Thursday, July 24, 2008

Tech & Sports: The First Go


I'm Greg, one of Sager's friends and a blogger myself. I'm posting on OOLF because there's a big need here to talk about the business of sports, namely the money game and how technological advancements are changing how we consume sports.

One of the bigger stories this week came out of Ottawa, where the federal government here in Canada auctioned off more than $4 billion worth of cell phone spectrum frequencies to Canada's Big Three (Rogers, Telus and Bell) cell phone carriers and a whole host of new competitors, including Globalive and some foreign competitors looking to take a stake in Canada's ridiculously expensive and anti-competitive cell phone market.

Now, opening up the mobile spectrum in Canada is good for a lot of reasons, not the least of which is that term journalists loathe to describe their profession: content delivery. Unlike in Asia and Europe, where streaming of radio, video and other data-hungry applications is the norm, Canada's very far behind in distributing content via mobile technology (although the iPhone's a nice step in the right direction).

This poses an interesting question when it comes to sports coverage: how will the Canadian and American markets respond to a new kind of distribution technology for sports?

Unlike, say movies or music, sports is a bit dicey when it comes to distribution of content via mobile platforms. Television rights is a very sensitive subject for leagues like the NFL and Major League Baseball - distributing content over new media platforms like a cell phone is relatively uncharted territory in comparison to television. The NFL and MLB guard video streaming like soldiers at Fort Knox - you have to pay a set fee to access the MLB site's game-streaming at, so imagine how tough it will be to negotiate video-streaming on a cell phone?

(SIDEBAR: In MLB's defense, they have offered a $4.99, one-time only payment, to access video clips of all the games of any given day as an application to Apple's 3G iPhone, so that's a good first step).

But enough of all that. Let's consider another angle - the convergence side of a new cell phone marketplace.

If you notice, one of the new license holders for the cell phone market in Canada is Videotron - a significant player in Quebec and Eastern Ontario's residential cable and Internet business, not to mention the parent company of Quebecor Inc., the owner of Sun Media.

As most people in the business know, paid-for newspapers are facing a decline in revenues and stock prices at an alarming rate. The decline is so bad, in fact, that questions are beginning to arise about how editorial content (read: interesting, noteworthy content, not snack-sized pieces of news in free commuter dailies like 24 Hours) will be distributed in the future. One example of this is the New York Times, which is now offering a highly sophisticated application via the iPhone that offers the paper's content, including columnists, for free and on the go and even bypasses reading the paper on a web browser.

So why not have this option for Videotron and Co.? Could Sun Media create an application that goes pre-loaded onto Videotron cells?

But all of this is theoretical: the real question becomes, how much money is involved? If there's a market big enough to consume news on mobiles in the future, the cost benefit analysis is positive for everyone, journalists included.

The more likely scenario is the whole scale shut down of Sun Media in favour of "streamlining" and aggregating news from Canadian Press and other sources. It's cheaper and more cost-effective in the long-term.

The bottom line is this: the cell phone auction may be good for consumers in Canada. But it could be positively deadly to content producers in the long-term.


Jordie Dwyer said...

Wow, insightful commentary, and great I might add.
Now - what I want to know is:
Where did a sports guy learn to do that kind of work, and WHY???

Mike said...

Using as precedent the music and movie industry and how they dealt with their market & daily operations with the onset of the internet back in the '90's, I suspect sports broadcasting too will react the same way - that is to say, they will either sit on their hands until they realize just how far the market has shifted and the money they've lost as a result; or overreact and set up ridiculous and unnecessary barriers that hinder themselves overall rather than help (personally I'm leaning towards the latter).

I'm starting to believe that the business world may never get a proper working grip on the wireless world, but then again that might be thanks to the nature of that world itself...

Great post btw!! Good to have you around here!