Saturday 9 November 2013

Two subscription fees are better than one.

BT Sport have recently announced a deal to broadcast live Champions League football matches. According to a BBC News article

"The broadcaster has won the rights to show all 350 matches each season from 2015 after talks with European governing body Uefa. A BT spokesman said it had "shaken up the UK TV market" and would make some games, including finals, free to air. The news is a major blow to Sky and ITV, who currently share the rights."

Undoubtedly, this strengthens BT Sport's position to broadcast live top flight sporting events. An area that has been dominated by BSkyB. An increase in competition in broadcasting live sports events should be welcomed by competition authorities in light of inducing customer choice and more competitive prices. Governing bodies of elite football tournaments, such as the Premier League and the Champions League, act collectively with their member clubs to sell the rights to matches. Member clubs are not permitted to sell the broadcast rights to a match they participate in directly to a broadcaster. This is a monopoly power that potentially restricts the quantity of rights to matches and can inflate the price of them. BSkyB has been the dominant provider of Premier League rights as they could collect high subscription fees in order to out bid competing broadcasters. The combination the monopoly seller of rights and few firms that are able to provide customers with this content has a perverse affect...
As the strength of BT Sport's offering rises, so does it's appeal to subscribe to their services. Football fans now really do have a reason to subscribe to both Sky Sports and BT Sport, doubling up on subscription fees for the football they crave. Shall we just go to the pub to watch the match instead? The impact of revenue of public houses will soon be seen.