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Bad news for FIFA and Al Jazeera Sport
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Thumbs up Bad news for FIFA and Al Jazeera Sport - 31-May-2010, 22:00

Bad news for FIFA and Al Jazeera Sport

Analysts at Screen Digest have been assessing the FIFA World Cups impact on media markets. According to Sports rights market monitor, a report just published by the media analysts, despite the potential for huge TV audiences and the opportunity to see games in 3D for the first time, the soaring cost of rights has already priced many advertising-supported broadcasters out of the market for the event.

FIFAs policy of licensing rights to the highest bidder on a territory-by-territory basis means that more of the matches than ever before will be exclusive to pay-TV. Theres also very bad FIFA news from the Middle East.

FIFA has sold rights to pay broadcasters in several territories, including Sky Italia, Sky Deutschland, Sogecable (Spain) and SporTV (Portugal), Screen Digest reminds us. Modern Times Group bought Norwegian rights from the public broadcaster NRK, and Supersport in South Africa has bought rights from SABC.

The finals are also 'listed' in many EU countries meaning they can only be broadcast on channels with national coverage. Spain's Sogecable has licensed a package of matches to free-to-air broadcaster Telecinco (including all matches involving the Spain team, which are listed). In the UK, the entire finals are listed and will be shown on BBC1 and ITV1.

This years finals in South Africa are expected to generate at least 1.6bn in TV rights revenues, up from just over 1bn for Germany in 2006 and 789m for Japan and South Korea in 2002. In France, TF1 and M6, who shared the games in 2006, said that they did not expect to recoup the cost of rights and production from the incremental advertising revenues extracted during and around the games. This is why this year TF1 chose to sub-license some games to Canal+ and France TV and M6 chose not to bid at all.

The 2010 tournament will be the first major sporting event to enjoy significant coverage in 3D. FIFA and Sony have formed a joint venture to transmit 25 matches in the format, including all the semi-finals and the final. With few homes equipped with 3D TV sets, Sony will show the matches in pubs, bars and cinemas. BSkyB in the UK doesnt have rights to the World Cup but has already transmitted Premier League games in 3D; one match between Chelsea and Manchester United drew audiences of 100,000 in venues across the country.

ESPN in the US and Spains Sogecable will also transmit matches in 3D live.

But with only days to go before the start of the football World Cup, sales of cards in the UAE that allow television viewers to see all the action remain low, a UAE distributor said last week: "So far, we have sold just under 130 [pre-pay smart cards," a spokesperson for Abu Dhabi Media, the sole distributor for Al Jazeera Sports Channel cards in the UAE, told Arabian Business. "They recently went on sale at 23 petrol stations all over Dubai, as well as at outlets of Target Electronics and Wadi Nada Electronics in Deira, Mirdif, Satwa and Al Twar."

The figure does not include existing subscribers to Al Jazeera Sports, who can upgrade their subscription by visiting the Al Jazeera Sports Channel website.

Meanwhile, a spokesman for Etisalat's pay TV arm E-vision told local press that a deal had been made with Al Jazeera Sports to screen matches, although a channel had not yet been chosen. He added that final details of the arrangement would be made public "within a week".

Al Jazeera has exclusive regional rights to screen one of the world's most popular sporting events.

Existing subscribers wanting access to five specially dedicated channels - including Al Jazeera Sports 3D - will be charged $100 for the upgrade, while non-subscribers will pay $130. Al Jazeera will also broadcast the matches live on new website, which will be created specifically for the World Cup. Al Jazeera Sport says it has earmarked 350 staff for 1,000 hours of 2010 World Cup.

The sheer volume of hype that the event generates especially if a home nations team has a successful run makes the World Cup a major TV viewing event every four years, says Tim Westcott, senior analyst in Screen Digests TV department and the author of the report. Of course, as with all sporting events, the outcome is unpredictable and its a big risk for a broadcaster to commit to showing 64 live matches when the national team might feature in only three of them - or worse - not qualify for the finals at all.

The fragmentation of TV viewing means the mass audiences delivered by traditional terrestrial channels like TF1 or ITV1 are increasingly rare and therefore more valuable when available. Market-leading channels are expected to show the biggest sporting events to maintain their status when facing ad agencies, advertisers and viewers. But the World Cup is not a guaranteed success in terms of ad sales. For instance, in 2006 the UKs ITV1s commercial strategy of auctioning the best inventory completely backfired.

This years World Cup finals are well timed as the advertising market recovers. For many brands - especially those that were cutting back hard last year - the opportunity is simply too good to miss. Some may have already invested enormous amounts to be official FIFA sponsors and saved on advertising by choosing viral supporting campaigns, rather than spending millions to outbid competing brands from the top TV ad spots. But yet again this years Super Bowl in the US has shown that big brands cannot afford to ignore major TV events.

After spending millions on sponsoring football stars and producing movie-quality commercials, advertisers want to maximise reach and repetition: YouTube, social media and online virals are part of the comms mix but traditional half-time ad slots remain the best launch pad to trigger a massive buzz around a brand and its new campaign.

Vincent Ltang, Head of Advertising at Screen Digest, predicts the effect of the World Cup on the overall TV ad market in 2010 will be positive. Sports-oriented brands spend more in these years and other brands do not spend less, they just plan their advertising before or after the tournament to avoid clutter and inflation. Overall we believe the football World Cup will generate an additional 30m to 70m of TV advertising revenue in France and the UK, or between one and two points of incremental growth. While the football World Cup always triggers advertising demand, it is especially good news for the TV industry that the 2010 World Cup is in a friendly time-zone.

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