The extraordinary growth in Australia of online streaming service Netflix, who have emerged as a key player in negotiations for the digital rights of rugby league, is a sure indication the NRL can double $925 million they have already banked under their new broadcast deal.
That is the opinion of a leading digital media expert, who predicts NRL boss Dave Smith will silence his critics and deliver the game a $1.85 million bounty to the game’s coffers.
Damian Damjanovski, lead strategist at strategic agency Common Ventures said sport is the “next huge step” for streaming services aiming to monetise the Australian market.
Smith signed off the free-to-air TV rights for 2018-2022 to Channel Nine two years ahead of time earlier this month in a deal that guarantees four games a week to viewers.
That money might not have been available in future years given the continued slide in viewers the commercial networks can command.
But former banker Smith has held off on signing away the digital rights in the belief they will only increase in value over the next two seasons, as the likes of Netflix, Google, who own YouTube, and even Apple look to cash in on the advertising opportunities available.
Former NRL CEO David Gallop was heavily criticised by some who felt the current digital rights deal was undervalued when signed over to Telstra. Smith stands to do far better.
“Music is crowded, they can’t make money out of news, so sport is the next big revenue stream for the megaplayers such as Amazon, Google and Apple,” Damjanovski told AAP.
“The value of the digital rights will only continue to increase over the next two years. And as they do I see the NRL matching the deal they already have signed with free-to-air TV.”
Damjanovski points to the growth of Netflix, who have amassed one million subscribers since launching in Australia 12 months ago, as a guide to where viewer habits and advertising money are heading.
That growth coupled with Fox Sports’ monopoly on Pay TV coverage perhaps being challenged by the likes of ESPN and the emerging beIN Sports, a subsidiary of Al Jazeera Media Network, is set to boost the total broadcast revenue.
However this is likely to be the last time such broadcast negotiations are held, trumpeted and scrutinised so publicly.
“From 2023 onwards there won’t be any more negotiations, the NRL will deliver its product, directly to the patron,” Damjanovski said.
That means footy fans will buy games direct from the NRL.
But that remains years away. In the meantime, Smith has two years to impress disgruntled clubs with the figure he can negotiate.
“Negotiations are continuing,” an NRL spokesman told AAP.
“The focus on those negotiations will be to deliver the best deal for the fans and the game.”