Presented by: Jack McGill (MD, QuipuTV – Multimedia Production Start-up)

Quipu TV is a multimedia production company and we specialise in the online live streaming of sport, which is an industry laden with rights issues. But specifically we work with international sports organisations who cannot secure affordable television broadcast deals, thus denying their fans across the world the chance to see the sports that they love.

We’ve developed a business model which provides these sports with multi-camera online coverage that we think is both financially viable and is able to directly target their audience anywhere in the world, taking rights territories completely out of the equation. Last year we were commissioned to produce over a hundred hours of sports coverage that we streamed to 250,000 people in 150 countries. So, why are we doing this?

Well, we know that every sport, every sport has a passionate fan base. One easy example of that is the BBC’s ground-breaking, seminal online coverage of the London Olympics last year, where they streamed absolutely every sport that was taking part in the Olympics, every single one of them attracted more than a hundred thousand unique viewers on just the online platform alone.

We also know that viewer consumption trends are changing and are inexorably moving towards online. The challenge for organisations and sports is to connect with that audience, to engage them, and to retain them. That’s particularly difficult for sports who struggle to deliver live content to their audience.

There are a couple of traditional barriers to producing live coverage. First are rights agreements. Rights agreements signed by major sports for the distribution of television, radio and online content are all multi-billion dollar contracts that soak up commercial revenue to the almost total exclusion of all other sports. The big five are football, cricket, golf, tennis and F1 – to some extent in the UK, rugby as well. They’re all served by the major networks, whose interest in any other sports, particularly in the UK, is extremely limited. The reality of the situation for sports like netball, or handball, or hockey is that they normally can command no fee at all for the rights to their events, and instead must pay the entirety of the production costs if they want a live broadcast.

That leads on to the second reason why live content is difficult to produce for sports – because the costs of television and outside broadcasting are prohibitively expensive, again particularly for any sport that cannot command the kind of fees and commercial revenue of their more illustrious counterparts.

We say to our clients that their key asset is not the rights that they hold, but the audiences that they can command.

So this is where we come in. One of the speakers mentioned the need to produce content in a public spirit. And when we speak to our clients, we say to them that their key asset is not the rights that they hold, but the audiences that they can command. So, we work on a basis where they commission us to produce work and we put at the heart of our pitch to them our desire to work with them to develop and promote their sport by building an audience, rather than to simply create wealth for their sport. Our production and delivery model is not unique, but it’s certainly highly unusual and gives us a competitive edge. It means that we can produce our coverage for as little as ten percent of a traditional television outside broadcast. So our clients can commission us to produce work, confident that it’s affordable, and then can focus their energies on off-setting the cost of production through generating greater global audiences, which in turn will lead to greater advertising and commercial sponsorship of their event.

So, how is this related to copyright provision and how does it affect our business model?
Well, the first thing to say is that major sports, all sports, have an ongoing struggle with internet piracy. Whether its Iraqgoals or My P2P, illegal streaming sites exist and they’re incredibly difficult to shut down. And if you want to find a particular sports event, and there’s a camera filming it, the chances are you can find it. The quality may be poor, and we’ve talked a little about p2p sharing earlier being poor, the quality of a lot of illegal streams is poor. For what you sacrifice in quality you gain in being able to watch at all, which particularly in rights protected sports, territorially protected sports, is key – because there is nowhere else you can get it.

So with an entirely online model, one would think that kind of piracy affects us quite heavily and to some extent that’s true. So I’ll give you a very specific example, of something we experienced last summer on a series of cricket matches that we covered in the Netherlands that was involving Bangladesh’s tour of Europe.

Our business model was quite simple. Ispahani, who are Bangladesh’s largest tea producer, commissioned us to produce live coverage of two Twenty20 matches involving Bangladesh. They paid the production costs and our production fee. We produced the work for them and saturated the coverage with a selection of Ispahani TV ads.

The coverage was exclusively available on Ispahani’s website – except it wasn’t. The coverage could be found on at least three other websites, and by the end of the first match, on two television channels in Bangladesh, much to the annoyance of our client. The appearance on other websites was of secondary concern for us and for the client. They were losing traffic that would otherwise be visiting their site, but the coverage still included all their advertising, so in that respect any viewer regardless of the website they were watching on, would still be being hit with this endless stream of tea adverts. Because it was our video player that was being embedded in the pirates’ sites, we still got the views, we still got the audience analytics, more people were watching and everybody’s still more or less happy.

Television channels on the other hand posed a different problem, as they were opting out of the ad breaks that we were putting in and instead filling those gaps with their own content. So, Ispahani, our client, was gaining nothing, and although we know what the audience analytics were for the online coverage, we have absolutely no idea how many people were watching the two TV channels in Bangladesh that were streaming our feed.

So, we were the only originators of the content, we were the only ones producing the content, so how is the TV station able to broadcast our feed? Well, quite simply as it turned out. They simply broadcast the web page on which our coverage was embedded, almost as simple as pointing the camera at the computer screen, and then pumping it out through their network. It took them, believe it or not, forty minutes to realise that if you clicked the bottom right-hand corner of the video player, you could watch it in full screen!

So these guys aren’t the brightest of pirates. But they were effective. Fortunately, our marketing agent in Dhaka who had set up the deal with Ispahani, alerted us, and we duly instructed out lawyers to start issuing cease and desist letters to both the TV network and the parent company. And this legal threat proved enough to prevent further piracy by any of the TV channels, certainly on the second day, but still left us with the problem of the websites, which despite our best efforts was never resolved.

The net result for us was that Ispahani withdrew their support for a third and final match that was scheduled late on, and we were left with a pretty difficult decision – do we pack up and go home or do we just simply produce the match coverage for free and host it on our own site? We felt the bigger statement was to pack up and go home, but instead we sat down and revised our plan. The television network was happy enough with the quality we were producing for them online and the alternative was no coverage at all – surely they would pay to have the feed delivered directly to them? The Bangladeshi TV network, I think maybe slightly out of guilt, agreed to pay to have their own feed of the game, and instead of live streaming it, it went out on Gazi TV exclusively in Bangladesh.

So it forced us to think differently about the production process, and in conclusion, the experience highlighted both strengths and weaknesses of our coverage and of this particular business model.

Our events are almost entirely free to air, and almost always globally available, which reduces our exposure to copyright infringement. We can create rights territories, we can jail block, but often the events that we cover have participants from all over the world competing, and it would be counter- productive to do so. Working with sports that have not yet established a method of evaluating the potential size of their audience means that we want as many people as possible to see it.

So, why would anybody reproduce something that’s already free? Well, the answer is to drive traffic to their website, and as we discovered, this becomes a problem when the pirates came specifically to drive traffic to its’ own site. So we, in the face of this copyright piracy, we changed our business model – promising this kind of exclusivity to our client is a mistake we’re not going to make again in the future. What we realised was, the more barriers you put in place, preventing people viewing live content, the more likely it is you will become a victim of copyright infringement.

Democratising access to content puts the emphasis onto the revenue you can generate within the content itself, rather than on selling the right to host that content in the first place. The availability of online Olympic Games coverage to African countries who were unable to afford broadcast deals with the Olympic Games organising committee is a good example of that, I imagine Glasgow 2014 will do exactly the same thing. So this will continue to be our model of business for the future. The challenge for us is educating both clients and advertisers of its benefits.