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Thread: Pay per view anyone? How it could be the billion dollar All Blacks.

  1. #1
    Senior Player SPaRTAN's Avatar
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    Pay per view anyone? How it could be the billion dollar All Blacks.

    Wow, the math say it is easily achievable. Not sure if going down this route has any merit though as it would turn the All Black brand into a niche brand accessible by those with money or in the know..

    Rugby: How it could be the billion dollar All Blacks


    1 Sep, 2018 3:30pm 7 minutes to read
    All Blacks with the Bledisloe Cup after defeating the Wallabies. Photo / PhotosportAll Blacks with the Bledisloe Cup after defeating the Wallabies. Photo / Photosport
    Gregor Paul
    By: Gregor Paul
    Sports writer
    gregor.paul@nzherald.co.nz


    It's interesting to say the least that the All Blacks hit up the Government for a cash injection on a night that almost one million people in New Zealand watched them destroy the Wallabies.

    According to data obtained by the Herald this week, an estimated 985,000 people watched the second Bledisloe Cup test at Eden Park with almost 700,000 paying to do so on Sky.

    Interesting because this makes you wonder why New Zealand Rugby is running at an estimated operating loss of between $5 million and $7 million annually.

    Those viewing figures from the test last weekend don't include the number of people watching on Fan Pass or Sky Go.

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    The bottom line here is that the All Blacks, as everyone kind of knows already, have enormous pulling power.

    Regular market research has shown the All Blacks to be as recognisable as some of the leading football and basketball brands, while their brand value soared past the US$200 million ($282m) mark in June last year, according to global brands consultancy Brand Finance.

    The top-ranked football brand, according to Brand Finance's research, was Manchester United at US$1.7 billion.

    They are a broadcaster's dream a nearly infallible brand in the sense that they never disappoint.

    The rest of the world wants to knock them off a perch they have sat atop for decades and that in itself ensures there is always heightened anticipation whenever they play.

    When they are pitted against a minnow, there is the intrigue of seeing how the inevitable next generation All Blacks, who are tasked with dispatching the likes of Italy and Japan, take to the test arena.

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    Beauden Barrett breaks away up field heading towards the try line. Photo / Photosport
    Beauden Barrett breaks away up field heading towards the try line. Photo / Photosport
    And despite all the moaning about the lack of competition in the Rugby Championship, that didn't stop the All Blacks from being utterly compelling at Eden Park.

    Who didn't marvel at Beauden Barrett? Who didn't wonder where Ben Smith was going to pop up next? And who cared whether the Wallabies' forwards might be a little saggy and lacking, it was still amazing to see Brodie Retallick rip the ball off them whenever he felt like it.

    The point is that the All Blacks don't necessarily need the opposition to do much, or indeed anything, for the viewing spectacle to be unforgettable hence, they are a broadcaster's dream.

    And hence the question now arises about what the All Blacks' broadcast future should look like, especially as the current revenue model is not delivering enough money for NZR to run a sustainable business.

    Negotiations about the next broadcast cycle will soon begin as the current deal expires in 2020.

    The question for NZR can be simplified to whether they persist with the type of agreement they have had in place since 1996 or whether they are willing to go down the road of more risk for potentially much higher reward by trusting the power of the All Blacks' brand?

    Maybe it is too simple but it does seem that NZR could do what they have always done and sell the rights to one broadcaster in New Zealand and sell them to another broadcaster in UK and Europe.

    That's what they do at the moment and it nets them about $70m a year.

    The beauty of that is they have a guarantee about their income stream for five years.

    They can plan with certainty because they know what the balance sheet looks like short and longer term. It has worked well for them.

    But the world has changed dramatically since they signed their last broadcast deal and quicker than anyone forecast, households around the developed world have nailed this streaming business.

    What seemed unfathomable only a few years ago, is now suddenly a doddle for even the most technologically challenged. The fear of streaming has gone and so too has the lurking sense that it was a fad doomed to fail.

    More people in New Zealand now watch streaming services on a daily basis than watch terrestrial TV and to think, no one in New Zealand even knew what Netflix was a few years ago.

    A nation of Luddites is now ready to the point of almost expecting to have unrestricted flexibility as to how they consume live sport not so much in the way it is delivered, more in the way they have to pay for it.

    Sonny Bill Williams takes a selfie with a fan. Photo / Photosport
    Sonny Bill Williams takes a selfie with a fan. Photo / Photosport
    The days of being locked into a monthly subscription are gone. For some that will still be the preference, but the market is conditioned now to paying for what they want not for what they get.

    So what if NZR choose not to sell the rights to one broadcaster and instead turn the All Blacks into a pay-for-view phenomenon?

    If one million people in New Zealand watched the All Blacks last weekend, what might the size of the global audience be? No one should doubt the awareness of the All Blacks' brand in nations such as France, USA and Japan.

    There will be complexities of working out the landscape in relation to other media agreements the All Blacks' opponents make and how exactly the ticket is clipped, but the basic principle of NZR going down this road demands full exploration.

    What if another million people outside New Zealand are willing to pay US$10 to stream a Bledisloe Cup test? What if it is two million and they will pay US$20?

    As an example, the Conor McGregor v Floyd Mayweather mega fight in August last year was sold in New Zealand for $39.90, a bargain compared to some prices in America of nearly $140. Joseph Parker's last two fights were priced at $49.99 by Sky in New Zealand.

    Start doing the math and the numbers are dizzying. Could the All Blacks actually earn $20 million a test? Could it be $40 million or $60 million? Could the true price of their broadcast value be $1 billion a year rather than $70 million?

    Last season the All Blacks played 14 tests, 16 games in total. If we have a total of two, possibly three million viewers (in New Zealand and abroad), willing to pay $20 per All Blacks test, then their broadcast value could very well approach the billion-dollar mark.

    It's a risk of course because what if they can't? What if it turns out that the All Blacks aren't actually the big-ticket item they appear to be?

    Consumers aren't always easy to predict and however illogical, it might be that transitioning to a pay-for-view model leads to viewers running for the hills strangely confronted by the prospect of it all.

    But that seems hugely unlikely for two reasons: one, the market has shown an appetite for this set-up in other sports particularly boxing and the All Blacks have such a long track record of success that they really do have a massive and loyal following.

    The bigger risk, and it isn't so much of a risk as an inconvenience, is that NZR will lose certainty about its revenue and will also have an entirely different cash flow.

    Some of that risk can however be mitigated by selling Super Rugby rights under the existing model and more importantly, realising the broadcast value of the Black Ferns.

    NZR didn't need to go cap in hand to Jacinda Ardern last week they just need to understand and embrace the changed world of media consumption.

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  2. #2
    Veteran Bakkies's Avatar
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    I believe they have been discussions with Amazon for some time. Maybe that is where Twiggy comes in too as he said at the IPRC launch that he will be looking at various broadcasting options.

    Interesting because this makes you wonder why New Zealand Rugby is running at an estimated operating loss of between $5 million and $7 million annually.
    Their overheads include contracting all professionals and funding NZ Rugby as a whole. The NZRU consists of at least 26 unions (was 27 until the formation of Tasman).

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    Senior Player SPaRTAN's Avatar
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    Quote Originally Posted by Bakkies View Post
    I believe they have been discussions with Amazon for some time. Maybe that is where Twiggy comes in too as he said at the IPRC launch that he will be looking at various broadcasting options.



    Their overheads include contracting all professionals and funding NZ Rugby as a whole. The NZRU consists of at least 26 unions (was 27 until the formation of Tasman).
    Yeah the whole Amazon thing has been talked about for a fair while. This seems like an actual PPV platform, whether this be there own one through there TeamAllBlacks page they had going a while back where you could order in some of the mid week All Black tests which weren't broadcast in Australia. This cost around $10 from memory, it was an All Black vs France XV game and a Maori vs France barbarians game or something and it actually worked really well. So they have had a trial run at doing it all by themselves. I would assume this would be through the sky and fox PPV platforms in NZL AUS and the UK with other countries using their predominant PPV platforms or still be on regular pay or terrestrial TV.

    Interesting times and I still wouldnt rule out the Amazon connection. Amazon have just done a huge series special on this current All Black team so I reckon they will be wanting alot more future content

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  4. #4
    Veteran Bakkies's Avatar
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    I can't see it being Netflix they haven't shown any indication of going in to sports. They would have to jack up their monthly subscription price to pay for rights and the cost of broadcasting (we have already seen that happen with BT). Their biggest selling point is their price.

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