Richard MacManus: Time is running out for legacy TV companies

Sports broadcast rights have been one of the sticking points for internet services.
WAYNE DROUGHT/STUFF

Sports broadcast rights have been one of the sticking points for internet services.

OPINION: It won't be long before internet programming is the primary form of entertainment media, usurping once and for all older technologies like television and radio.

It's already happened with music. Streaming services like Spotify, Apple Music and YouTube have made CD players and even MP3 players like the iPod all but obsolete.

We're not quite there yet with other forms of entertainment media, such as TV and radio. As long as TV companies such as Sky TV own the rights to rugby and radio stations like Newstalk ZB continue to attract large audiences, online competitors are being kept at bay.

But time is running out for legacy companies. The big internet players are rapidly making gains across all types of entertainment.

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Netflix and Amazon have already turned into TV networks, thanks to successful shows like House of Cards and American Gods. The next big TV-related move by internet companies will be buying the broadcast rights to global sports.

Companies such as Netflix are producing their own content, such as Orange is the New Black.
NETFLIX

Companies such as Netflix are producing their own content, such as Orange is the New Black.

Last month, there were rumours that Amazon might make a bid for rugby rights in New Zealand. It rings true, because Amazon Prime Video recently began streaming television channels in the UK – including live coverage of the French Open tennis tournament.

The company is now on the lookout for other sports, particularly those with international appeal like rugby and golf.

It isn't just Amazon eyeing up global sports. Social media companies like Facebook and Twitter are also interested. Why? Because live sports will keep people glued to their social apps for even longer every day.

The one problem internet companies face is the lack of immediate options for major sports, says Richard MacManus.

The one problem internet companies face is the lack of immediate options for major sports, says Richard MacManus.

The one problem internet companies face is the lack of immediate options for major sports. For example, ESPN and TNT wisely locked down the rights to NBA basketball until 2025. Nevertheless, there are some enticing opportunities on the horizon.

The rights to rugby from 2021 on, for instance. If Facebook bid on and won those rights, it could be good news for New Zealand rugby fans. Since Facebook earns its revenue through advertising – and not subscriptions – the games will likely be free to watch.

The viewing experience would also be intriguing. Imagine streaming an All Blacks test on your Facebook TV app and at the same time participating in fan conversations on your phone (or in a sidebar on the TV app).

Radio is under pressure from internet native programming too, and not just from the obvious threat of music streaming apps.

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Radio will increasingly find itself competing with on-demand podcasts, such as Stuff's own Black Hands podcast show about the Bain family murders. Black Hands has so far been downloaded nearly 2 million times and is New Zealand's most successful podcast series to date.

I'm not saying podcasts will push Newstalk ZB star Mike Hosking out of a job just yet, because there's a learning curve for new users. It doesn't help that iTunes is still the main delivery platform, because the user interface is terrible.

Thankfully podcasts are beginning to migrate to better apps, like Spotify. I'm also waiting for a breakout app in podcasting, one which removes some of the manual sorting and subscribing hassles.

Modern podcasting apps like Overcast and Stitcher are slick products, but it's still far easier to just turn on your radio when you want something to listen to.

One final issue with podcasts is that much of the content available isn't as professionally produced as Black Hands.

There are gems to be found, for example sports fans will love The Bill Simmons Podcast and Kiwi tech fans should subscribe to a show called Access Granted. Plus of course some radio stations offer their own podcasts; Radio New Zealand makes all of Kim Hill's interviews available that way. But quality shows like these are still in the minority.

So far I've been discussing entertainment options that we in the Western world get to enjoy every day: TV shows and sports broadcasts, radio and podcasts, music streaming. But there's also a massive new global market for Internet entertainment, in places where mobile phones have limited functionality and Internet access is spotty.

Wall St Journal investigation found that hundreds of millions of people in countries like India and Brazil are accessing entertainment on the internet in entirely new ways. These so-called "next billion mobile users" are bypassing textual interfaces, relying instead on voice activation and communicating with images.

Western companies, like Google and Facebook, have adapted to this different type of usage.

For example one use case in India is doing a voice search on YouTube and then downloading video clips to watch offline (using another app, called MX Player).

As for Facebook, the top two markets for its WhatsApp messenger service are India and Brazil. Many people in those countries use group messaging on a daily basis, instead of email and social media. And not just to communicate, but to consume entertainment too.

So all over the world, we're seeing a steady march toward internet programming as the primary form of accessing entertainment. This trend will only accelerate in the coming years.

Watching a live rugby game on Facebook may happen sooner than you think.

* Richard MacManus (@ricmac) founded tech blog ReadWriteWeb in 2003 and has since become an internationally recognised commentator on what's next in technology and what it means for society.

 - Stuff

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