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Will Muirhead, CEO of PA Sportev and Bill Wilson, business reporter for BBC News Interactive, provide their views on the recent social networking website phenomenon. Will Muirhead:  “It has taken user-generated content communities, like YouTube, to show the way to web-based business profitability through advertising. But now with the emergence of new technology, like Joost and Blinkx, we may have reached the tipping point in the sports content-generated community space.
Going back a few years, web-based sports content business models failed because broadband was slow to roll out and the best rights were only available after a significant holdback period - sometimes up to 56 hours.
People were also nervous about making the content free for fear of a massive surge of usage and huge resulting bandwidth fees. Bandwidth is now much cheaper and the ad revenues are larger.
Pay is still the best model for live content and delivers significant revenue. It's just that live content is best watched on TV. Clip-based content is ideal for internet and mobile - and perfectly suited to content generated community models. In other words, people talk about and share clips, not 90 minutes.
The mix of licensed content and sophisticated video search technology powering relevant and targeted advertisements is the key to unleashing the true value of online sports video rights. In October 2006, the general industry perception was that Google’s $1.65bn (£0.83bn) acquisition of YouTube could have been this sought-after tipping point.
A marriage made in heaven? The belief was that the combination of the leading search technology with the leading video-sharing site would trigger the business model that proponents of the IP video world had been waiting for: a way to deliver significant value to rights holders without asking the audience to pay!
Google’s ability to associate individuals’ unique and specific desires (via searches) with relevant advertising was producing astonishing results and the extension of this model to online video seemed imminent.
This notion was supported by other key developments in the marketplace. MySpace had grown from 27m users to over 150m users between 2005 and 2007. YouTube had a 43m audience and overall online advertising revenue had hit the $33bn (£16.7bn) mark.
These market movements all pointed toward a move away from pay-per view and subscriber models to a new advertising-driven model for online video.
However, although Google has made a recent announcement about a new video search technology, we are yet to see its keyword-based advertising model extend itself to YouTube’s videos.
In fact, much more focus has been given to the numerous alleged copyright infringements that YouTube is accused of rather than any significant development of its revenue model.” Bill Wilson:  “With sport becoming ever bigger business, its paymaster is no longer the fan at the gate. Instead, it is the media companies paying eye-watering sums for broadcasting rights. And in a market hungry for TV, internet and mobile phone rights sporting rights holders need to make sure they protect their product.
But here the supporters come back into the picture. They may not be underwriting the sports they love through ticket sales as once they did, but in an on-demand, user-interactive, multi-platform era, it is crucial not to alienate the sports fans.
Protection needed Instead, sports have to find ways for fans to feel they are contributing to the news and content. "The increase in user-generated-content (UGC) and social networking sites are one of the major biggest developments we have seen with regard to sporting rights," says Rachael Church-Sanders, editor of ezine Sport and Technology. "At the same time we also have Viacom, Seconds Out and the FA Premier League suing YouTube over footage that has been posted there. Some rights owners will see these changes as an opportunity, while others will see it as a threat."
Many of those worried about UGC turn to firms such as NetResult, which works on behalf of rights holders and takes illegal content off the internet. Its clients include football leagues in the UK, UEFA, Formula One, and the cricket and rugby union world cups. "The most valuable right is live content, but there is also value in clips which can be delivered online or to mobiles," says NetResult chief executive Christopher Stokes. "You also need to protect crests, logos, live data and live scoring, though many are happy to license this sort of material to third parties." Niche sport  However, that kind of licensing does not cover the YouTube factor. The popular video sharing website - and other similar ones - has many sporting organisations, media organisations and rights holders expressing concern at some of the sporting material posted there. YouTube has been named in two high-profile class action cases led by Viacom and the Premier League, which target the appearance on the site of what the claimants' say are "pirated" clips.
Someone else with YouTube in his sights is Robert Waterman, a boxing entrepreneur who owns the website Secondsout.com. He is suing YouTube over a world boxing championship fight between Vladimir Klitschko and Ray Austin that he streamed exclusively on his website in March. But the entire bout was posted on YouTube.com shortly after the fight and could be viewed for free.
YouTube says it will be happy to remove the clips if Mr Waterman sends them the web addresses of the offending clips. But that, he insists, should not be his responsibility.
"The fight was on YouTube within minutes of the end of the fight and it is still up there," he told the BBC at a recent Sport Business Group conference. "Your rights are not being monetised when your events go up on YouTube. I am operating in a large niche sport, and this sort of thing can destroy earning power."
Mr Waterman is also unhappy that another Klitschko fight he broadcast, on 7 July, appeared on YouTube, before being removed by his German broadcasting partners.
A YouTube spokesman said: "We are working with copyright holders across Europe, including with many sporting organisations, to help them exercise their rights, whether they choose to promote, take down or monetise their videos.
"We have met Secondsout.com to explain how they can use the tools we have developed to help rights-holders manage their content on YouTube."
Empowering copyright holders YouTube's owner Google also says it is introducing new measures in the battle against sports rights piracy by developing video clip identification technology for its file-sharing site. It hopes that will allow sports rights-holders to combat unauthorised use of their content.
The new technology could allow rights-holders who form a relationship with YouTube to either take down the clips or monetise them through advertising in a revenue share with the site. It is testing new video fingerprinting technology with Disney, Time Warner, and other media companies, partners and non-partners.
"Our upcoming video identification system will be our latest way of empowering copyright holders, going above and beyond legal requirements," YouTube's spokesman says. Fan attention  However, not all material posted by non-rights holders need necessarily be subject to controversy. Some, after all, is generated by the fans themselves - and forms the source material for sites such as Sportingo, which publishes fan articles and photographs, as well as offering direction to useful sports audiovisual resources and statistics.
However, it is not an unregulated free-for-all, as the site has a team of sub-editors to tidy up articles and ensure there are no copyright breaches.
"We are all operating in a sporting economy which is about getting fans' attention," says Ze'ev Rozov, Sportingo's chief executive. "If rights holders do not pay attention to fans, then someone else will fill the void." But he adds: "We spend a lot of time checking out content. We don't want to break the law."
Still, threats remain for rights holders, such as from peer-to-peer applications.
For example, coverage of English Premiership football matches has in the past been put on peer-to-peer networks and then watched around the world.
No live Premiership matches are yet available legally online anywhere in the world but from 2007/08, Sky and Setanta Sports - who have the UK TV rights until 2010 - will also be able to broadcast them legally on the internet.
The BBC has the rights to stream recorded highlights to UK internet users, while Sky Sports is sending clips to mobiles.
Before then the Premier League hopes to complete High Court actions against three websites unlawfully showing its games online, one of which is a peer-to-peer.”
Bill Wilson’s article, a review of the digital rights management and social networking websites panel at Sport and Technology: The Conference 2007, has been reproduced courtesy of BBC News and was first published at: http://newsvote.bbc.co.uk/1/hi/business/6268854.stm Will Muirhead’s article has been reproduced courtesy of BritSport, the new weekly ezine produced by SportBusiness International. See http://www.sportbusiness.com/ for further details of how to subscribe for this free service.
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