On TV, Mobile App, or Roku? In the United States or the United Kingdom?
103.4 million Americans watched the Philadelphia Eagles capture their first-ever Super Bowl title against the New England Patriots last year. According to Nielsen ratings, the Super Bowl is the most-watched television event of the year.
The majority of Americans watch the game live on whatever TV channel wins the broadcasting rights – this year it’s CBS. Some fans will watch through apps on their mobile phones or tablets, others will stream it through CBSSports.com, and a growing number of viewers will connect through devices such as AppleTV, Amazon Fire, Roku, or Xbox.
Whichever U.S. network has the broadcast rights in a given year will offer the rights to telecasters such as the BBC in the United Kingdom, CTV in Canada, Televisa in Mexico, or Sky TV in New Zealand to show it in their local markets. In 2017, 50 million people watched the Super Bowl through outlets outside of the United States.
Trade in Broadcasting Rights
Sports fans around the world have so many new platforms and formats to enjoy premium sporting events, that income from the sale of broadcasting and media rights far surpasses revenue from ticket sales in most sports. Sports broadcasting rights are attracting social media firms like Twitter and Facebook, which dueled for the rights to show NFL games live (Twitter won). It’s a two-way street: the NBA started showing 60-second video recaps of professional basketball games on Instagram for the first time this year to drive viewership.
The opportunity to pull in the biggest global audiences are during playoffs and championships that enjoy a large international following such as soccer’s World Cup or the Olympics. Global viewers of the Super Bowl tune in not only for the game, but for the half-time entertainment and the multi-million dollar 30-second advertising spots.
Where’s the Umpire?
Under the 1961 “Rome Convention,” broadcasters have exclusive rights for 20 years to authorize rebroadcasting, recording, reproduction, and communication to the public of their broadcasts. In the example of the Super Bowl, U.S. broadcasters earn revenue from royalties and the fees they charge broadcasters in other countries for the exclusive right to show the event.
But these rights get murky and hard to enforce in the context of all the ways broadcasts are transmitted digitally these days. For more than a decade now, international discussions have been ongoing in the World Intellectual Property Organization (WIPO) in Geneva, Switzerland, to clarify and expand intellectual property rights to cover all of the newer ways of broadcasting in today’s digital environment.
Paid TV subscriptions are becoming more prevalent globally, growing fastest in the Middle East, Africa, Central and South America, India, and China. Live streaming is also gaining traction with the global expansion of Internet access. Broadcasting rights to popular international sporting events are becoming more lucrative at the same time they are becoming harder to protect against digital piracy through methods such as signal theft and unauthorized transmission over the Internet.
What are the Rules of Play?
Deriving revenues from broadcasting and advertising in international markets depends heavily on the regulatory environment in those markets and the openness to foreign participation. Unfortunately for the producers of popular content in large markets such as the United States, most members of the WTO have not offered access to their markets and have, in many cases, taken exceptions to the basic commitments of most-favored nation treatment and non-discrimination. In most cases, conventional broadcasting is closed to foreign providers or subject to ownership restrictions.
In the parlance of international trade, broadcast transmissions are generally considered “audiovisual services,” but this classification was created a couple of decades ago. It does not explicitly mention newer forms of transmission such as cable, satellite, and Internet, which are the platforms generating and growing global audiences for the kind of content and advertising produced in the United States.
Who Will Win the Game?
As technology advances, global consumers have more ways to gain access and view foreign broadcasts. Governments will have a hard time maintaining traditional trade restrictions on transmissions of foreign content. At the same time, foreign producers and rights holders will have to protect the value of their content from all of the ways viewers can avoid paying for it. Unlike in football, there isn’t a common playbook. The rules of this game are still being written.