Monday, February 20, 2012

I'm going to go out on a limb and make one of the most insightful statements ever:

Social media and broadcasting through the internet has helped musicians, actors, athletes, and media franchises expand their horizons unlike any other period in history.

Well I'm sure you don't need me telling you that but this recently came up to my attention because I'm an avid soccer/football/joga bonito (call it what you want) fan. However, I live in the United States where games aren't easily accessible. This usually requires me waking up at around 7 in the morning each Saturday to watch my favorite teams play. The added challenge is that they're usually not on TV so I have to live stream it from providers. The best streams came from a site called FirstRowSports. Each Saturday I would woke up and watched a pretty good quality stream of the game in English commentary, the main attraction of the game. Not to mention it helped me catch some American football games that were "out-of-market."

Why do I mention this? Well, I tried to watch a UEFA Champions League match the other day and found that the domain had been seized by the Federal Government. Why? Apparently, the website was broadcasting the Super Bowl illegally. At first I was confused and thought about the reasons why they would seize the domain. I couldn't think of many good ones. In fact I found some reasons why an action like that would be illegal.

1. FirstRowSports doesn't operate in the US exclusively. It doesn't even have a .com ending (I don't know the technical term). It wasn't in the UK, Germany, or any other country. It was just merely a worldwide source with its own domain enabling people to watch not only English Premier League games, but also other sports like table tennis, rugby, tennis, and some NFL games as well. The federal government justified the seizure with the ACTA bill. Now this should have only applied to people here and not everywhere but there were some irritated people from Europe who wanted to watch out of market football matches and were suddenly unable to.
2. Secondly, this was done over complaints about broadcasting the Super Bowl. I find this one to be quite irrational. The Super Bowl is a great event because it not only attracts millions of viewers in the US, but also gives companies a great opportunity to pay millions to get 30 seconds of ad time and expand their production capabilities. In Europe for instance, most countries found absolutely no problem with the broadcast of the Premier League or the UEFA Champions League across the world. In fact they almost encourage it and regularly boast viewerships 8-10 times the amount that the Super Bowl gets and many times the revenue. FirstRowSports promoted global viewership of European leagues and garnered widespread interest. Does it matter to the leagues if a few million people get access to their games without paying if it means they can increase marketing opportunities? No, so why should the Super Bowl, which is pretty much an exclusive American thing, be limited to within our borders if the goal is to spread American football to other parts of the world too? Will viewers in the UK be willing to make that trip to Wembley to watch two of our average teams play in front of them and market the game? Probably not. It's a marketing opportunity gone to waste.
3. Nothing about the business model seemed sketchy. In the whole midst of the SOPA and PIPA outrage, the website said that viewership was entirely free and the costs for the streams were compensated for by ad time in the form of pop-ups. The pop-ups were a minor inconvenience but we were ultimately entertained. So what's the big problem?

Granted they maybe embellished it a bit to keep the stream going, but who cares? Who is really hurt by this.

The basis behind the protection of artists' intellectual property, the media's revenue sources, and sponsorship interests is one argument behind the recent crackdown on free things in the internet. The idea is that if these sellers of entertainment aren't maximizing revenue, there would be a lower incentive to maintain the high quality standards we've come to expect from them.

I think this argument is totally unfounded. It seems fundamentally sound because people are motivated by incentives but if they're going to argue about incentives I'll argue about margins. In the grand scheme of things, if musical artists are entitled to let's say 10 million dollars from the amount of records sold, would they be absolutely crushed if the amount lost to free downloads was about 2 million? Probably not. Free downloads do not constitute the majority of artist revenues so far so even though there is some money lost, it still lacks marginal value to the artist in question. If their utility depends on that extra 2 million then maybe there will be some artists who will exit. But the market is free and there are millions of people who would gladly sell their music for a fraction of what those artists make. The same can definitely be said of the media in sports ventures. NBC made extravagant amounts of cash this year from the Super Bowl, in the hundreds of millions from ads. If a million people in Australia watched the game for free, would it kill their source of revenues? No, would they file for bankruptcy? No

As for the streaming of soccer games, I'll keep on finding them. For every stream that gets shut down, there will definitely be one that replaces it albeit if not at the same quality. When I buy my own place, then I'll subscribe to GolTV, FoxSoccer, and others because as of right now television is the best medium for games still, other than the stadium. What are your thoughts.

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