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Will big Sports go direct on OTT?

By PETER WHITE

Published: 2 March, 2012

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One of the big weaknesses of OTT services is the lack of access to live sports. But the attitude to OTT is changing and live sports is beginning to cut one deal with pay TV providers and a separate deal for OTT, sometimes taking direct responsibility for the services.

Is this a step-change in the way sport is paid for, and will it soon be possible to sign up online anywhere in the world, to watch the sport you want, paying only for the sport service and not the pay TV network it has previously been delivered over?

Premium sports rights holders are now looking for TV Everywhere to create an alternative direct source of distribution that is likely to reach the living room via smart TVs. This raises the possibility of the rights holders coming into direct competition with their pay TV distributors, as could soon be the case in the US for baseball, one of the country's three major sports, commanding large and committed audiences.

Major League Baseball (MLB) is the sport's equivalent in the US of the English Premier League, run by the top teams in the American and National leagues, and has set up a limited partnership called MLB Advanced Media to (MLBAM) control rights for multi-platform Internet distribution. MLB's strategy is to negotiate two types of deal, one for linear broadcast delivery, and a second via MLBAM for TV Everywhere. Sports broadcasters are well aware of the threat that as smart TVs become established, consumers will be able to access baseball matches via the TV Everywhere option at a lower price. Of course it all depends on exactly how the rights are carved up, for MLB may choose to make certain matches only available live via linear TV, and that could be part of the package.

But for both pay TV operators and sports broadcasters such as ESPN, the challenge is to maintain an intact business model and retain control over the content across all platforms, especially as the smart TV threat grows. For this reason ESPN will be pursuing a deal covering both linear and Internet TV, arguing that this will enable MLB to hold out for even higher revenues than if it goes it alone for TV Everywhere. Indeed both ESPN and operators have warned that failure by sports leagues in general to fold TV Everywhere in with linear TV will jeopardize sports rights fees.

For a full analysis of this subject go to www.rethinkresearch.biz/faultline and order this week's Faultline issue or ask for a four week trial to Faultline.

is an ever growing demand for premium sports content.

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