So what drives Asian consumers to stump-up anything between three and thirty-five US dollars each month for video entertainment via their cable, satellite broadband or wireless networks? Premium content, of course!
In the rush to digitize the Asia pacific pay-TV market, we (and that includes our regulator friends) sometimes seem to have forgotten the value of delivering compelling, 'must have' programming to pay-TV subscribers.
Certainly, the key drivers for pay-TV services remain the same wherever you are in the world: Movies, relevant news, sports, high quality educational and exceptional general entertainment services.
Well-branded, high-production value movie channels are the clearest example of compelling content. Think of the Harry Potter series of movies, The Da Vinci Code or Mission Impossible. There's no doubt that subscribers are willing pay for the privilege of experiencing such Hollywood fare. Live and dramatic 24-hour international and local news is another staple of the pay-TV line-up and television (pay-television) still does this better than anyone else.
However, in a world where global sports marketing has now become a reality, sports TV maybe the most compelling content of all--and where it's allowed to take its rightful place in the line-up, the most compelling pay-TV offering of all.
Meanwhile, if there was one message that the diverse range of speakers assembled at a recent CITV/CASBAA International Sports TV Forum in Beijing could agree on, it was that the global landscape for sports broadcasting has changed irreversibly.
According to Sun Yusheng, the Vice Minister for state broadcaster CCTV with responsibilities for the CCTV-5 sports network--and the host broadcaster for the 2008 Olympics in Beijing--the confluence of digital technologies will deliver a unique and revolutionary viewing experience for Beijing 2008.
'We are in a position to take advantage of all this new technology,' he said. 'We will have six dedicated channels for Olympic broadcasting and one channel will be strictly HDTV. Along with broadcasting on the internet, this will impact a world sporting event like never before and is a unique opportunity for China to take the lead.'
Because CCTV has a 16-channel national capacity, the network says it can afford to turn six networks over to the Olympics, delivering an unprecedented 3,300 hours of Olympic coverage.
Thus it should also come as little surprise that sports is at the technological vanguard. 'Almost every new broadcast technology has started from sports,' said Ma Guo Li, the COO of Beijing Olympic Broadcasting. 'Digital servers for archiving, tracker cameras, motor cameras, underwater cameras and HDTV, all this technology is test run as sports coverage.'
With the technological advances in place, the presentation of sports events is getting ever closer to matching the spectacular experience of Hollywood's latest use of special effects.
Certainly, the escalating sums networks must pay to broadcast the top sporting leagues across the world leave little room for error. The US National Football League is reaping US$3.1 billion per year in TV rights alone while Britain's top soccer competition, the FA Premier League, is forecast to receive close to UKP2 billion over the next three years for its global TV rights.
'In 2003, our total revenue from overseas broadcast rights went up from just over 170 million pounds to more than 300 million pounds for three years,' said Phil Lines, the Head of International Broadcasting & Media Operations FA Premier League. 'We sell the rights to 25 countries in Asia providing 31% of our total worldwide audience. Given that we are nearly always shown on pay TV channels in Asia this is a remarkable feat.'
Naturally these huge rights fees cannot be sustained unless subscribers (and advertisers) pitch in. 'Sports is premium content and sports fans are at the point now where they are a willing to pay for a premium package to watch it,' said Alex Gilady, the Vice President of NBC Sports and a member of the International Olympic Committee. 'As PayTV becomes the norm not the exception, the days of free-to-air broadcasts of big sporting events seem increasingly numbered, particularly in lieu of the enormous fees for broadcasting rights. The sight of 'rabbit ears' on top of TV sets and antennas on the roof will soon be nothing more than wistful nostalgia as analog TV is being rapidly replaced by digital and HDTV broadcasts. The advent of digital and HDTV now allows sports broadcasters in particular a myriad of interactive options and graphic functions that enhance the sports viewing experience.
Indeed, sports holds a unique place in television and society with its ability to deliver a powerful impact on today's youth, inspiring them in their efforts to match and perhaps exceed the accomplishments of champions of the past. The Internet and exciting, new broadcast technologies like HDTV will only serve to underline this impact in an unprecedented fashion.
But even as the global sports TV market grows, domestic sports TV in markets such China are also growing fast. For instance, China's volleyball league regularly attracts more than 10 million households as viewers, enough to sustain a useful advertising revenue stream, and potentially a strong subscriber base. The Chinese Volleyball Association, working with CCTV as a strategic partner, sees a real chance to grow in the next two-to-three years, clearly hoping to benefit from some of the lessons from the 2008 Olympics.
'We are in a very important time right now,' said Ma Guo Li of BoB. 'But the true outcome of the Beijing Olympics won't be felt until long afterwards. Then we will see what we have achieved and how it will change China's sports TV industry forever.'
That could be the world!
The views contained in this column are entirely that of the writer's and do not necessarily reflect the views of Television Asia
By Simon Twiston Davies, CEO, Cable and Satellite Broadcasting Association of Asia
