Will the internet soon do to football what it did to the music industry?

Chris McLaughlin
Writer

Around 20 years ago live televised football saved British pay television from bankruptcy and set in train the most powerful commercial forces ever seen in the then century-long history of the game. Today the FA Premiership generates £1.7 billion annually in television rights sales alone, a figure expected to double by 2015. The global arms race in player salaries means that mediocre footballers are millionaires by their early twenties. Meanwhile a season ticket for an English Premiership football club, once the sport of the working class, generally costs more than a year’s golf club membership, once considered the sport of the middle class. In London it is now generally cheaper to watch the Royal Opera company at Covent Garden than to watch Arsenal at the Emirates Stadium.

Whereas the wealth pyramid of European football was once determined by how many supporters paid to enter your stadium, it is now a de facto geographical lottery. Clubs in England, Germany, Spain, Italy and France can command the highest sums for television rights simply by virtue of being Europe’s most populous economically developed nations. In the 46 years from the start of the European Cup/Champions League in 1956 until the millennium, 25 final appearances were made by clubs from outside the “big 5”, more often than every other season. In the 14 years since 2000 it has happened only once – with FC Porto in 2004.

Nonetheless, for the first time in twenty years the market may be about to be disrupted. For at least a decade it has been possible to watch live sport illegally streamed via the internet. Until recently intermittent download speeds, poor video quality and few internet-connected televisions conspired to make pirate TV the preserve of a relatively small number of techno-geeks. Recently however, on all these points the situation has dramatically shifted. According to Ofcom the average UK home download speed is now 18.7 megabits per second, well above the 2 Mbps needed to sustain a decent quality of streaming video. With speeds of up to 150 mbps routinely available in cabled areas, high definition streamed video is already technically straight-forward, whilst the majority of living-room size TVs now sold in the UK are wi-fi enabled.

Until around 2000, most people who wanted to buy a recording of a song were forced instead by the big record companies to buy a package of a dozen or more songs, most of which the consumer had no interest in, known as an album, and moreover be expected to pay around £15 for it. As home computer and internet technology became cheaper, faster and more available, file-sharing websites like Napster, Limewire and The Pirate Bay short-circuited this effective cartel, providing consumers what they really wanted, systematically destroying a recorded music industry worth billions, and doing so in little over a decade. The record companies completely failed to see the danger coming – they had been dealing with pirates for decades. However unlike industrial scale criminal conspiracies which were relatively easy to combat, individual consumers doing just a little bit of private not-for-profit piracy proved impossible to stop. Eventually some legal internet music providers emerged, such as iTunes and Spotify, but not until long after free music had become the norm and whole generations had grown up expecting (and getting) their music for free. Even now these services struggle to realise rather meagre sums of cash, and most major music artists now earn their living from live performances.

It seems to me that a very similar prospect is on the cards for pay television. Like the music industry before them, their customers are driven by a passion for their product which extends not to the corporate middle-man, but rather to the performer of which he is merely the representative. Like music fans of twenty years ago sports fans today are well aware they’re being ripped off and overcharged. As a Celtic fan I know that barely half the games my team play are (legally) televised in the UK. That’s more than most teams but still only around four per month. For a full Sky Sports & BT Sports package to enjoy them the annual cost is nearly £700 per year, more than 99% most of which goes to finance hundreds of other teams, mostly in England and other foreign countries, in which I have little or no interest. Like the music business before it, the pay TV companies don’t want to sell me what I want, they rather want to sell me what I don’t want, will give me a little of what I want to soften the blow, and charge me handsomely for the privilege. The monopoly forces me to finance competitor teams which command barely half the crowds of my own team but are lucky enough to be in the correct location, and watch as the funds are used to trounce my own team in the Champions League.

There are some signs the TV companies are aware of the danger, Sky’s Now TV service will stream its sports channels on a pay-per-view basis but at a still rather hefty price tag of £10 per day. (They just can’t resist trying to sell you a package.) Aside from one England international in 2009, pay-per-match internet football has never been attempted commercially in the UK. Many minority interest leagues sports miss out financially as a consequence. I regularly illegally stream 2. Bundesliga (German football’s second division) and the IIHF world cup (ice-hockey), neither of which is broadcast by any legally available UK channel. Whilst these matches might not be commercially viable options for a mass-market broadcaster looking to add to a portfolio of content, were these matches to be sold for the 99p a time for which iTunes sells songs, they might actually make something rather than nothing.

It’s perfectly reasonable to imagine that the internet may soon kill pay television stone dead as a serious commercial enterprise. If that were to happen, the implications for the big money leagues may be enormous. The biggest losers would undoubtedly be the big 5 European leagues, who would instantly lose much of their financial advantage. There would be a forced return to the less lopsided financial position situation which prevailed until around 20 years ago, a return the majority of European football supporters would doubtless welcome. The death of pay TV may well prove to be the saviour of genuine sporting integrity in European football.