I know what you are thinking. Who the hell is Stan and what does he have to do with Rugby League?
Stan is one of about half a dozen digital content distribution services now established in Australia. For $10 a month you can watch any number of movies or television shows. Its very similar to Netflix.
Stan is a joint venture between Fairfax media and Channel 9. Channel 9 just bought the digital distribution rights to all Rugby League games…and there is only one reason they would do that!
Are we going to see Channel 9 push Stan as the one place you can watch every single game of Rugby League, live and in high definition, on your phone, laptop, tablet and even through your smart TV?
If that is the plan, Channel 9 is setting itself on a collision course with Foxtel.
Foxtel is currently negotiating with the NRL for the remainder of the broadcasting rights. It is expected that Foxtel will pick up the remaining NRL games available and they will likely push to simulcast games that are also shown on Channel 9. If this happens, the amount of money Channel 9 pays the NRL would be lower, but you can expect it to be offset by the amount of money Foxtel pays to simulcast those extra four games per week.
Now…here is where it gets interesting…
If Channel 9 allows Foxtel to simulcast games live on their service, they can still offer live games on their own service via Stan. Basically, when I look at the deal Channel 9 has done with the NRL, I can’t see any way they lose out on the deal. They have the right to show one NRL game per day on Thursday, Friday, Saturday and Sunday. They can then sell their exclusive digital broadcasting of the game through a service they half own.
So, how long before we are being sold on purchasing “Stan” as the only place you can watch games through your mobile devices over the internet?
The Super League War was fought for the simple reason that both Optus and Foxtel NEEDED Rugby League rights to establish a foothold in the relatively new Pay TV market they were establishing in Australia. Optus won the Rugby League broadcasting rights, and Foxtel simply could not afford to lose them…so they ripped the game apart by starting their own competition.
The move by Channel 9 to grab the digital broadcasting rights is brilliant because it gives them the first true draw card for people to take up their Stan digital distribution service. They would no longer have to promote “All the TV shows and movies you love”. They can promote Stan as “The only place to watch every single NRL game, live and exclusive while on the go!”.
This may be enough to move Stan, a smaller player in the digital content distribution market, up to challenge the behemoth that is Netflix, who are currently completely dominate over that new market.
I wrote some time ago that I expected Netflix to use its massive business model to step in and purchase the NRL digital rights. I just thought it would be a logical step for them. Yes, it would get them away from their core business of just being about television shows and movies, but buying the NRL digital rights would have locked them down as a monopoly in the Australian market.
By purchasing the digital rights, Channel 9 now gives “Stan” a fighting chance.
How Foxtel reacts to all of this is anyone’s guess. Simply put, Foxtel has lost the initiative when it comes to their service. With digital content distribution services taking a foothold and people cutting the cord from their Pay TV providers as a result, Foxtel now finds itself in a position where it has a hard sell on its hands.
I know personally, if I can pay twice as much as Stan costs now, $20, and have the ability to watch live games in HD over my internet service, Foxtel gets disconnected in a heartbeat. If I have to pay $20 to watch NRL games on Stan and I get nothing else from their service, none of their movies or their television shows, I am all in!
That is a terrible situation for Foxtel to now be in. This is an old distribution method that’s value simply can not compete with the new players in the entertainment market.
The last time Foxtel found itself in a position anywhere close to this, we ended up going through The Super League War. Don’t for a second think that the sums haven’t been worked out already. This is BIG business. These are industries looking to protect themselves. If it turns out its cheaper to tear the game apart than it is to lose millions of customers and pay for a small portion of the NRL rights, phones will start running hot and the Super League logo will get dusted off again.
I don’t think it will get to the point, but it is certainly an option that some people will be talking about.
Channel 9 securing the digital distribution rights to NRL games was a masterstroke. It is probably the reason why their side of the deal was announced so early. Channel 9 knows they secured the best parts of the NRL’s broadcasting deal at less than the game demanded for its entire deal the last time around.
I wouldn’t be surprised if in five year time Stan was a staple of all NRL fans entertainment budget, and Foxtel was seen as a relic of the past.
$925 million is a lot of money….but I think Channel 9 picked themselves up a bargain.