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Why the big media companies have Periscope on their radar

At a dinner in New York last week, two of the four diners — all of whom work in sports — said that they watched the May 2 Floyd Mayweather-Manny Pacquiao fight via Periscope.

Both men said that Periscope’s feeds consisted of people filming their TV sets. Quality was not great, but it was good enough and certainly beat shelling out $100 for the pay-per-view. One 40-something man watched the same stream for the entire fight; the 20-something was knocked off his stream a couple of times and quickly found other ones.

Their stories are not unique. In the days after the fight, news reports were filled with reports of illegal streams via Periscope and Meerkat.

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This is a potential problem that TV networks should address immediately. Nobody knows how these services are going to develop. But if I were a content owner, I would put a stake in the ground to say, “We’re watching you guys.”

I would sound much like ESPN President John Skipper did last week when he called on companies like Twitter to do more to protect TV networks’ copyrights.

“It would be really nice if our friends in the Valley would quit hiding behind the idea that they don’t have to be engaged in the protection of intellectual property,” he said. “Intellectual property is important to our economy and to our culture and should be protected.”

Skipper is right. This is not about being a Luddite, putting your head in the sand and hoping that new, disruptive technologies don’t develop.

The Mayweather-Pacquiao fight drew viewers to Periscope, whose users live-streamed video of the event from their televisions.
Photo by: GETTY IMAGES
Rather, this is about media companies protecting their main revenue streams: cable affiliate fees and ad revenue. As more consumers dump cable or downgrade to lower-cost tiers, more services like Periscope and Meerkat could one day make it easier for consumers to cut the cord.

TV network executives don’t view Periscope as a real threat right now. Despite the huge amount of Periscope streams available for the fight, Twitter executives say they received just 66 reports from HBO and Showtime about Periscope feeds illegally streaming the fight.

“We took action against all of them,” said Danny Keens, Twitter’s North American head of sports partnerships. “Everybody is happy with how the fight unfolded. They were emailing the tech team to pull down streams.”
There’s no evidence to suggest that the availability of illegal streams hurt the fight’s pay-per-view numbers, which set records for number of buys (4.4 million) and revenue ($410 million).

CBS Sports Chairman Sean McManus said the number of illegal streams did not affect the pay-per-view business around the fight. Plus, he said the poor quality of the Periscope feeds — mostly consisting of people filming their TV sets — makes the service little more than a nuisance right now.

“That’s a terrible experience,” McManus said during a panel session at the Paley Center last week. “I don’t think it cut into — dramatically at all — the pay-per-view revenue that we generated for that fight.”

It’s not about where Periscope and Meerkat are right now. It’s about where these services are going. Video quality is going to get better — if not with Periscope and Meerkat, then with some other streaming service that hasn’t been developed yet. This has all the look and feel of Napster at the turn of the century.

Twitter’s Keens said the Mayweather-Pacquiao fight generated more publicity around Periscope because the fight was on pay-per-view. He said networks have less to worry about with events that are available on television. “If it’s an NBA playoff game, you’re not paying to view it,” he said. “The distribution of that content is readily available. It’s the same stuff that we see occasionally with Vine clips published on the platform.”

But ESPN and Turner Sports pay handsomely for those NBA rights. So do Fox and NBC locally. Most games are on cable networks, which, of course, aren’t free. Networks should plant their flag on this issue now and not risk these streaming services getting bigger and becoming more of a threat.

Or, as Fox Sports President Eric Shanks said, “None of us are ever going to give up any rights that we have. We paid a lot for these rights. At the time when you figure out what it means, we’ll exert the rights that we have.”

Twitter’s Keens told SportsBusiness Journal that his company takes copyrights seriously. He referred to the Mayweather-Pacquiao fight and said Twitter worked closely with HBO and Showtime before, during and after the fight to combat piracy.

“We can’t be moving into a space where we’re cannibalizing live broadcast or pay-per-view subscriptions,” he said. “We have been working overtime with our partners to make sure that they feel comfortable around what we’re doing with Periscope and how we’re continuing to explore the possibilities.”

He pointed to leagues like the NBA, NHL and PGA Tour, which are using Periscope for non-game action like streaming press conferences. Of course, the PGA Tour banned journalist Stephanie Wei for using Periscope to stream part of a practice round, showing that the organization still is unsure how to deal with these streaming services.

Keens also referred to ESPN and Fox Sports, which he said were using Periscope to provide content during commercial breaks.

“We want to encourage everyone to use the platform to share original, creative broadcast,” he said. “Anybody who is sharing content which is disrespecting intellectual property rights, we will take that content down.”
Of course, when Twitter’s CEO, Dick Costolo, tweets during the Mayweather-Pacquiao fight, “And the winner is … @periscopeco,” it should send a message to content owners that they need to pay close attention.

John Ourand can be reached at jourand@sportsbusinessjournal.com. Follow him on Twitter @Ourand_SBJ.

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