Pursuing also costs money
Skyrocketing Prices for Sports Broadcasting Rights – The Marketing Industry Faces Enormous Pressure to Innovate
Exploding prices for sports rights - marketing is under enormous pressure to innovateBy Daniel Schifferle Expensive to buy and produce, unpopular with advertisers: booking sports programs is an uncertain business and demands more inventiveness from Publisuisse than any other environment. After all, more income would be necessary if the sports events with high ratings are to continue to be shown on SF DRS in the future.
The rights costs for the Olympic Games, European Championships and World Cup have soared to spherical heights over the last twenty years. The examples speak for themselves: in 1984, CHF 29.2 million flowed into the coffers of the Summer Olympics in Los Angeles, in 2004 it will be twenty times more in Athens, namely CHF 591 million. In the same period, the rights costs for the Winter Games have multiplied by a factor of thirty.
However, all this is a mere pittance compared to the DM 3.2 billion paid by the Kirch Group for the 2002/2006 World Cup. A side effect of the price explosion: fewer and fewer players are haggling over the vertically climbing rights prices for hot sporting events. No wonder, then, that SF-DRS head of sports Urs Leutert does not know where Swiss television's position will be in the longer term in the sports rights market, which is developing into a cartel.
Pain threshold reached - no pay TV for ice hockey yet
No need to worry just yet: SF DRS has booked the Olympic Games, European Football Championships and World Cup for the first half of this decade, and the bouquet of other popular highlights such as Alpine ski races, Formula 1 and cycling remains plentiful for the time being. But with the 120 million francs for sports programs, the pain threshold has now been reached.
Better use of exploitation chains, the magic word with which German private broadcasters are trying to better finance their sports offerings, could help. However, the small Swiss market offers few prospects. This has now been confirmed by a study by SF DRS. It specifically examined the possibilities of secondary exploitation of ice hockey rights via pay TV.
"Financially, it would never pay off," Leutert sums up the result, "which is why we won't be pursuing it any further." This conclusion is not surprising. Experience in the much larger German market has also been sobering in terms of viewers' willingness to pay for sports pay TV.
Foreign broadcasters give
set the tone
However, if the sports programs are shown on free or public TV, interest is huge. Major sporting events regularly top the market share charts. And: Swiss viewers want to watch sports broadcasts on SF DRS. "Despite the sometimes somewhat bumpy style," says Head of Sport Leutert.
As far as the standard of sports reporting is concerned, the foreign channels set the pace and direction: Sat1 for football, RTL for Formula 1 and Austria for the ski circus. "And we are constantly chasing after these increasingly sophisticated standards," Leutert notes self-critically.
Creativity and the innovative power of advertising are in demand
The marketers of advertising environments in the sports sector are no less challenged. Paradoxically, measured against their ratings, the programs bring far too little money into Publisuisse's coffers.
The reason for this is that sports programs are at odds with the planning routines of media agencies and are therefore considered unattractive. Sports programs are short-term, unpredictable and subject to frequent cancellations. With so many disadvantages, otherwise valid arguments such as an extremely advantageous CPM are hardly convincing.
Special efforts and creativity are required. This is why Publisuisse created the position of PM Sport in the fall of '99. The job holder Ole Rauch's task: to increase revenues from the sports environment with more customer-oriented advertising offers.
Minimizing risk is one of the most important tasks. The latest Publisuisse offer includes a performance guarantee with
a cost ceiling for a specific series of competitions. If there are more matches than planned, the customer receives the additional service free of charge; if competitions are canceled, the customer does not pay for them either. "The advantage: we can communicate these offers at the end of the year and still get involved in the customer's budget planning," says Rauch. To ensure that this happens, a little extra is included: Anyone who registers on the
Publisuisse homepage interested in the sports packages can take part in a competition.
Hardly any use for virtual advertising
Internationally, marketers are taking innovative approaches to better exploit the potential of sports advertising. FIFA has allowed virtual perimeter advertising since the beginning of the year, and this has been possible in Germany since the beginning of April.
"No demand from us," Leutert waves it off. And Leutert has already ruled out the latest possibility of gaining additional advertising space with so-called GetUps for Switzerland. GetUps, carpets next to the goal that appear as additional boards when the camera is set up accordingly, are "bordering on surreptitious advertising" according to Leutert.
The rights costs for the Olympic Games, European Championships and World Cup have soared to spherical heights over the last twenty years. The examples speak for themselves: in 1984, CHF 29.2 million flowed into the coffers of the Summer Olympics in Los Angeles, in 2004 it will be twenty times more in Athens, namely CHF 591 million. In the same period, the rights costs for the Winter Games have multiplied by a factor of thirty.
However, all this is a mere pittance compared to the DM 3.2 billion paid by the Kirch Group for the 2002/2006 World Cup. A side effect of the price explosion: fewer and fewer players are haggling over the vertically climbing rights prices for hot sporting events. No wonder, then, that SF-DRS head of sports Urs Leutert does not know where Swiss television's position will be in the longer term in the sports rights market, which is developing into a cartel.
Pain threshold reached - no pay TV for ice hockey yet
No need to worry just yet: SF DRS has booked the Olympic Games, European Football Championships and World Cup for the first half of this decade, and the bouquet of other popular highlights such as Alpine ski races, Formula 1 and cycling remains plentiful for the time being. But with the 120 million francs for sports programs, the pain threshold has now been reached.
Better use of exploitation chains, the magic word with which German private broadcasters are trying to better finance their sports offerings, could help. However, the small Swiss market offers few prospects. This has now been confirmed by a study by SF DRS. It specifically examined the possibilities of secondary exploitation of ice hockey rights via pay TV.
"Financially, it would never pay off," Leutert sums up the result, "which is why we won't be pursuing it any further." This conclusion is not surprising. Experience in the much larger German market has also been sobering in terms of viewers' willingness to pay for sports pay TV.
Foreign broadcasters give
set the tone
However, if the sports programs are shown on free or public TV, interest is huge. Major sporting events regularly top the market share charts. And: Swiss viewers want to watch sports broadcasts on SF DRS. "Despite the sometimes somewhat bumpy style," says Head of Sport Leutert.
As far as the standard of sports reporting is concerned, the foreign channels set the pace and direction: Sat1 for football, RTL for Formula 1 and Austria for the ski circus. "And we are constantly chasing after these increasingly sophisticated standards," Leutert notes self-critically.
Creativity and the innovative power of advertising are in demand
The marketers of advertising environments in the sports sector are no less challenged. Paradoxically, measured against their ratings, the programs bring far too little money into Publisuisse's coffers.
The reason for this is that sports programs are at odds with the planning routines of media agencies and are therefore considered unattractive. Sports programs are short-term, unpredictable and subject to frequent cancellations. With so many disadvantages, otherwise valid arguments such as an extremely advantageous CPM are hardly convincing.
Special efforts and creativity are required. This is why Publisuisse created the position of PM Sport in the fall of '99. The job holder Ole Rauch's task: to increase revenues from the sports environment with more customer-oriented advertising offers.
Minimizing risk is one of the most important tasks. The latest Publisuisse offer includes a performance guarantee with
a cost ceiling for a specific series of competitions. If there are more matches than planned, the customer receives the additional service free of charge; if competitions are canceled, the customer does not pay for them either. "The advantage: we can communicate these offers at the end of the year and still get involved in the customer's budget planning," says Rauch. To ensure that this happens, a little extra is included: Anyone who registers on the
Publisuisse homepage interested in the sports packages can take part in a competition.
Hardly any use for virtual advertising
Internationally, marketers are taking innovative approaches to better exploit the potential of sports advertising. FIFA has allowed virtual perimeter advertising since the beginning of the year, and this has been possible in Germany since the beginning of April.
"No demand from us," Leutert waves it off. And Leutert has already ruled out the latest possibility of gaining additional advertising space with so-called GetUps for Switzerland. GetUps, carpets next to the goal that appear as additional boards when the camera is set up accordingly, are "bordering on surreptitious advertising" according to Leutert.
