By Maureen Flores
email: [email protected]
Originally published in Portuguese by O GLOBO
March 28th, 2017
The acquisition of television rights is the area that most moves resources in the sports economy. For example, broadcasting rights for the 2018 and 2022 Winter Games and the Summer Games of 2020 and 2024 have been sold by the International Olympic Committee for U $ 1 billion to the Japanese NHK and the Japan Television Association. It is expected that the return on such large investments assumes the existence of a legion of fans translated into a large audience. However, large audiences are only available at mega-events or “mass” sports such as football, soccer, basketball and a few others.
Well, fortunately, the technology has arrived to change that as now any sport can have international coverage. The solution of the moment was developed by the Canadian company, Yare, where three partners invested approximately USD $300,000 to develop a platform to transmit any sport activity.
It works like this: Yare requests from the sport federation an authorization to transmit their content. Based on this authorization, Yare broadcasts the event online real-time over the internet and records and stores the content in the cloud; accesses are sold around the world in territories pre-defined by the customer. The net revenues generated are divided half-way with the federation. A good example is Curling, a winter sport that does not have millions of fans around the world, but was able to attract 11,235 people outside Canada to visit the site; including 17 visitors from Brazil, the only country in South America. The price of access to attend the Curling tournament ranged from USD $70 (for the season) to USD $20 (one tournament). Thus, the right’s holder extended their reach without investing a penny.
Another example is Canadian football, which Yare transmitted to 100 countries (except Canada) reaching 24,695 fans, including 18 Brazilians. The events were sold for USD $9.95 per game and USD $29.95 per package of events. Prices vary: the higher the audience, the lower the price.
The company also monitors all accesses from its audience. In the case of Canadian football, 70% watched the game by cell phone, 25% on desktop and tablets were used by 5% of the audience. Facebook is the leader among the use of social media. The predominance of cell phone use confirms the studies of trend analysts who point to mobile phones as the great entertainment vehicle of this generation. In its business model, the Canadian company works with large TV stations. Some of these important channels, which have a higher operational costs, hire Yare to cover some territories reducing their transmission costs.
The technology used by Yare is OTT, the same one that allows us to speak by Skype, watch Netflix and enjoy other services offered by the internet. Other competitors are already on the market; Some are large, such as NeuLion, and others more specialized, such as Fubotv. However, this Canadian company represents the second generation of OTT solutions for sports broadcasting and therefore, as determined by the “laws” that govern technological development, its services are faster, cheaper and more effective.
In Brazil, there is great potential in the use of OTT for broadcasting sports that do not reach the large audience required by open and cable TVs; for example, Beach Soccer, Skating, Muay Thai and others. The challenge with Brazilian internet infrastructure is that with such demands it will often require additional equipment for bandwidth and signal redundancy. The cost of such equipment increases the operational costs and reduces the net revenue. Even so, it is possible to have a profitable Brazilian operation. In fact, Brazilian sport federations used to manage scarce public resource and compete fiercely for private sponsorship should study the new possibilities of financial sustainability offered by the internet.