This article is by Matthew Hatton, an opinionated writer from Newcastle. It first appeared on his blog and is re-published here with his permission.

opinion There’s a lot interesting fallout regarding the Federal Court’s decision allowing Optus to offer its customers a service that can save free-to-air television broadcasts in the “cloud” and then stream the audio and video to their mobile phones. If you’re familiar with the SlingBox service that’s available in the United States, you’ll find it’s very similar to that.

But I cannot fathom on what grounds the AFL would be unhappy with either (i) what Optus is offering or (ii) the decision of the Federal Court in relation to it.

Most of the criticism coming from Telstra and the AFL is that this somehow breaches the copyright the AFL holds over the broadcast of matches. They claim that Optus’ service will devalue the broadcast rights (which were renegotiated last year to be worth a record breaking $1.25billion over 5 years), thus placing the future of the sport in jeopardy. As part of that new broadcast deal, the AFL signed with Telstra to allow Telstra customers to stream matches to Telstra’s T-Box and other devices (such as smart phones) connected to Telstra’s Next-G mobile phone network. According to reports that part of the deal is worth some $153 million over 5 years.

And it’s here where things start to get derpy.

Firstly, Optus’ TV Now service is only available to Optus customers (in much the same way that Telstra’s deal is only available to Telstra customers). So, this service isn’t encroaching on Telstra’s turf at all. It can be argued that having a service such as this available may result in people not switching from Optus to Telstra if they wish to get AFL coverage on their mobile phone, but I cannot for the life of me imagine that the number of people who would consider doing that would be all that high.

So what Optus is essentially providing is a service that has the potential to increase the AFL’s audience, not shrink it. And, for any sporting body, eyeballs watching matches are what make you money.

At best, the TV Now service is capable of showing matches on a 90 second delay – which for the sake of the argument is as good as live. Which means that viewers are also going to be subjected to the advertisements that are broadcast during the match.

It seems to me that what the AFL, Optus and Channel 7 (the free-to-air broadcast partner who’s coverage the TV Now service will be able to capture and stream) should be doing is looking at how many people are using this service and factoring that into advertising rates during matches – assuming of course that a higher audience number means a higher charge placed on ad spots during the match broadcasts.

Yes, Telstra has more of a right to be upset, but practically I can’t see just how they’re going to be losing out. Do people really change mobile service providers based off one tiny piece of exclusive content? Hell, are these extra services even used that widely? I’d love to know how many people paid their money for Cricket Australia’s streaming service that was available through the Vodafone produced Cricket Live app.

The reaction from the AFL in particular demonstrates just how completely out of touch they are with the changing attitudes towards television and broadcast sport. Optus’ TV Now service is something that they should be leveraging for their own benefit, not castigating because they reckon that the services that are going to be provided through the deal with Telstra are adequate enough.

More eyeballs in front of live sport broadcasts are what matter. The AFL should be encouraging people to watch their product. Trying to stop them is just completely counter-productive. The Federal Court and see that, why can’t they?

Image credit: Flying Cloud, Creative Commons

Related posts:

1. Who owns footy rights? Optus web copyright victory explained
2. AFL rights: Optus, Telstra in a techno-legal time warp
3. Optus offers TV from your mobile
4. iPhone 4S: Vodafone, Optus or Telstra?
5. iPhone 4: Are Telstra & Optus price gouging?

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1. Tim
   Posted 02/02/2012 at 8:33 pm | Permalink | Reply

   Nice blog.
   Interesting notion about the AFL being out of touch, I agree, but… There’s absolutely no way that the handful of extra viewers watching through TV Now would bring in more revenue, than the Telstra deal. So from that perspective you can see why they’re defending the one paying them the cash.

2. Michael
   Posted 02/02/2012 at 9:15 pm | Permalink | Reply

   As part of that new broadcast deal, the AFL signed with Telstra to allow Telstra customers to stream matches to Telstra’s T-Box and other devices (such as smart phones) connected to Telstra’s Next-G mobile phone network. According to reports that part of the deal is worth some $153 million over 5 years.

   Optus, via the TV Now service, has effectively replicated Telstra’s licenced AFL streaming product (plus 90 sec delay) without paying a cent to the AFL. meanwhile, Telstra which has coughed up $153mln for the very same content (minus 90 sec delay) is left looking like a complete mug.*

   if you can’t understand why both the AFL and Telstra would be upset….

   * is avoiding the 90 sec delay worth $153mln? not on your life.

   • Tezz
     Posted 03/02/2012 at 7:16 am | Permalink | Reply

     Optus, via the TV Now service, has effectively replicated Telstra’s licenced AFL streaming product (plus 90 sec delay) without paying a cent to the AFL

     No it hasn’t, TV Now only records Free-To-Air broadcasts, out of the 9 AFL games a week only something like 4 are broadcast on FTA (which aren’t always live either). This is exactly the same thing that is freely available on your TV in your area. NRL is pretty much the same though that deal is still in negotiation.

     The Telstra deal is for every game, live, without interuption.

3. Nick
   Posted 02/02/2012 at 9:50 pm | Permalink | Reply

   So if you have foxtel and you pay 120 bucks a month, would you let your neighbour watch it for free?

4. @matt_phipps
   Posted 02/02/2012 at 9:50 pm | Permalink | Reply

   Telstra shouldn’t be too upset – yes they have now wasted $153M that they can write off over 5 years (less $ for time before the decision). But they now have a precedent that gives them unlimited free access to all broadcast content, from the AFL, NRL, etc. so long as they use the same time-shift record and stream on demand model.

   I predict this decision will cause the greatest upset for the IOC. Unlikely this decision will be appealed before the Olympics in september, and I doubt they have time to change their broadcast strategy.

5. B2O
   Posted 03/02/2012 at 7:01 am | Permalink | Reply

   >Optus, via the TV Now service, has effectively replicated Telstra’s licenced AFL streaming product

   Remember, not all AFL games are broadcasted on FTA television. Optus customers using TVnow are still unable to watch *all* live matches without access to Telstra or Foxtel.

6. Tezz
   Posted 03/02/2012 at 7:24 am | Permalink | Reply

   One thing that gets me in all this, and it’s mentioned with regards to the cricket app. How many people are seriously going to sit down and watch an AFL game on their mobile devices?

   I mean I can see people watching highlights packages and things like that, but I just can’t see too many people so desperate to watch a game live they’ll be willing to sit there staring at their mobile phone for hours.

   Just for reference too, if you want to talk copyright violation that picture you have at the top of the article is clearly not taken by a professional, and although it is licensed under the “Creative Commons” agreement, technically speaking the fact it was taken in the first place is a breach of the AFL’s copyright and the agreement you make when you walk into the stadium.

   • Victor
     Posted 03/02/2012 at 5:51 pm | Permalink | Reply

     Regarding the use of the photo above, once the photo is taken, the copyright is owned by the person who took the photo. Any agreement with the AFL regarding photos taken at the ground, pretty much just gives them to right to boot you out of the ground for taking photos. No one can claim copyright on a photo that you’ve taken, regardless of who or what is depicted in the photo. Trademark law and personal image rights are a different matter though.

     Also, the above photo is from an AFL match, so I don’t think they’d care anyway.

     • Victor
       Posted 03/02/2012 at 6:07 pm | Permalink | Reply

       *isn’t from AFL match

7. m0nty
   Posted 03/02/2012 at 8:35 am | Permalink | Reply

   The author doesn’t really understand Telstra’s motivations in buying the Internet streaming rights. They are interested in creating a monopoly. Losing exclusivity is a bad thing for them.

   For the AFL, their lifeblood is selling content rights, so they are even more incensed. They are not interested in more eyeballs as such, they are concerned with maximising revenue. More eyeballs and less revenue is a terrible result for them.

8. Daniel
   Posted 03/02/2012 at 9:18 am | Permalink | Reply

   “Firstly, Optus’ TV Now service is only available to Optus customers (in much the same way that Telstra’s deal is only available to Telstra customers). So, this service isn’t encroaching on Telstra’s turf at all. It can be argued that having a service such as this available may result in people not switching from Optus to Telstra if they wish to get AFL coverage on their mobile phone, but I cannot for the life of me imagine that the number of people who would consider doing that would be all that high.”

   The whole point of Telstra paying $153M/yr is to have exclusive content that brings in the customers. If they didn’t think it would work (which it does), then they wouldn’t spend the money.

9. Matt
   Posted 03/02/2012 at 10:40 am | Permalink | Reply

   One thing missing from this debate is what Optus gets out of it – “free” (to air) content, and revenue for their TV Now service.

   People seem to see them as doing a noble thing to “break” the monopoly of the AFL/Telstra online sports rights. They aren’t. They are doing it for revenue, and bragging rights over Telstra.

   The Optus’ TV Now service is only free for the first 45 minutes a month, basically one quarter of an AFL game (when you include commercials, injury time, ball ups, goals, etc). Fine if you want to watch one episode a month of a TV show, but not enough time for a full sports game of any sort.

   So if you wanted to watch a full game you’d have to cough up an extra $6.99 a month for 5 hours of space, which is about 2 games worth (when you include commercials, quarter and half time breaks, injury time, ball ups, goals, etc). To watch any more you’d be looking at the $9.99 monthly fee which gives you 20 hours a month, which might be enough for a couple of weeks of games, not a month’s worth.

   So Optus is selling a service. One they presumably make a profit on. A service that uses “free” content (which someone else, Channel 7 and the AFL, has paid to produce and who doesn’t get any of this new revenue from), that Optus can earn extra revenue off.

   They get “free” content for a service they charge people for.

10. Dec
    Posted 03/02/2012 at 11:26 am | Permalink | Reply

    Sigh. What a poorly constructed “opinion” piece. The author is well out of touch of the commercial realities of how the market works.

    Sport rights are sold on an exclusivity basis, that’s why the price is so high.

    Digital media broadcasters need exclusive content as drawcard to sell their service to new subscribers, or reduce churn from existing ones. It’s one bullet point on a long list of reasons why Telstra is a better proposition than rivals.

    If your rival circumnavigates the law to severely devalue one of your key USP’s then you’re going to be awfully upset and will re-evaluate your strategy. The only people to be hurt by this will be the sporting code, which travels down the line to grassroots participants.

    A lot of it is about the perception in the market, and Telstra is known to have a seriously kick a$$ network NextG compared to the tin cans and string offered by everyone else.

    I can’t wait for people to try to use the Droptus network and realise the signal is poor and they can’t see the movement of the actual ball on a pathetic stream on a 3 inch screen. Then there’s the cost as another poster mentioned, fair play Sir.

    Optus are losing the battle, I think they’ve put all their eggs in this failure to divert attention from the fact they are becoming irrelevant.

    Saying they should count audience numbers and add these to their viewing figures is misguided and not a commercial reality. Don’t pass judgement on something you don’t understand.

    I can’t wait to hear what the likes of Nine and Ten have to say about this. They pay an awful lot of money to US studios for the likes of 2.5 Men, CSI and so on.

    Believe it or not FTA TV is free because there is advertising in there. If viewership goes down then so does revenue. Therefore you see more repeats of three year old top gear episodes because they cant afford further investment.

    Maybe they should lobby the AU government for a UK-style annual TV license to make up the short fall?

11. Tezz
    Posted 03/02/2012 at 1:23 pm | Permalink | Reply

    After reading some of the comments on here I really hope now they change the laws and make time shifting TV viewing illegal, that would mean everyones PVRs/VHS recorders, etc, would be deemed illegal.

    Now that would be fun and games :)

12. SMEMatt
    Posted 03/02/2012 at 1:55 pm | Permalink | Reply

    BT time shifting TV from the future.

13. Victor
    Posted 03/02/2012 at 5:43 pm | Permalink | Reply

    I think a lot of people are missing the point re: Optus, their prices, and their service. If this decision is upheld, then anyone can provide this type of “near live” service over the Internet. Which phone network you are with is irrelevant. I think it’s also worth mentioning that if Telstra had offered this service to everyone, regardless of network, at a reasonable price, then this court case might never have happened. Instead, by trying to maintain their monopoly, it looks like they’re going to lose it.

    Also, regarding the “eyeballs”, the AFL will gain more in the long term with more people being able to watch games, than with Telstra customers only, and $150mil in the bank.

14. Paul
    Posted 04/02/2012 at 9:51 am | Permalink | Reply

    The battle for customers now and future will rely on content, when you do get your NBN box you will be able to have 4 ISPs connected, which ones and why? Who has the best cable movies for you, what sport do you like, doco shannels etc. It won’t be a battle to see who gets your NBN connection, with 4 options there will be other reasons. Oh, BTW I see British Telecom is now supplying 300Mb connections, if you are willing to pay multi 100′s as an upgrade of their High speed ADSL (30Mb)