Telstra had until the end of March to
strike a new deal with the AFL on internet rights but the silence means
it is now open to rival bidders and Australia’s most popular football
code could be about to see a substantial increase on the $5 million a
year that the telco was paying.

The AFL is shopping around its
internet rights from 2007 covering 3G, broadband, live, delayed,
downloadable games and downloadable archival matches which might all be
sold off separately. Telstra paid $20 million for the rights from 2002
until 2006 but media buyer Harold Mitchell has gone public predicting the new deal could fetch $100 million over five years.

So
who has come in with some very serious enthusiasm and dollars? Crikey
hears it’s none other than the Microsoft-PBL joint venture, NineMSN,
which itself is up for renegotiation next year. James Packer and
Telstra CEO Sol Trujillo have been meeting and getting on swimmingly of
late, so don’t be surprised if Telstra joins the NineMSN bid to
reinvigorate the pretty ordinary service it has provided AFL club.

The
rationale for both Nine and Microsoft is defensive and quite
compelling. Microsoft wants to prevent Apple’s iTunes from being able
to
offer football as convenient podcast downloads. In the US, iTunes
offers all major sports shows and match replays as downloads and
podcasts, whereas iTunes Australia lacks this killer application.

It
would also mean Microsoft could maintain its Windows Media as the
default media format, as opposed to the much better (and iPod
compatible) Apple Quicktime Format or RealPlayer format.

Microsoft
is feeling very threatened by Apple’s ascendency in content delivery,
which is why some observers believe they are looking to buy
Bertelsmann’s 50% stake
in the Sony BMG joint venture. Microsoft would love to control half of
this massive music company and therefore define an online strategy that
excludes iTunes, thereby making the music store less attractive.

Nine
wins because they can maintain a foothold in AFL, keep their talent,
have their own productions and sell AFL to their advertisers – in the
new medium which is catching up with free-to-air television and pay-TV
at a rate of knots.

Rupert Murdoch is feeling similarly
threatened by Steve Jobs. Has anyone else noticed that ABC, NBC, MTV
Networks and Showtime all have programs on iTunes in the US, yet News Corp has launched its own poor man’s version of iTunes called Mobizzo through US phone companies? Maybe Rupert should just pay Jobs his fee and be done with it.

To see how backward Australia is, just check out the video section of the Australian iTunes
site which doesn’t have much more than self-licensed Pixar material.
This largely reflects the conservatism and power of Australia’s
broadcast networks and program makers who have not yet embraced iTunes
for Australian content, partly because our broadband is so slow.

Seven
and Ten will presumably want to ensure that this continues with its new AFL
broadcast rights deal, but the NineMSN approach raises plenty of
interesting questions. For instance, what would a big NineMSN play for
the AFL internet rights mean for its commitment to Fox Sports sharing
the burden of Seven-Ten’s over the top bid for the free-to-air rights?

Peter Fray

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