hired some more staff, so they could edit and show highlights of all VFL/SANFL/WAFL games and talk about possible draftees or players at your AFL club making their way back through the system?
 

watts4ever

Senior List
Suspended
Aug 15, 2012
285
93
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i reckon they will in the future because the afl would hate not to be able to control the vfl, the wafl, and the sanfl.
 

1873 United

Team Captain
May 8, 2009
465
334
South East Melbourne
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St Kilda
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Leeds United
The NRL wouldn't have the finance to operate anything like AFL media. Truth be told, the AFL is light years ahead as far as finance is concerned.

It gets under my skin, that, those North of Wagga, can't understand that someone has to be number 2. No matter how much reason you put forward, they can't comprehend.

RL is a good game, and I will never begrudge that, however, don't fob off football because you believe it to be a threat. That view is insular and nothing more.
 

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dblue8

Rookie
Aug 24, 2012
37
7
Brisbane
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Wouldn't it be great (since they are running into profit) that AFL media hired some more staff, so they could edit and show highlights of all VFL/SANFL/WAFL games and talk about possible draftees or players at your AFL club making their way back through the system?

It would be good to see these comps achieve a better media deal. Don't know how much the AFL is really interested in the well-being of these comps - since it doesn't own two of them, but there could be two media options down the track. 1 - The AFL gets directly involved in the financing and production of media for these comps, or, 2. Those media providers losing out in the media reshuffle negotiate directly with these comps in their quest for sport content denied by the AFL.

I doubt the AFL would like to see marketing opportunities arise for these comps that they don't control because we know what happens when a competition gets cashed up through media rights!
 

theRainbowGame

Team Captain
Jul 16, 2012
387
259
Seattle
AFL Club
Geelong
For decades, HWT's newspapers have fostered football with religious fervour. The tabloid Herald Sun, a part of News Limited (owner of The Australian) since 1987, has built its position as Australia's top-selling daily on the back of relentless, forensically detailed and often extravagant football coverage.

Exactly. The Herald Sun built itself ON football. The people wanted football coverage, and so to sell more papers the Herald Sun covered it.



It's fair to say the VFL and its successor, the national AFL, owe a large part of their success to the massive promotion of the game provided free by newspapers, led by HWT publications.

You are in a business as well. You did it to make money nothing else.



So it's understandable that the football-obsessed management and staff of the Herald Sun feel mightily aggrieved at the AFL's actions in setting up its own division, AFL Media, to compete directly with them in covering AFL news and information.

Change is the only constant. Get with the times. The AFL has recognised the need to prepare for the future.



A particularly bitter aspect of this appointment was that Pinkney had developed the Hun's Super Coach competition, an interactive game for readers to test their armchair AFL skills. Super Coach was a critical part of the Hun's plan to put a paywall on its website, the strategy being that the lure of big bucks and footy would encourage people to pay for an online digital pass.
But Pinkney soon launched the Dream Team game on the AFL site -- a similar concept but with free access. This may be one of the reasons the Hun's paywall experiment has delivered less than thrilling results and is ripe for "recalibration".

Is this meant to be a reference to the new fantasy football game on supercoach and AFL.com.au?



The Hun has also landed some tough tackles on AFL Media, saying it lacks independence, is merely a mouthpiece for AFL agendas and bosses, spins yarns to avoid criticism of the AFL and has invented rules designed to hobble newspaper reporters, such as banning all but its own representatives from tweeting from tribunal hearings.

This is the key issue facing AFL media. They need to somehow ensure the public is assured of the independence.



"We value the role they have played and continue to play and we hope to be partnering with them for the next 100 years. We see News Limited as a partner of ours -- a print partner, but the digital world is a whole new battleground."

This. Next five years will change the landscape alot!



AFL Media invested $5.5 million setting up its operations in AFL House. There are 22 journalists and another 30-odd staff producing news, video and content for AFL and club websites, as well as providing Telstra with content.

Does anyone else find that figure a little underwhelming? Id have thought about double that. That figure gives $10,000 /yr salary... or im assuming that salaries have not been counted.



This is a sweet deal: Telstra pays the AFL $30m a year for streaming rights to games and then pays AFL Media to produce the content.

Not a big fan of all these videos being exclusive to telstra.


But under McLachlan's plan, the best is yet to come. The current AFL rights deal involves the Seven Network paying $450m for free-to-air rights in a five-year deal that expires in 2016, while Foxtel contributes $650m for subscription rights and Telstra adds $150m for online rights. It provides live coverage via a smartphone or tablet app at $50 a season. It expected about 250,000 downloads, but already has notched up 1.2 million.

If you are smart....hook up your phone to your TV. You get football on telly for $50 a year.

The apps provide mobile live TV. By 2016, with NBN take-up well into its J-curve growth phase enabling wall-sized high definition IPTV viewing, the AFL will be in a position to offer all games live via the internet to individual customers for a per-game or annual fee. While this will inevitably diminish FTA and subscription audiences, with a consequent impact on rights payments, it will deliver a new massive revenue stream directly to the AFL.

This will be a key development for international growth. No longer will people go without the football overseas. Their subscription will mean that they can watch matches wherever they want.


Just as the Herald Sun is having its lunch cut today, Foxtel will be the next to feel the pressure.
The AFL anticipates politicians will continue to ensure its games are seen live on FTA broadcasts with an ongoing anti-siphoning regime but clearly sees that by developing its own digital business it can control its own destiny and reap new and higher profits.

Foxtel wont really care. Their business plan is ... get soccer popular in Australia so they can broadcast a multitude of leagues 24/7/365. Showing the AFL is only a bridge to that. Also paytv will be moving online as well.


Expect the NRL to follow suit.

Well obviously. The NRL is in a reactive business model atm. AFL does something the NRL reacts. They have no clear direction and will most likely attempt to set up their media department simply because the AFL have.

The Herald Sun have been very much against the AFL all of this year. It is a very bitter and jealous approach by them. Simply because the AFL have been the most advanced organisation and lead the way into the future the Herald Sun is trying to hold them back.
For the Herald Sun I say ... old media is dying face the future. You want to keep making money ... go online and beat the rest.
 

Stewies Power

Premiership Player
Sep 14, 2011
4,722
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||-GOB-||

Team Captain
Sep 19, 2006
545
107
AFL Club
North Melbourne
AFL Media will be good for as long as there is a plethora of other football-focused media.

The danger is that if it can control much of the media based around the league, it can or will go soft without anyone realising.
I think we may be at this point already.

The problem is that once there's no significant AFL reporting outside of Melbourne, let alone Aus.

If the other sports tried this there'd be a plethora of foreign based news sites that fans could rely on for at lest some unbiased articles. This backup doesn't exist for the AFL, and with AD wanting to 'fix' things that don't necessarily need fixing it it doesn't bode well for fans wanting coverage that doesn't fit with the party line.
 

harmesy 37

Premiership Player
Oct 5, 2005
3,192
832
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Carlton
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It doesn't help the Herald-Sun that they have deliberately tried to put football fans's noses out of joint by referring to soccer as "football" and Australian football as "superfooty" or "afl" in their newspaper.

It isn't a good exercise in marketing to your constituents to do this. And their firewall doesn't help either. Both moves only really aggrevate your constituents.
 

Stewies Power

Premiership Player
Sep 14, 2011
4,722
1,924
Adelaide
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Port Adelaide
Other Teams
Aus Cricket Team & F1 Ricciardo
It doesn't help the Herald-Sun that they have deliberately tried to put football fans's noses out of joint by referring to soccer as "football" and Australian football as "superfooty" or "afl" in their newspaper.

It isn't a good exercise in marketing to your constituents to do this. And their firewall doesn't help either. Both moves only really aggrevate your constituents.

Maybe the Herald Sun can refer to soccer as "penalty ball" in future..I notice the marquee game of the EPL -Man U vs Man C was won on the weekend with a late penalty. Do Man U get far more penalties than any other team? From the stats I have seen I would think so as they are a high profile team and therefore deserve double the free kicks of other teams. :rolleyes:
Yep, agreed. News Limited can * off. The Crapvertiser here in SA is a disgraceful publication. Real Footy or the official AFL site is what I use.
 

Warner_Bros_FC

Cancelled
Aug 15, 2010
582
541
AFL Club
Western Bulldogs
It doesn't help the Herald-Sun that they have deliberately tried to put football fans's noses out of joint by referring to soccer as "football" and Australian football as "superfooty" or "afl" in their newspaper.

It isn't a good exercise in marketing to your constituents to do this. And their firewall doesn't help either. Both moves only really aggrevate your constituents.
I find this interesting. They still refer to it as soccer in the printed version. Maybe a bit of a boiling frog scenario.
 

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