When Manchester United paid &£19m for Ruud van Nistelrooy there were some who thought the Premiership champions were taking a massive gamble. The Dutch man had, after all, missed most of last season with a serious injury and Man Utd’s previous attempt to sign him had broken down after he failed a medical.
But with the start of the Premiership just three weeks away the people taking the real gamble this year are not the likes of Man Utd – which has subsequently brought its summer spending to &£47m by signing Juan Sebastian Veron for &£28.1m – but those broadcasters who are leaping into the unknown territory of pay-per-view (ppv) football. For the first time at 2pm on Sunday August 19 the Premiership will have a pay-per-view element. Sky Sports will continue to show live games, 66 this season, as it has done for the past ten years but Sundays – and occasionally Saturdays and midweek nights – will also offer football fans the opportunity of parting with more money to watch 40 ppv games over the season.
The big question is whether anybody wants more football. And, if they do, whether they are willing to pay any more for it. I have never met a football fan who says that they can’t wait for pay-per-view. I haven’t even met one who is anything other than deeply cynical about yet another method of watching football and paying more money to broadcasters for the pleasure.
According to TV Sports Markets, last season saw another fall in the average TV viewing figures for both the Premiership (Sky Sports suffered a fall of nine per cent to 1,092,000 for its live matches) and Uefa Champions League football. Only the FA Cup saw improved viewing figures for 2000/2001, but that is in comparison with a disastrous 1999/2000 season when Man Utd opted out of the competition.
Those figures suggest that the audience for football is at best static in a market which is now saturated (there may be as many viewers but they are the same ones watching all the football). I am sure that the consortium members – BSkyB, ITV Digital [formerly ONdigital], Telewest and NTL – which struck a &£180m three-year ppv deal with the Premier League earlier this month have done more sophisticated market research than I have.
Pay-per-view sport in the UK has only worked when there is a premium value on the event. The record ppv audience in the UK remains the 600,000 subscribers who paid to watch Mike Tyson defeat Frank Bruno in the mid-Nineties. The ppv experiments with football in England and Scotland – a total of eight matches stretched over three seasons – do not give any real indication of demand.
But 40 games per season certainly kills any idea of premium value. Especially as they are the second choice matches each weekend – Sky retains first choice. This explains why the first ppv match is of Chelsea’s foreign legion hosting Newcastle United while two hours later Sky will broadcast Man Utd against Mohamed Al Fayed’s Fulham in a far more intriguing encounter.
In some ways Chelsea-Newcastle is an ideal pay-per-view match. Newcastle has a huge fan base and Stamford Bridge, home of Chelsea is almost 400 miles from the North-east. The broadcasters are hoping that the away fans will make up the bulk of ppv audiences – Man Utd feature as the away side in two of the opening three fixtures.
A lot will come down to pricing. At least three of the four broadcasters are offering “season tickets” for all 40 matches priced between &£50 and &£60, or alternately, as in the case of Telewest and Sky, &£8 for individual games. Interestingly NTL, which 12 months ago struck an exclusive &£328m ppv deal with the Premier League only to pull out last October when it realised that the figures did not add up, has yet to reveal its pricing policy, although presumably it has had longer to construct one than the other consortium members.
At the moment the broadcasters are promoting the new service to their existing subscribers. But there is an argument that the four broadcasters should pull together for a joint marketing campaign to promote ppv to a wider audience. However, for such big rivals, a joint campaign is unlikely – they will all be trying to pinch viewers because any money to be made on ppv will be at the margins. Sky is in a no-lose situation because it already has the most football subscribers and will have a big say in the success of ppv.
The plan for all four must surely be to keep the cost down while maximising the cross-over for existing subscribers. For the first year or two it may even be a loss leader – an opportunity to run a proper experiment for the technology. It poses some interesting questions: for instance, which platform will have the most success? Sky has the experience and will also handle the production on the ppv games, although all four broadcasters will create their own preand post-match programmes.
But the most pressing question remains whether fans will sign up for pay-per-view. Last season’s Premiership was viewed by many as the poorest for some time, which partly explains the fall-off in viewing figures for the live matches. Man Utd won the title with ease and the bookies believe they will do so again this year. If the season is over with weeks to spare, there will be little reason to pay out &£8 to watch meaningless end-of-season fare. Van Nistelrooy might be a gamble but it is easier to see how that gamble will pay off and much more difficult to see how the broadcasters will make ppv pay its way.
Tom O’Sullivan is sports page editor of the Financial Times