Sky TV's worst fears are confirmed: Spark Sport boss Jeff Latch says the streaming service's profitability will depend on people staying on after the 2019 Rugby World Cup - and to keep them in the fold his company won't be going after one-off events but season-long competitions involving top tier codes including rugby.
Asked this morning if Spark Sport would be interested in securing rights to the Australia-NZ Boxing Day cricket test or Big Bash T20 cricket, Latch said, "No, there are bigger rights we're interested in"
Spark Sport "acquired rights to the Rugby World Cup because we were looking for a catalyst for change and bring large numbers of people in to experience our platform with the belief that we'd actually be able to get a decent number of those people to stay with us," he said.
"When you look at other big, one-off events, there's not much coming up that's available that would actually do the same sort of job.
"What we're far more interested in is acquiring competitions that will run for a long period of time and therefore be useful for us to build subscriptions over time.
"We're interested, obviously, in securing tier-one content, and some of the other major sporting codes rights are coming on to the market this year," Latch said.
"All local sports are interested and engaging with us."
Just as Spark eyes Super Rugby, All Blacks, Black Caps and other rights, incoming Sky TV boss Martin Stewart is saying his company has to regain its position as "the home of sport" and fight harder for rights.
Stewart told the Herald his company will unveil new-look sports channels, and an upgraded version of its Fanpass app, in August - which will be nicely timed to impress NZ Rugby and Sanzaar and other sporting bodies as a key round of rights talks kicks off.
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Are we looking at a full on war between Spark and Sky over sports rights?
"I think there's no doubt it's leading to an escalation in rights costs," Latch replied.
But the battle won't just be over whose got the deepest pockets or the shareholders with the most mettle, as Latch paints it.
"There's a difference between what international sporting codes are looking for and New Zealand's major sporting codes are looking for when it comes to a content partner," he said.
"Often with international, it's just all about the money."
But with local codes, he says there's a growing realisation that throwing in their lot with a pay TV broadcaster can cost in terms of audience.
"They've taken the big cheques - pretty much all of them now," he said. "And they're sitting behind a pay window with Sky but they've seen some pretty distressing things happen to their sport over the past 15 years as a consequence of that."
He says only around 22 per cent of households have Sky Sport, and that making major sports less accessible has hit TV viewership, match attendances and participation rates.
Spark Sport, by contrast, could offer sporting bodies a "freemium" model with a mix of free content to reach a mass audience and paid premium content to generate subscription revenue he said.
Latch acknowledged that Sky had its free-to-air Prime channel as a vehicle for reaching a mass audience, but he said it was being little used (though he acknowledged it be utilised more with the Sky Sport threat). He pointed out that Spark Sport partner TVNZ show Rugby World Cup pool games on a one-hour delay v the traditional two-hour delay.
For its part, Sky has pushed that its satellite-based service gives it deeper reach, especially in rural areas where Latch has acknowledged that Spark Sport will struggle.
Move into live sports broadcasting, studio shows
Sky TV has previously used its near-monopoly on outside broadcasting services as a moat to protect its sports rights. That situation changed however, when global OB player NEP set up shop in NZ recently - and NEP was used by Spark Sport and partner TVNZ to broadcast a key schoolboy rugby fixture - Auckland Grammar v Kings College - on May 18.
Latch says Spark Sport has devoted the rest of this year to "hardening its systems" and preparing for the Rugby World Cup, expanding its software partnerships.
"In 2020, that changes," Latch said.
On the back of hoped-for rights deals, there will be a push into live product - both for live games and in-studio shows. He saw an expanded partnership with NEP, but also other players.
All that lies ahead, of course. First there's the small matter of successfully streaming the Rugby World Cup during September and October.
Here, Latch presented a triangular graph showing how RWC content would be beamed by satellite from Japan then processed by TVNZ before being forwarded to Spark Sport's streaming partner in the US, the experienced sports specialist iPlanet, which will in turn deliver content via a network run by the multinational Akamai, which has beefed up its NZ network in preparation for the World Cup.
The whole process means that Spark Sport viewers will see World Cup action around 30 seconds after it happens in Japan.
The delay is big enough that people risk seeing spoilers if they, say, are keeping an eye on live tweets from spectators. Latch said it isn't ideal and that Spark Sport will work with Akamai to shorten the delay. But he added that it's only six to eight seconds longer than with traditional live sports broadcasts.
Spark has not given out any subscriber numbers for Spark Sport since it debuted with its first Formula One race in March (when it had 9000 sign-ups), and it won't divulge any costs until its first financial update of 2020 - and one of the company's investor relations reps was on hand at a media briefing this morning as a physical reminder to keep things tight.
But Latch did say that Spark Sport is being designed to cope with up to 500,000 simultaneous streams on what he anticipated will be the peak day for the app - the All Blacks' pool game against South Africa on September 21 (his logic is that the other pool competition is not as much of a draw, and the semis and the final will be live and free on TVNZ).
Latch said Rugby World Cup games will carry advertising, but none during game time, and with no annoying spot after the haka. In something of a boon for TVNZ viewers, the one-hour delayed coverage of the pool games - plus the AB's presumed semifinal - will screen "as live" on Spark Sport. That is, with no ads inserted into game-time a la delayed Sky Sport coverage on Prime.
What keeps Latch up at night?
The Spark Sport boss maintains everything is going well on a technical level. There have been only five problems across more than 300 streamed events, he said, and none of them have repeated.
The most recent blue was on June 9, when Spark Sport went offline for almost the entire first half of the U20 New Zealand-Scotland rugby match due to an issue with a satellite feed.
Latch said Spark Sport was on track to be out of its beta or test phase by the end of July.
An Apple TV app is due this week. Smart TV apps for Panasonic, LG and Sony TVs are in the works to follow Samsung, which is already offering Spark Sport on all of its Smart TV models released since 2017.
He cited an NZ on Air survey that said 62 per cent of NZ households are now streaming video.
But he also conceded that many rugby fans would be in the remaining 38 per cent. What keeps him awake at 1am is the fear that many will leave it until the last minute to sign up to Spark Sport.
Latch's message, as ever, is that if you're interested in viewing all 48 Rugby World Cup games via Spark Sport, sign up as soon as possible to check if your broadband connection is good enough, and that your home's Wi-Fi is up to snuff and it can Chromecast the signal to your regular TV or get a trained teen to do it for you.
Spark Sport's Tournament Pass includes footage from past World Cups that you can use to test your internet connection. If it doesn't prove good enough, you can get your $80 refunded.
Just don't wait, the Spark Sport boss pleads.