Will we see ‘Premflix’ – a Premier League streaming service – any time soon?
Matt Slater Oct 1, 2020
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Like fake crowd noise and branded face masks, tweets from EFL club accounts telling season ticket-holders to check their spam filters for an iFollow match passcode have become just another part of football’s new normal.
As the majority of these codes provide access to a no-frills, single-camera live stream, they are not the type of thing you would expect to attract envy from supporters of Premier League clubs. But they do.
In fact,
the desire for an iFollow-style service is one of the few things that unites most top-flight fans. Even before COVID-19 shut stadiums, there were regular calls for the Premier League to follow their customers online and give them the right to watch all of their team’s games legally, via a high-quality streaming product, in the same way fans of baseball, basketball and Barnsley can.
Those calls were rendered moot by the Premier League’s decision, with a hint of arm-twisting by the government, to make every game during Project Restart available on television, many of them on free-to-air channels. But that was meant to be temporary and the league started this season with every intention of going back to the old normal: fans in grounds, the pick of the weekend’s action behind BT’s and Sky’s paywalls, a few games on Amazon Prime each season and Match of the Day highlights for everyone and everything else.
Pandemics are stubborn buggers, though, and this one scuppered that plan as quickly as it has ruined autumn wedding plans, freshers’ weeks and gym re-openings. This has led many fans to ask if now is a good time for
the Premier League to crack on with that “Premflix” idea it floated earlier this year.
The answer has been… silence. Streaming, it seems, is the topic no club or league official wants to talk about anymore. Instead of match passcodes, Project Restart has resumed.
A few days before the new season started, the league announced the first three rounds of games would be shared between its domestic broadcast partners — including the junior members of that gang, Amazon Prime and the BBC — while last week it tacked on this weekend’s fourth round of games, although these have been reserved for BT and Sky. With an international break to follow, there was no need for the clubs to discuss what happens after that during Tuesday’s shareholders’ meeting but there is another meeting next week and it is as nailed-on as another handball controversy that they will decide to dish out more freebies to the broadcasters.
So why is the Premier League giving away something it has worked so hard to turn into a slice of premium live entertainment when an
EFL club can charge £10 a pop for a League Two game filmed by one camera? With the traditional broadcast blackout for Saturday 3pm kick-offs lifted, why not use the crisis as an opportunity to test the market for a direct-to-consumer, “over-the-top” service?
“Two reasons: technology and cash,” says Roger Domeneghetti, a senior lecturer in journalism at Northumbria University and author of the 2014 book From The Back Page To The Front Room: Football’s Journey Through the English Media.
Domeneghetti believes rights-holders such as the Premier League will “always be nervous about the potential poor-quality product a streaming service might provide” until 5G mobile connectivity is standard across the country. Broadcasters can deliver high-quality pictures come what may, but many fans have suffered the frustration of a stream buffering when their team is on a break, a putt is rolling towards the hole or a race comes to the final lap.
To be fair,
these fears were voiced before Amazon Prime’s bow as a Premier League broadcaster last December and the American tech giant managed to avoid any major mishaps, although latency, the delay on the stream, did force some viewers to turn off the goal alerts on their phones as they were spoiling the drama. But Domeneghetti also notes Netflix and other platforms had to reduce the picture quality of their streams during lockdown when the world sat down together to binge boxsets.
“It would be untenable for the Premier League to try and set up their own streaming service from scratch at the moment due to these technological issues, but that isn’t to say it won’t become more viable in the future,” he says.
“The other reason the league hasn’t moved to streaming yet is because, well, why would they, when they are still getting billions from Sky and BT? Yes, the value of the last domestic deal fell a little (down 10 per cent in February 2018 to £4.5 billion) but that was more than made up by the sale of the overseas rights.
“Things ain’t really broke, so there’s no need to fix them. The Premier League will only really look at OTT services seriously when the value of the rights begins to fall significantly through the current model. When will that be? Who knows?
“But if Amazon and/or another streaming service get serious about buying the rights, I think Sky, in particular, would bid high to preserve what they have. This would also be the case for other traditional broadcasters around the world. So, the entry of a streaming service into the market might push the value up without the league ultimately going to a streaming platform.”
Jamie Vardy with his hat-trick ball from Leicester’s win over Manchester City on Sky Sports (Photo: Catherine Ivill/Getty Images)
As Domeneghetti mentioned, Premier League chief executive Richard Masters told reporters in February that the league considered trialling an OTT service during the current three-year rights cycle, with Singapore understood to be the market identified for the pilot, but the clubs were not ready to give up the guaranteed income of a traditional, territorial rights deal, even in a relatively small one, just yet.
When pressed for when and where he might try again, Masters said: “I’m not saying it will happen in the next cycle, or when it will happen, but eventually the Premier League will move to a mix of direct-to-consumer and media-rights sales — it is impossible to say when that will be.”
But Domeneghetti is not the only expert who believes the prospect of a Premier League streaming service — in Britain, at least — could be a long way off. Far from it; it is the consensus view.
“The question for the Premier League will be: is there an existential threat that justifies disrupting a very good business model by setting up a potential rival to it?” explains Charlie Beall, a partner at digital sports consultancy Seven League.
“How you answer that will depend on your long-term view of the value of the league’s rights. I think we’re at a high-water mark for rights in general but the Premier League may be able to hold steady for a while longer. It could take a bit of a haircut domestically but there may still be upside internationally, or in terms of how they’re packaged. That’s probably the case for all tier-one sports rights at the moment — it’s the second- and third-tier rights that are looking at significant falls.
“Do I think the Premier League will launch an OTT service at so me point? Maybe, but I don’t think it will be anything significant unless it forms its own bundle alongside other football content, but we’re a long, long way from that happening globally or at scale.”
Former Sky Sports managing director Barney Francis agrees.
You might say “of course he does”, but the Premier League and Sky have grown up together, so nobody understands the league’s business model better. Francis has also spent the last year as chief executive of “future sport” at Sky’s parent company Comcast and has recently joined the advisory board of new sports marketing agency WePlay. He is no dinosaur.
“Every club needs money up front,” Francis tells
The Athletic. “When you’re trying to improve your squad in a transfer window, you need to know how much money you’ve got to spend. That’s why the certainty that the current broadcast model provides is so important.
“If you were to give that up by suddenly moving to an OTT model, the clubs would have no idea how much they can spend. I’d argue certainty in your broadcast contracts is even more vital now, with the shortfall from match day. Every business needs certainty. Hope isn’t a business plan.
“Yes, consumer habits are changing but there are no easy answers here. Sports like football, boxing and cricket have all become more professional over the last 30 years because of their relationships with broadcasters.”
Beall, whose job it is to persuade clubs and leagues that the future is digital and help them navigate away from their old analogue habits, is equally bearish on the Premier League’s pivot to OTT.
“The conversation about when to go for a direct-to-consumer OTT product will differ from sport to sport but I don’t think the Premier League will ever be in a position where it will go from sticking to the traditional model on day X and then turn to OTT on day Y: they will take baby steps and trial it first in a market where they feel they’re not going to get a good traditional deal.
“But if you are looking for reasons why the Premier League could start its own OTT service relatively quickly, the first would be that it’s relatively cheap and easy to do from a technology point of view. They could buy what they need off the shelf from any number of providers (companies such as the EFL’s service provider Endeavor Streaming) and then it would just be a case of deciding the business model. They could go for monthly subscriptions, advertising or pay-per-view, or TVOD (television on demand), as its known.
“In some markets, where credit-card penetration is low, you might struggle to get lots of little payments from consumers, and does the Premier League even want to be doing that? It would much rather receive a big cheque and let another company collect individual consumer payments in markets where they have deeper consumer understanding.”
That leads us to a question every expert has identified: the Premier League has spent 28 years being one thing and got very good at it, but starting an OTT business would mean becoming something completely different.
“Reorienting the business to be consumer-facing rather than (business to business), is fundamental and it’s expensive,” says Beall. “Right now, the Premier League never has to answer a call about buffering or deal with a payment issue from an angry customer. Sky and BT do that for them. Building that type of operation takes years and many millions of pounds.”
Richard Gillis, the host of sports business podcast Unofficial Partner, puts it like this.
“It would require a total transformation of the organisation’s culture and personnel,” he explains. “Take Richard Masters. He might be the best TV rights salesman in the world but he has never run a customer-facing operation. He might be able to do it but, like every other aspect of this, it would be a big bet to make.”
Beall’s point about creating “a bundle” of football content is also significant, as recent history is littered with examples of streaming services that tried to be “the Netflix of something” but just did not have enough content to attract customers and make them stay.
Dr Jonathan Cable, a lecturer in sports journalism at the University of Gloucestershire, thinks it is “inevitable” the Premier League will eventually develop its own streaming service “due to necessity rather than want, because it solves a number of different issues”.
In his view, it would help the league appeal to younger people, many of whom have stopped watching linear television, and it could also help in the fight against digital piracy, as it would add “a layer of control”, as well as providing another advertising platform. But what it would really need to take off, though, is a back catalogue.
“This would be an ideal starting point to begin the transition: put up all recorded matches and charge for access,” said Cable.
“This was part of the success of the WWE Network, the ability to go back and relive ‘classic’ events. This does mean buying back the rights from Sky, though, but it’s a wealth of content not available anywhere else. A perfect example of this is the launch of Disney+: they needed to acquire 20th Century Fox and other Fox properties before they felt they had enough content to compete with Netflix, Amazon Prime and Hulu.”
But here we go full circle once more.
“Sport is yet to have its (Disney boss) ‘Bob Iger moment’,” says Beall. “That time when you do what Disney did and say, ‘OK, we’re going to take all our content off Netflix and every other platform and do it ourselves’. Iger knew to build Disney+ he’d have to lose millions in the short term, put premium content on the service and restructure the organisation to be more consumer-facing. And he got buy-in from his board, who knew they’d be losing a lot of money in the short term to build a long term direct-to-consumer business.”
Are Masters’ shareholders ready to sign off that kind of move any time soon? Even Cable cannot see it.
“The amount of money the Premier League makes from just broadcasting is staggering and, even in times of economic uncertainty, the value of football hasn’t really gone down,” he says. “The league’s global appeal remains high. What the Premier League gets in broadcasting rights is substantially more than other elite European leagues.
“Markets like certainty and turning around to this elite club and saying, ‘We’re going to change it all and you might not get as much money. Now please vote for it’, is akin to turkeys voting for Christmas. There is no guarantee people will subscribe to an OTT service and this will always hold back those who are risk-averse or just want the money.”
OK, we get it, but how did the EFL make this leap of faith three years ago?
“They didn’t really have a choice because the majority of their games weren’t being shown anywhere,” explains Cable. “
This follows from the 2002 collapse of ITV Digital, which had agreed to pay the EFL £315 million for three years of broadcast rights but then couldn’t afford to meet this. The knock-on effect was that clubs were left out of pocket and many spent the broadcast money before getting it. The hangover was still being felt in 2018, when the controversial (five-year, Sky Sports) deal was struck, leaving many Championship clubs unhappy, and the subsequent renegotiation during the pandemic to allow clubs to stream non-televised games.
“What that might tell you is what the broadcasters see as the shiniest bauble in a competitive fight for eyeballs. The Premier League is more commercially attractive, so getting more of those games on air is preferable to showing more EFL.”
Domeneghetti puts it like this.
“It comes back to technology and cash,” he says. “Sports with lower viewing figures than the Premier League are ideal partners for streaming services at the moment because a) the technological demands are lower and b) their rights packages can be obtained relatively cheaply, either because they had no TV deal before or they are not seen as ‘key’ to companies like Sky, who are thus less motivated to get into a bidding war.
“This allows the streaming companies to experiment both in terms of the technology and the presentation. It’s why we are seeing a range of less popular or smaller sports experimenting with a range of streaming services, including even Twitch (the Amazon-owned streaming platform for gamers) as a broadcast partner.”
There is one notable exception to this rule, though.
“The NFL’s Thursday Night Football is a good example of a hybrid model,” says Francis. “Fox has the free-to-air rights and gets a return on investment from the advertising income, while Amazon Prime has the streaming rights and tries to convert viewers into customers.
“It works for both but the UK doesn’t have a big enough population for a free-to-air broadcaster to be able to afford Premier League rights. The NBA, MLB, WWE are all able to experiment with streaming, while continuing to get guaranteed income from the main broadcasters, because of the size of the North American market.”
It is true the sheer size of Canada and the United States, both in terms of people and time zones, does give the North American leagues an advantage when it comes to managing that transition from territorial rights deals to direct-to-consumer relationships, but Domeneghetti believes the Premier League can still learn from the NFL’s Thursday night experiment.
“It will be interesting to see how their next rights auction goes in 2022,” he says. “Do streaming services enter a real bidding war with the traditional broadcasters? Does the NFL have more streaming-only packages for sale? If the latter, does that prompt traditional broadcasters to up their streaming game? That will give us an indication of where the Premier League will go, and how fast.”
It is worth remembering at this point that nine of the Premier League’s current clubs are majority- or minority-owned by Americans, with four of those investors also owning NFL franchises, and most sports business pundits can only see that number increasing.
But that also underlines just how gradual the move towards a “Premflix” will be.
Nothing will happen until someone else has tried it, in a very controlled experiment, first, and even then, the majority of games are likely to stay with established broadcasters who are willing to keep sending the clubs big cheques every season, while handling any complaints about picture quality and direct debits from irate punters.
The Premier League has had it pretty easy since 1992. This crisis is unlikely to knock its confidence for too long.