Global Insight Perspective | |
Significance | The ability to broadcast live soccer matches is a significant differentiator of offerings when it comes to telecoms providers |
Implications | If unchecked, the combination of a quasi-monopoly for the country’s new U$3.9 billion VDSL network and exclusive rights for live soccer matches will further tighten Deutsche Telekom's grip on the market. |
Outlook | Unless the German authorities move to ensure competition, the European Union (EU) will step in, just as it did in the United Kingdom, to bar one broadcaster from owning the entire rights to live matches. |
Less a week after reaching an agreement with the German soccer association DFL about German soccer league rights, Deutsche Telekom (DT) is embroiled in fresh controversies about its intentions to deliver live Bundesliga coverage over its high-speed network. Under the original agreement, Deutsche Telekom was obliged to broadcast the live matches only on its own internet network, and was barred from distributing such content via cable or satellite. Similarly, pay-TV company Arena, which beat Premiere for the right to broadcast live matches on cable and satellite, will not distribute via the internet nor sub-license it to any ISP. However, the terms of that agreement have drawn the ire of rival ISPs (see Germany: 8 June 2006: Deutsche Telekom Wins German Soccer League Rights Dispute and 28 November 2005:Deutsche Telekom Interested in German Pay-TV Football Rights).
Dow Jones reports that Germany's antitrust authority, the Federal Cartel office, is examining the compromise between the DFL and Deutsche Telekom after rival ISPs complained that the incumbent was abusing its dominant position. Rivals, under the banner of Breko - the body representing other telecoms operators - are furious that Deutsche Telekom has subverted their efforts to sub-license internet rights from Arena. 'There is strong suspicion that Deutsche Telekom is trying, in an abusive way, to prevent other telecommunications companies from accessing attractive soccer league content, thereby strengthening its dominant market position in internet provision,' Breko said in a letter to the competition authority. Similarly, German press reports over the weekend (10-11 June) show strong opposition to plans to rename the Bundesliga as T-Com Liga. Der Spiegel reports that the Bundesverbands Deutscher Zeitungsverleger newspaper association has vowed to act to block any such moves.
Meanwhile, Germany's media regulator has said that Deutsche Telekom would probably need a TV licence to broadcast live soccer matches. 'At a first glance, we see this as broadcasting, and for that Deutsche Telekom will need a licence,' Reuters quotes a spokesman for the German media regulator as saying. However, the incumbent contends that it does not need a licence ,as it sees itself as purely an infrastructure provider that does not produce content. 'We assume that we...will not need a licence, because the editorial responsibility will be with Premiere,' a Deutsche Telekom spokesman said. The company had formed a partnership with Premiere, which already owns a TV licence, to broadcast the matches; the operator provides the infrastructure, Premiere packages the content.
Outlook and Implications
- Coping with Complaints: Although concerns and objections have been raised, Deutsche Telekom has won a clear battle to equip its planned internet TV service with the most sought-after TV content in Germany. For a continent passionate about soccer, the ability to broadcast live matches is an easy differentiator when it comes to telecoms providers. By potentially barring other ISPs from sub-licensing the broadcasting rights for live soccer matches, Deutsche Telekom has gone ahead of its rivals, including those who got into the IP TV market first. Live Bundesliga matches on its network will be the icing on the cake for the planned roll-out of IP TV services over the new US$3.9-billion high speed VDSL network. However, if unchecked, the combination of a quasi-monopoly for the new VDSL network and exclusive rights for live soccer matches will further tighten Deutsche Telekom's grip on the market (see Germany: 15 May 2006: HanseNet Offering Internet TV and 12 May 2006: HanseNet Selects Alcatel for Triple-Play Roll-Out ).
- Following the Trend: The German incumbent is not alone in its quest to secure broadcasting rights for live soccer. Across the continent, TV operators are busy snapping up potentially lucrative TV rights in anticipation of the push into TV and video-on-demand (VOD) services. While some operators have paid a fortune for the exclusive rights, moulding their IP TV strategies around offering live soccer matches, others have diversified their content pool, spending less money on individual rights but grabbing a bigger basket of content services to enrich their IP TV offering. However, unless the German authorities move to ensure competition, the EU will step in, just as it did in the United Kingdom, to bar one broadcaster from owning the entire rights to the live matches. Deutsche Telekom has partnered Microsoft for its planned IP TV launch (see United Kingdom: 26 May 2006: BT Wins Broadcasting Rights for Near-Live Premiership Soccer, 10 April 2006: Concerts on Offer for BT Vision TV, Belgium: 31 March 2006: Belgacom Behind Schedule on IP TVand Germany: 22 March 2006: Deutsche Telekom Signs Microsoft for IP TV Deal).