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Why court ruling on right to free TV through mobile could actually benefit TV networks

Yesterday the Australian Federal Court made a media content ruling that has direct implications for the value of content in Australia and could see similar cases being brought in other countries.

Why free mobile broadcasts of TV didn’t infringe copyright

Optus, the country’s second largest telco successfully defended its right to rebroadcast free-to-air sports TV coverage over its 3G mobile network without paying for it. Telstra (the country’s largest telco), the Australian Football League (AFL) and National Rugby League (NRL) had accused it of copyright theft. Telstra had paid A$153m for what it thought were exclusive rights to broadcast AFL and NRL games live over its 3G mobile network.

Optus successfully argued that it was behaving like a personal video recorder (PVR) rather than a mass broadcaster. When an Optus subscriber requested a particular TV program, Optus started to record it specifically for that customer, and the customer could then start to access it a minute or so later.

While the Optus ‘TV Now’ service was not quite live, is was close enough to make Telstra angry about all the money it had forked out for exclusivity.

The judge concluded that because Australia’s 2006 Copyright Act allows individuals to timeshift content that they have a right to view, there was no copyright theft.

Given that most other countries allow TV on Demand services like BBC iPlayer to be run without copyright breaches, it seems reasonable to conclude that near live broadcasting of valuable TV content through phones will become the norm elsewhere.

What does this mean in Australia and elsewhere?

  • Telstra can ask for its $153m back and join Optus in rebroadcasting free-to-air TV
  • Video rights cannot be sold on the basis of media channel – if someone has the right to view over TV, they have the right to view on a slight timeshift basis over other devices
  • Sports rights holders overall income is likely to fall
  • TV networks have a new advertising channel to exploit

This last point could be a real positive and a reason why TV networks may be willing to pay a little more for TV rights.

A new revenue stream for TV networks

As a TV business, if you know that a sizeable part of your audience is going to come from mobile or tablet viewing, why not give the phone networks special feeds that include internet based ads rather than standard TV commercials?

Those ads can be contextual and user targeted just like ads over the web and mobile are now. Revenue per view could be much higher than mass TV advertising. If the mobile user is male, aged mid twenties and located in a pub serving a certain brand of beer, advertise that beer. If the viewer is female and has recently browsed articles about fashion, advertise a complementary female fashion brand.

Users that skip ad breaks on fast forward could either trigger a lower payment rate by advertisers (in return for a higher rate if users view them) or get fed ads with prominent images that still convey a brand even on fast forward.

And Pay TV?

While this dispute concerned free-to-air TV rights, Pay TV could be equally affected or exploited depending on your outlook. If Optus can establish that the mobile customer subscribes to a Pay TV channel (Fox Sports has most of the AFL and NRL game rights as it happens), then there may be no reason it could not provide the content that the user would have access to from their home TV.

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