Executive Trends: The Mother of all Battles

The announcement in Mexico of the launching of a new SVOD service branded Sportflix, that presumably would apply the Netflix concept to sports through Latin America, sent shock waves through the Latin American pay television industry and particularly the two pan-regional networks (Fox and Turner) that have been working for many months to migrate the Argentine soccer transmission system from broadcast to Pay TV, with a substantial investment (estimated by some to exceed $200 million) and the daunting task of getting the cable & satellite subscribers to pay again for watching games that have been available for free during several years, courtesy of the Argentine fiscal coffers during the Cristina Fernandez de Kirchner presidential term.

The so-called "Netflix of Sports" (a nickname applied by sources such as the BBC and Argentine website Infobae) did not stop there, claiming it will start by the end of this month to make available major Latin American sports, US sports and other similar activities from around the world, for fees between roughly $20 and $30 per month, aiming at reaching some some 400,000 subscribers by the end of the year and 1.5 million by the Russia 2018 tournament.

This provoked an immediate rebuff by several rights holders, among them ESPN and Brazilian Globo, while Matías Said, visible head as VP at the newcomer, alleged at a Skype interview with Buenos Aires-based newspaper La Nación that 'the platform will hold retransmission rights, which are less expensive than transmission', and in other cases 'apply Internet streaming'.
 
Antipiracy groups reacted against Sportflix, claiming that what Mr. Said is proposing is blatant piracy, maybe in the way of user-to-user Internet retransmission but still a flagrant violation of the copyright laws if there is a profit-minded intention.

Yet, aside from curbing delinquency acts, a distinct idea emerges: the pay television industry has currently an image problem, and turning it into a positive look is the Mother of all Battles when Netflix and other alternatives for watching content (in many cases for free or small amounts of money) are proliferating and snatching audiences from the linear business.

In early September, maybe later if a delay is announced by some reason, it will be possible to find out if Mr. Said's announcement is just a hoax or if he and other people --after all, he defines himself as the VP of this company, therefore there should be a President and other staff-- are up to something that will be a real headache for the established pay television industry. So far, no improper actual move has been denounced.

But, it would be a mistake to just dismiss this case as a prank: chances are that this case is being studied not only by the lawyers of the directly affected companies, but also by disrupters who, aware that sports are currently the major attraction for male television viewers and grow in importance to female audiences, could take an advantage over the so-called "programmatic" advertising and feed the algorithms with visitor data regardless of the fact that they lack the intellectual rights to feature the content that attracts these eyeballs. So far, advertisers have not dealt properly with this problem; and, it's not just tiny bad behavior by black-hat hackers: recent press reports show that delinquents have infiltrated some of the major social international networks to which confident advertisers trust their messages and branding.

The recent conferences on audiovisual piracy held in various capital cities within the Latin American region have shown two aspects of this disturbing trend: on the one hand, as HBO LAG executive Javier Figueras remarked at a recent gathering, there is an urgent need to have and put to work a single task force instead of the various groups that are reporting on this problem; on the other hand, there is a need for effective action to effectively prevent the offenders from later becoming the victims to the eyes of public opinion, an unwanted result of some of the earlier antipiracy actions.