Football - The Killer App?
By Mark Mayne, Tue Sep 11 00:00:00 GMT 2001

Sport is a central theme in Europe. However, with 2.5G firing up, and 3G under starters orders, what will be the issues for the next generation?

Hutchison 3G has recently spent millions acquiring global FA Premier league rights, and France Telecom has also more than toyed with the idea, attempting to gain French football rights. All European operators agree that current SMS-based football services are a winner - is football to be the killer app for 3G then?

Anthony Sheehan, Packetvideo director of developer relations, believes it has a good chance of being so. "We have conducted two trials with Sonera in Finland, showing ice hockey and football clips on an Ipac PDA. Both were very well received - sport is a central theme in Europe, and most of the forward thinking operators are looking at it very keenly, as well as the content owners."

"This is the first time that the FA Premier League has sold mobile rights - we are sure that this deal will provide an innovative range of services," says Richard Scudamore, FA Premier League Chief Executive. Scudamore would not comment as to the place in future for similar deals.

However, according to an industry observer, this kind of new content syndication marketplace will erupt soon, especially considering the lack of room for new paying entrants in other markets such as digital and satellite TV.

"Interestingly, we found that the ice hockey trial in Finland was much better received - as with current content, user personalisation is key here, and regional preferences are reflected strongly. Cycling, such as the Tour De France, is huge in Spain and France, while there are some very interesting moves coming in F1 in the UK. Horse and greyhound racing is another interesting field -a central point is that these sports have to occur during the day while users are mobile, making the service sticky. Another issue is the speed of the sport - fast sports such as ice hockey and football are the most compelling for users, but with the technology we have at the moment they push it to it's limits," adds Sheenan

So in what ways will operators be looking to gain revenue from this opportunity? Richard Lefler, Senior VP Rights and Content at Worldzap a mobile content company, states: "We have to hope operators have learnt their lesson from WAP and SMS - you have to have compelling content to gain users and revenues."

In terms of revenue models, they are going to have to be as creative as possible! I believe that the real winner will be a mix of subscription and betting revenues. This said, there are regulatory issues with the latter, in that betting cannot be handled by the operator themselves - a user needs an account with a 3rd party," he further comments.

Evidently, all agree that ticketing for future events, impulse gambling and to a lesser extent sponsorship and advertising will be deployed as revenue generation tools.

The model seems similar to the current state of play in the Satellite TV market - Sky recently gained 60m pounds up front and ongoing transaction percentages from Ladbrokes for an iTV betting service. Sheenan believes this kind of arrangement will be commonplace. "Sky Text and Ladbrokes is a good example - operators will need to partner very carefully and share their slice of the pie. I don't think pay-per-view will work here - people are very resistant to this, as Sky has shown. Ticketing and gambling will be big, but subscription to a personalised service will be the front runner - people will not want football clips, they will want Manchester United's current match."

Although it is early days yet for 3G, revenue models are at the forefront of operators minds. "We have been considering all the obvious models, but this far ahead of launch it is too early to say what we will launch with. However, it is fair to say that our deal with the FA will be a central plank in our launch strategy," says a spokesperson for Hutchison 3G.

"Billing is an open theatre at the moment - we have a plug-and play billing API ready to go, and several operators are working with this at the moment," agrees Sheenan.

"Football content put Sky on the map in the UK! It's definitely part of the killer service cocktail, if not the killer app in itself. Global rights syndication is a really obvious move, and it's going to happen,' Lefler is keen to point to the opportunities.

"This has got our foot in the door for gaining rights to international events. There is certainly potential here for using this content for GPRS networks, but the real effectiveness comes with full next-generation technology," says an Orange spokesperson.

Hutchison's deal with the FA is already operational, in terms of the fact that the three-year deal's clock is already ticking. This presents an interesting problem, in that their 3G network is not due to launch until Q3 next year. Syndication of mobile content in the meantime would help generate revenue, but raises the issue that Hutchison is a mobile operator, not a content provider.

"It will be interesting to see what alliances are struck here, or will operators begin to act more like media companies? MVNO's such as Virgin could be a great fit here, with both sides of the coin covered," muses Lefler.

Orange has already had it's fingers burnt here - although it announced a deal with Club Europe, a group of six French football clubs, giving Orange access to exclusive rights, the deal has fallen through due to regulatory problems. The French governing body is unsure who actually holds the rights in question - the clubs themselves, or Club Europe. This highlights that operators not used to dealing directly with rights holders may be better off partnering with a specialist company in the long term.

Overall, everyone from operators to content owners agrees that this is an exciting marketplace, and one that will grow exponentially as the technology becomes available. Packetvideo is due to launch a rich-media football portal involving games and original text-based content in Finland within weeks, using GPRS instead of waiting for 3G.

"Operators must move to pricing structures that allow the development of rich media content. Their current models don't achieve this - it is incumbent on them to provide the underlying system for such development, whether billing, carrier charges or traffic sharing," Sheenan comments on the way forward.

Looks like the ball is squarely at the feet of the operators.

Mark Mayne has been covering the wireless industry for the last two years, both as a freelance and a daily news journalist. Previously he worked for the Telegraph and the FT groups.