View from the Editor: The problem with free stuff - March 2004  

As a representative of the female gender, I was very interested to hear that leading US collegiate basketball side Notre Dame in Maryland gave away a set of oven gloves to the first 1,000 female fans through the doors of its Valentine's Day game against Seton Hall this year. This was apparently aimed at 'emphasising the place of women in sport'. Which obviously is perceived as being firmly in the kitchen unless oven gloves are now being worn by financially-challenged female goalkeepers that side of the pond.
Personally, I was more attracted by the promise of 'chips [crisps] and salsa sampling' two weeks later following Notre Dame's game against Providence. As a former London Marathon runner, I can appreciate the link between carbohydrate loading and endurance sports. As a woman however, I feel that if I am going to be patronised into attending a sports event through some outmoded stereotyping, then hell, I may as well be offered a free trolley dash around Harrods in the company of David Beckham. Dressed in lycra. (Him, not me. I have eaten too many carbs). I mean, make it worth my while marketers!
The fact that cable company Telewest in the UK is now developing technology that will allow aromas to be pumped out of computers in a kind of 'scratch and sniff' scenario means that Notre Dame and its ilk could surely also embrace a whole plethora of female fans online too? Just keep those virtual deep fried foods wafting out…….calorie free as well in that format - a definite winner!
Anyway, these meanderings as usual eventually lead to the point of this column, which this month is - 'is free stuff a good thing when it comes to sport'? The fact that consumers for example aren't used to paying for content online (who thinks we should start charging for Sport and Technology by the way?), means that sports properties may struggle to monetise their digital offerings.

'Let's have a heated debate'

The subject of free content was one area of debate in a series of roundtable discussion groups that your favourite e-newsletter Sport and Technology hosted on 6 February 2004 in London on the subject of monetising digital sports content. Eagle-eyed readers will also have picked up on that being the theme of a survey we carried out over the last month, key findings of which will be presented this newsletter over the coming months (fragrant thanks to all of you who filled it in). When we have an original thought at Sport and Technology, we certainly make the most of it. Watch out for Monetising Digital Sports Content - The Movie at cinemas soon, followed of course by the box-set DVD and limited edition egg cups.
According to the rights holders, distributors, broadcasters and executives involved in digital sports content production and delivery that were invited to take part in the roundtables (minus their oven gloves), while it may be hard to charge for broadband services, there are opportunities on the wireless side of delivery. "People are used to paying for mobile services so we will continue to see them doing so," said Dan Herlihy from UK incumbent telco British Telecom. Meanwhile, SOTIC director Leo Mindel, whose company produces websites for several rugby properties among others, believes that people aren't going to be willing to pay for sports services online unless payments for them are disguised as part of a package, for example, from an internet service provider. "But isn't that why rights holders are never going to monetise it [the internet] without a media partner?" argued Phil O'Brien, chief executive of sports photo agency Empics.
It is crucial for technology companies to prove to sports rights holders that there's a revenue model that will work said virtual broadcasting company DatAcq's founder Gideon Lloyd. "Because if we can't show them that they are going to make money, then it's a complete waste of time. What we try and do is evaluate the exploitation of the technology. We're looking at the delivery mechanisms that we can engineer and from that determine what rights are available and what value those rights have. And all that needs to be done before we even talk about the technology."
"Technology is just the enabler though," added Simon Rendell, head of the technology department at UK law firm Osborne Clarke, bringing the debate full circle. "What needs to be worked out is how many customers a service will get and how everyone will get paid."

The power of the brand

There was a view presented in the discussion groups that only credible, established brands will have success with online channels. "Brands matter to users whatever platform you're on," explained Paul Wright, managing director of digital sports specialist Aura Sports.
Football (soccer) was discussed as an early mover in the online environment and a sport that will survive in a digital environment certainly at the top league level, according to the participants, due to the sheer volume of content and copious fanbase. But this raised the question, 'will smaller or less popular sports be able to survive online?' Luke Boyle, director of Sport and Technology's parent company ArkSports, believes that some of these sports are cautious about new media, having had their fingers burnt a few years ago during the dotcom bust and it may be a little while yet before they embrace technology again. (He used to work at Worldsport so he knows what he is talking about). Lloyd agreed: "Governing bodies [in the past] have been promised wonderful technologies and solutions that will bring them great riches. They need to have the commercial model proved before they dip their toes in the water."
Herlihy from BT outlined examples where the internet is being successfully utilised by sports at a grassroots level. "There have tended to be two types of sites that have worked," agreed Boyle. "Those with mass content such as provided by the broadcasters and newspapers etc and then also the community channels. With production costs coming down, the smaller properties providing their own video of events is an opportunity."
"Smaller sports often don't have the aptitude to survive online," interjected Terry Blake from consultancy Blakesports, and formerly the commercial director for the England and Wales Cricket Board.
"But if the models are right then any sport can make money," countered Wright. The first basis he argued is establishing whether a sport has a big enough audience. Therefore thank goodness that the web allows mass audiences to be generated.
One sport that has huge potential in the digital space is sailing according to Tony Singh, a sport and media consultant from UK law firm Addleshaw Goddard. Not only is it a sport that lends itself to digital experiences but it is under-represented on television. However, Singh said sailing is an example of a sport that is happy to accept money from the International Olympic Committee (IOC) via its broadcasting partner NBC to keep its sport alive and that there is sometimes little appetite from the federations to build a digital presence. "That's where the danger lies with those smaller sports and it is a dereliction of duty by the IOC that those sports are being encouraged to take the £0.5m [$0.9m]."

What about the future?

Looking ahead, if federations can get their digital strategies right, participation and engagement will be fantastic said the Lawn Tennis Association's commercial manager Andrew Thomas. And according to entrepreneur and consultant Jonathan Sykes, formerly the chief executive of Premium TV and previously the general manager of Sky Sports in the UK: "What sports businesses shouldn't be is bleeding edge. They shouldn't spend oodles on software that will be redundant next year." Sykes believes that big brand broadcasters have benefited the most from technological developments. "Mobile companies meanwhile need to be smart in terms of how they invest their money. If they buy rights they need to have done the maths in respect of their intended coverage generally."
Paul Bristow, managing director of digital sports provider Deltatre Media can see the mobile and broadband markets maturing so that they come down to a limited number of players. "Whether we see BT going into content or Sky into distribution remains to be seen but there will be a handful of major players."

A change of scene

As twilight beckoned, the discussions shifted from the resplendent soft furnishings of the Institute of Directors in Pall Mall around the corner to the cheerleader-waitressed neon-illuminated Sports CafÈ and continued long into the evening. As the beer flowed, our trusty participants became increasingly vociferous, their opinions on new media even stronger, and rather juicily, their stories less discreet. But sadly for you dear readers, the oven gloves I am now about to shackle to my comely wrists will adversely affect my ability to spill any beans other than the tomato-flavoured variety into a Le Crueset saucepan. I find simmering them for three minutes on a low heat with a sprinkling of garlic-flavoured herbs goes down a treat with the neighbours' Rottweiler, Othello.
The Sport and Technology editorial team will however be at SPORTELDubai and will be happy to accept bribes in return for copies of recordings made at the Sports CafÈ that evening. Hopefully see some of you on the beach, sorry, we of course mean in the exhibition area, in mid-March!

Rachael Church - Editor

If you have any comments or feedback on this article or any of the features in Sport and Technology, or have suggestions for future roundtable discussion groups, we would like to hear from you. Please e-mail your comments to editor@sportandtechnology.com

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