Online and mobile streaming: Companies may be paying a lot for Manchester United content, but are customers?
Having recently signed a deal to allow American Satellite Radio firm Sirius XM the rights to stream Manchester United games live across the US (as well as offering a series of other online and mobile-based content as part of the package), the commercial department at Old Trafford are now looking to develop more deals of this kind, notably across Asia.
The deal is just one of a number of recent/planned ‘territorial’ partnerships set up by the club in what is essentially an attempt to exploit the independent value of MUTV and MU Interactive-related content and to maximise the overall commercial potential of the Manchester United brand across the globe.
A similar deal was last year done with Hong-Kong based Telecommunications firm PCCW and the club are widely expected to announce more in the coming year.
It’s all good business for Manchester United in the sense that it gives the club the opportunity to increase its brand presence across the globe at the same time as improving its annual earnings (by anything up to about £20 million, assuming a significant number of additional deals are done)… all by way of providing a service that pretty much already exists anyway (through MUTV).
However, whether or not these deals represent value for money for the brand partners or even, for that matter, the eventual customer/subscriber, is another issue.
In theory, it should benefit them: Association with the Man United brand will enhance the reputation of prospective partners, providing them with exclusive content which in turn should lead to an increased amount of customers/subscribers which subsequently (or, at least, ideally) drives advertising potential and eventually increased profitability for the channel.
Yet, I wonder whether or not it is really worth the money for someone like Sirius…
When the channel announced details of the partnership, the company’s share price reportedly rose 3.8% to $1.69, its highest price since July 2008. If details like this are anything to go by, then Sirius is already getting some sort of return its investment. However, until specific figures on subscription are obtainable, it is hard to determine whether or not the partnership will have made a worthwhile difference.
More pertinently, I would question who exactly actually subscribes to these types of things? No doubt, media executives and trend experts keep telling us that online and mobile streaming platforms are the ‘future’ of industries such as that of Sports Marketing. Yet, just because more deals of this kind are being done, it doesn’t necessarily mean the world’s public will buy into it.
There is certainly a market for this type of product (which, presumably, is why Manchester United will continue to be able to afford doing it). The sheer number of people interested in football, interested in Manchester United in particular and that are ‘active’ on the internet commands that this will be the case, especially amongst younger people, and especially in Asian territories where there are a lot of people, where ‘fandom’/’fanship’ is typically consumed intensely (as opposed to passively) and where access and pioneering attitudes to technology are high (if you’ll excuse the generalisation).
However, this does not necessarily mean subscription-based or paid-for content will flourish. In fact, it could very well mean the opposite, particularly with the rise of alternative, cheaper (free) options in the form of Peer-to-Peer and content sharing sites.
Indeed, the cumulative efforts of blogs such as 101GreatGoals.com, FootyTube.com (which provide viewers with match highlights footage, albeit these are not Man United specific) and also P2P sites such as FirstRow.net, MyP2P.eu and IraqGoals.net (which stream matches live) prove to be a much more powerful as a content-viewing platform. In terms of regular viewership, estimates suggest that one of these sites alone can command as much as 30,000 unique visitors per day.
In comparison – and according to Man United Chief Executive David Gill – annual subscriptions to MUTV currently stand at “between 80 and 100,000”. Relatively speaking, that’s not a lot of people. Although, it must be said that the intention is for this to grow, which is precisely why the club is looking to push through deals such as that which has been set up with Sirius.
MUTV itself only contributes around 3% to the club’s overall revenue stream and, with annual revenues of £6.9 million (£4.9m of which came from inside the UK), the channel is evidently not (yet) a significantly lucrative tier to the club business.
Personally, I do not know anyone who has signed up to any sort of ‘premium’/’premier’ subscription-based football website. Perhaps this says more about the luxuries of living in a cosmopolitan, modern city like London; however, I think a lot of this has to do with the fact that people know they can access the content elsewhere, either officially (through a major sports channel) or through one of the (admittedly slightly illegal) online streaming sites mentioned above, at the same time as obtaining any official, club-specific news through the non-subscription capacity of ManUtd.com.
In addition, digital media needs to respect that people are not stupid. By and large, the public understands that any genuinely good/interesting online content will eventually find its way to mainstream media anyway. In the same way they understand that MUTV footage will have to be ‘safe’, largely biased, internally-produced content that no one really want to see anyway. And, even then, it will probably find its way onto the internet via something like Twitter.
Not that Manchester United will mind all that much. From its point of view, anything that is passed on that helps to promote the club’s name is probably good news for them, even if it does somewhat undermine the exclusivity of its content. This is why football itself will always be the driving factor to the club’s success, with everything else secondary.
Manchester United has done well to squeeze as much money as it can from companies happy to pay inflated amounts for a product with limited worth other than that which exists in the Manchester United name.
It’s all the more impressive when you consider the multitude of other territory-specific and/or worldwide sponsorships the club has engineered with brands such as Smirnoff (in Asia), Epson, Turkish Airlines, Betfair, Thomas Cook, Singha Beer, on top of the hefty deals that are currently in place with Nike and Aon.
There may very well come a time in the future where we all watch football online. However, the relationship between television and the internet (i.e. how well – in terms of both quality and ease – the internet can be transferred to our televisions) will have to improve first before this can become a reality. For the minute, this is not something that a brand/football club like Manchester United can or, indeed, would want to do much about… not least because they are currently reliant on income from the collective sale of Premier League TV rights. I will try and talk about this in more detail in a later blog….