Markets

Feb 13, 2012

Thinking of the kids as the net flattens information hierarchies

Attempts to legislatively address the TV Now "problem" will fail - and the solution is staring rights holders in the face.

Bernard Keane — Politics editor

Bernard Keane

Politics editor

Eventually it had to come down to the kiddies, didn't it? Roy Masters invoked the threat Optus' TV Now posed to junior football in passing last week, before being buried under an avalanche of online criticism. Yesterday Mark Arbib, who for reasons clear only to Julia Gillard is Assistant Treasurer and Minister for Sport, went further and practically had Optus executives shutting down kids' footy across the nation. "As a sports minister the reason I am concerned about that is, when it plays itself out, that the big losers will be those kids out on the sporting playing fields." The internet of course is responsible for many crimes against humanity -- p-dophilia, terrorism, organised crime, most of my articles -- but stopping kiddies from having a kick about and a run around is about the lowest yet. It's probably part of a plot to get more kids to sit at home and surf the internet. What is slightly problematic, however, is that even in the unlikely event of the complete loss of the $153 million the AFL was earning from Telstra for its online rights, it's a fraction of the amount sports rights holders have lost to the commercial free-to-air television cartel due to the anti-siphoning scheme, which "celebrates" its 20th anniversary this year. The anti-siphoning scheme works by eliminating competition for the rights to televise sports, ensuring the free-to-air TV cartel are the only bidders. This accordingly reduces the revenue sports rights holders can get for their product. It's a vast, state-sanctioned transfer of wealth from sports clubs and organisations to the networks. And while it may not be so bad for the big sports AFL, NRL and Cricket Australia, it was savage in its effects on lower-tier sports such as soccer and netball, which are various stages found themselves entangled in the anti-siphoning net. Stephen Conroy made some commonsense changes to anti-siphoning in December 2010. If Mark Arbib (a name made to be yelled by a league commentator) is really that concerned about ensuring sports rights holders have the maximum amount of money to direct to junior development, he should urge cabinet to go further and let sports rights holders get full value for their rights. Of course, the world doesn't work that way. Well, at least Australia, a land where getting sports coverage free is considered one of the natural rights of mankind (with the emphasis on man), doesn't. TV Now of course is the exact opposite of anti-siphoning. Anti-siphoning reflects a 20th century way of thinking, in its desire to perpetuate existing analog-era information hierarchies against innovation and competition. That of course has been how media policy in Australia has been historically run -- for the benefit of the incumbents, against the threat of new entrants, such as Foxtel, which under Kim Williams became Australia's most innovative big media company despite the restrictions the FTA cartel locked it into. But the internet -- in this case via cloud computing -- flattens information hierarchies, and makes their maintenance much harder, because once information is created, its control is now far more difficult. It will spread through a network and leak through to users at whatever point is porous enough to make it easily accessible. Live sport is a special case -- its value is time-limited. There's no market for mass consumption of live sports more than a few hours after the event is completed. But the same forces are at work, the push of easily distributed content and the pull of consumer demand at the lowest price and the greatest convenience. It's all just zeroes and ones, platform agnostic, user agnostic, distributor agnostic, owner agnostic. Indeed, Optus is to be commended for establishing a business model that brings together supply and demand like this. It's the same story repeated time and again -- analog-era gatekeepers struggle to work out how to develop a business model for online distribution, while a digital native comes in and creates one for them, resulting in the gatekeepers running to government to fix the "problem". In fact, the "problem" is a solution, just one seen from the point of view of someone who didn't think of it. One should have some sympathy for the big sports, however: having been ripped off by the FTA cartel for years, they doubtless have zero tolerance for additional threats to their revenue. But if the government decides to take legislative action, it will be a form of whack-a-mole, albeit at the glacial pace of legislation, in the manner of a statue trying to brush away a defecating pigeon. Then again, this sort of game is the emerging tradition in online sports content -- the US government, via the Departments of Justice and Homeland Security, furiously tried to close dozens of illegal sports-streaming websites before the Super Bowl. Since American football players themselves admit to using such sites, their control looks a forlorn hope. The issue has yet to emerge in a serious way in Australia, but the England and Wales Cricket board recently declared internet streaming the biggest threat to the game. As we see time and again, if content is being provided cheaply, conveniently and wherever and whenever users want it, people will pay for it. That's the solution, not yet another attempt to regulate the internet. *Disclosure: Bernard Keane played for Maroubra Lions junior rugby league club 1975-76, 1978

Free Trial

You've hit members-only content.

Sign up for a FREE 21-day trial to keep reading and get the best of Crikey straight to your inbox

By starting a free trial, you agree to accept Crikey’s terms and conditions

4 comments

Leave a comment

4 thoughts on “Thinking of the kids as the net flattens information hierarchies

  1. Mark Heydon

    If the government were to follow some of the recommendations set out in its own Crawford report, and spend more money on grass roots sport rather than continually increase funding for the elite via huge payments for olympians/AIS (not to mention subsidies to CA, NRL etc via funding things such as the SCG upgrade), then kids sport would not be hostage to the revenue the sporting administrators can wring out of broadcast rights.

    And what happened in 1977?

  2. floorer

    That’s a try Bernard. Cheers.

  3. Meski

    It’s like Godwins law. When you resort to “won’t you think of the children” that’s an automatic fail.

  4. Gerry Hatrick, OAP

    It’s a great big new tax on Kids Football! I’m sure JuLIAR secretly plotted to omit this in the laws when they were created, crushing the Strayan dream!
    /sarcasm

Share this article with a friend

Just fill out the fields below and we'll send your friend a link to this article along with a message from you.

Your details

Your friend's details

Sending...