Globally known as the land of huge soccer’s stars and home of a passionate and fanatic audience when it comes to clubs, Brazil has been dealing with a lot of changes in the sports business.With the soaring growth of the Internet access and the power of consumption by the middle-class, the number of mobile phones around the country exploded and, following a world trend, the TV ratings are dropping year after year.
The public that was used to watch games and whole championships on TV is now getting used to following its idols on social media, watching matches on their smartphone and day after day the television is been considered a plan B for entertainment in sports. On the other hand, as the consumer behavior shifts, the deals and rights to broadcast championships are still in the hands of powerful media companies that, in general, prioritize live public or paid TV broadcast.
To go deeper in those changes, LABS talked to Erich Beting, founder of Maquina do Esporte and one of the most influential journalists in Brazil. Will these changes accelerate the market and bring streaming to a new level of penetration in the country? Or the companies that maintain the rights to broadcast will still be the ruler of all kinds of consume when it comes to sports? Not one or the other. For Beting, the first real change will be on the devices that producers and broadcasters–old or new–will put their content: mobile. “The tendency is to make use of the mobile platform to consume content, replicating it on the TV screen”.
How do you see the future of cable TV in the face of streaming growth?
Brazilian cable TV operators ended up becoming data transmission companies. The mergers of the operators TVA and NET with the telecom companies Vivo/Telefónica and Claro, respectively, showed the path taken here. Cable TV will migrate its content to streaming gradually, without causing loss of revenue for the operator. (Therefore) Globo‘s streaming service GloboPlay does not interfere in the NET/Claro business because data consumption continues to generate revenue. Who earns more is Globo. The problem is for those who act only as a TV operator, such as Sky.
How does the FOX-Disney merger and AT&T’s acquisition of Time Warner change the game in Brazil, especially when we think that Turner’s Esporte Interativo broadcasts games over Time Warner’s TNT?
I think the biggest change is that the fight for streaming has several players. Before that, the fight was separated. The content producer fought with other producers to have more audience. And the operators dueled to win the subscriber with the best offer.
The biggest difference is that there are many wealthy players to fight for the rights of the main sporting events. And this will become even greater as the consumption of broadband (broadband) becomes more popular, and telecoms start to fight for the acquisition of rights to broadcast matches.
Is streaming the future of the live sporting event?
When there is a full popularization of content consumption by mobile devices, naturally it will be. Just as the internet has already replaced the print media in the consumption of information.
What opportunities do platforms like DAZN have on the horizon when it comes to purchasing broadcasting rights for the most relevant competitions in the country?
I think that there still needs to be more consumption of streaming platforms for people’s habits to actually change. And, until that happens, the business will continue to be concentrated in the big TV stations. DAZN‘s agreement with the Paranaense Championship (of teams from Parana, Southern Brazilian state) is the best example of this. The championship “fell into the lap” of the platform. In order to actually change the landscape, DAZN will have to rely on that at first. TV’s lack of interest in buying the event. If it doesn’t happen, you won’t be able to see a real change.
Are the Brazilian teams prepared to negotiate in more “real” terms?
They may even be better prepared technically, but the biggest problem is having the financial stamina to fight for a significant improvement in payment of higher amounts. Clubs are still very dependent on short-term money. With that is impossible to have any mid or long-term negotiations (such as broadcasting rights). In other words, it is not possible to face broadcasters due to a complete lack of financial strength to negotiate on an equal footing. Technically, however, clubs are better prepared to understand the values of each platform.
And how does this dispute unfold when we look at leagues, sports organizations and cable TV channels also investing in their own streaming platforms?
I think that the entities’ own platforms tend to be products to serve a specific niche. Competitions will use streaming to win abroad, while clubs will invest in products that serve fans in addition to the competitions in which they participate. On the other hand, TVs, when investing in their own platforms, respond to the change that the consumer requires, to receive content on new platforms. This does not change the competition for broadcasting rights much, since the remuneration of a media company is always higher than that of the consumer, at least in the current scenario. Up ahead this could change, as now, after 10 years of Netflix, it starts to happen in the entertainment industry.
eSports: those who understand the market say that streaming and free games have given a new boom to the sector. What is your assessment? How should this evolve in the communication and rights market?
Streaming is the platform that made eSports become a millionaire business. It was through internet transmission that players and teams became popular with the youngest. Thus, it ended up boosting the industry as a whole.
Since the young person consumes streaming for e-Sports, why not take other activities to the platform? Added to this is the consolidation of the streaming consumption model with a monthly subscription, as is the case with Netflix, and the business should only gain scale.