Saturday, May 28, 2011

We’re going to pay for all this free stuff

Ultimate Fighting, a mutant blend of martial arts and street brawling, is wildly popular in the US and globally with pay TV revenues bigger even than boxing. People pay up to 45$ a go for live access to the bouts but it is a sport under attack.

Everytime the Ultimate Fighting Championship (UFC) promote an event, illegal pirate broadcasts of the pay-per-view event spring up relentlessly all over the internet – up to 200 on a single US video streaming site and many more around the web often in jurisdictions beyond the reach of US copyright law. It's like the 45$ PPV charge is becoming voluntary.

As this article from BusinessWeek makes clear – ProSports vs. the Web , it is not just UFC that is fighting a losing war against internet piracy. Every single baseball and football game in the States was available free and live (and illegally) last season online.

Do we care that this 220 million dollar business is under threat? Ultimate fighting has been called “human cockfighting” and maybe we should not weep over the demise of a business model that depends on getting men to pay a lot of money to watch other men getting beaten senseless.

But it’s a sign of the times – the disruptive force of the internet is gathering strength and portends some surprising and dramatic results.

For rights owners in the broadest sense, it’s not looking good. If what happened to recorded music (80-95% of content consumed for free with prices for the legal stuff way down) is anything to go by, the results of rampant piracy could destroy business models across a range of industries - sport, movies, TV, books, games.

For example, it is easy to foresee the value of football's Premier League TV deals going down significantly as more people get used to going online to see games illegally. This could get very serious when it is common place to link the TV to the internet and everyone can easily get pirated games in their living room. I could see football club's revenues in the big European leagues dramatically declining.

Will we as the consumers of entertainment end up suffering? I think so. It has been argued that music is still here despite the amount of illegal downloading going on - musicians can make money in other ways like more live shows. But the effects have yet to really filter through - high prices for recorded music have traditionally supported the promotion of new acts and maybe we will see a dearth of new bands in the future. I also worry for the future of the kind of films and TV shows I like - they are expensive to make and if noone wants to pay, even by watching advertising, then who will make them? At this moment in time, the internet's attack on expensive charges for entertainment looks like its all good news for us consumers but I suspect that within a few years the downside will be all to clear.

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