Sky and Dazn, that’s why Serie A teams take a ball
What is the real stakes on football TV rights between Sky and Dazn. The analysis by Augusto Preta, tlc expert and founder of ITMedia Consulting, taken from Lavoce.info
In May 2019, the Italian Antitrust, following the notification of the acquisition of the R2 business unit (Mediaset Premium), imposed a temporary (three-year) ban on Sky from entering into new exclusive acquisition contracts for audiovisual content and channels. linear for internet platforms in Italy. The intent was to ensure adequate competitive pressure in the pay TV market, now completely in the hands of the Milanese company.
Few, and perhaps not even the Antitrust itself, thought that the decision could have such significant repercussions in the competitive scenario of (pay) TV, which has remained unchanged for decades in our country.
In fact, the Authority's decision seemed to be well ahead of the market situation, anticipating evolutionary scenarios already prefigured in these columns , but which appeared to the most distant. Instead, everything changed very quickly, also due to the acceleration of the Covid emergency, through the explosion of video streaming and therefore the passage of the offer of films and series (Netflix & co.) On the internet, the sports crisis due to the closure of stadiums and the blocking of competitions, which have led to a reduction in the value of rights throughout Europe and the entry of large global operators (Amazon above all) in the linear offer via the internet and above all in that sports (Champions League, Premier League).
Once again, although in a phase of crisis, football is the accelerator of changes in consumption and the driving force for the affirmation of new business models. It was for the affirmation of pay TV, at first with Tele + and Stream and then with Sky, it happened for digital terrestrial when Mediaset competed for the acquisition of television rights by launching the Premium offer and giving a turning point to the affirmation of digital terrestrial, and now it happens with the internet, which will represent a real transformation of the system, creating the conditions for a total change of the paradigm with which the pay TV business has developed for decades.
Sky itself has recently taken note of the changed competitive context and in June 2020 announced the entry into the "triple play" offer (telephony, content and data) using the fiber network of Open Fiber, which was then added the Fastweb network: in fact it has become a direct competitor of the telecommunications companies. With the transformations taking place and the consequent saturation of the satellite market, Sky's goal was to transfer all broadcast subscribers to broadband, trying to intercept new subscribers in perspective. Sky Wi-Fi was the instrument of choice for the fiber passage of the more than 4 million satellite subscribers. Together with the consequences of the Covid-19 emergency, all this has led to an acceleration in the processes of abandonment ( churn / cord cutting ) of the expensive premium offers and therefore a loss of subscribers, to the advantage of the streaming ones (Svod) of the competitors.
In this way, the convergence process has also established itself in Italy, a country that has never been able to make use of cable networks, and which now, thanks to the internet and the development of ultra-broadband networks, has managed to catch up. with the most advanced European and international realities. On the other side, that of Telco, it is finally understood, also thanks to Sky's move, how the competition is no longer so much on connectivity, but on the ability to become the enablers in the use of digital content and services. Users have recently shown that they have an almost insatiable appetite for exclusive, high-quality content and this is linked to the motivation to subscribe. By combining connectivity with services, new players such as Telcos can aspire to the role of aggregator, that is, the only enabler of the use of digital content and services in the "smart home" of the coming years.
The convergence therefore also entails competition between operators from different sectors, such as Sky and Tim, with Sky entering Tim's territory as a telecommunications service provider, and Tim strengthening its content offer by actually undermining the territory. by Sky.
TWO OPPOSING OFFERS
The marketing of audiovisual rights for the Serie A football championship for the three-year period 2021-2024 is therefore part of this changed scenario, where, with the prohibition of internet exclusivity for Sky, the competition moves for the first time to online and it is no longer Sky and the satellite is the master, as it was in previous auctions.
In fact, there are two economic offers that oppose each other: one, with a higher figure, from Dazn, which relies on a technological and distribution partnership with Tim, which amounts to 840 million euros for the exclusive of 7 matches of each round. and the sharing on the internet of the other 3, presumably with Sky. The other is that of Sky, which puts 750 million on the plate for all matches with exclusivity on satellite and digital terrestrial and the possibility for the League to create its own streaming channel.
In this way and for the first time, two offers are compared, with the second no longer complementary to that of Sky as in the past, in compliance with the Melandri law which prohibits the ownership of all rights to a single buyer, but strongly opposed and alternative.
For Sky, the loss or sharp downsizing in the Serie A offer is a prospect to be avoided. Pay TV has already been forced to share Champions League rights for the next 3 years with Mediaset and Amazon, it cannot afford to lose this match now, under penalty of a major downsizing of its business model and a much more uncertain future.
Hence the importance, and perhaps also the difficulties, for the League to make decisions shared by all the teams on such a delicate issue and with such disruptive consequences that they go beyond the world of football itself.
In all cases, and however it ends, it is clear that we have reached a turning point, which affirms, as never before, the centrality of streaming and broadband networks in the distribution and use of content.
Even if Sky wins, it is true that internet exclusivity bans risk delaying the transformation process underway and forcing the company to readjust its strategy over time, but we would still be faced with an operator who has already made some choices. clear technologies: its positioning is on the ultra-broadband offer and no longer looks to the satellite as central to its business.
Ultimately, what has already happened for cinema and TV series now extends to the entire television world, highlighting the central role of infrastructure in the development of digital and on-demand services and the paradigm shift that characterizes it, favoring models increasingly evident integration and convergence. The real game of football rights is above all, if not only, this.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/diritti-tv-calcio-serie-a-sky-dazn/ on Sun, 14 Mar 2021 07:00:09 +0000.