The digital arm

Discussion in 'NRL Media Watch' started by LeagueXIII, Apr 4, 2020.

  1. LeagueXIII

    LeagueXIII First Grade

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    John Grant's baby seems to be doing well. Potential for massive growth.

    https://www.afr.com/companies/sport...ory-for-100m-digital-business-20180531-h10s7o

    Here is a more recent article from March this year regarding the digital arm, what News and Nine are after.

    https://www.smh.com.au/business/com...ys-backs-nrl-digital-arm-20200221-p5436u.html

    We shouldn't underestimate the value of this as it is the future of the game.



    ARLC chairman Peter V'landys backs NRL digital arm


    Zoe Samios
    March 2, 2020 — 12.00am


    The head of the National Rugby League's governing body says the sport will continue to grow its digital arm, cooling speculation the organisation may roll back the department or sell it to commercial partners.

    Peter V'landys, ARL Commission chairman, told The Sydney Morning Herald and The Age the NRL remains committed to its digital division and is focused on improving its offerings to promote the game and grow its fan base.

    [​IMG]
    The NRL has benefited from the investment in its own digital division, attracting younger audiences and helping build game awareness overseas.CREDIT:GETTY

    "We are focused on improving and expanding the digital services that we provide – enabling and supporting the game and the businesses of the game’s partners," Mr V'landys said. "Our digital network can help us grow our fan base, improve our engagement with fans and ensure our game is sustainable and growing."

    NRL Digital Network officially launched in 2018 after the organisation took control of its digital assets from Telstra, an arrangement formed under the terms of its $1 billion broadcasting rights deal with Nine Entertainment Co and Foxtel.

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    The deal was a significant change in strategy for the sport, and involved the NRL and its clubs investing money in digital rather than outsourcing it to media partners. The AFL has a similar arrangement in place through its division, AFL Media.

    Sources close to the NRL who spoke on the condition of anonymity say the NRL has been facing pressure from Foxtel, which is controlled by News Corp, and Nine, which is the owner of this masthead, over its digital operations. The media companies paid significant amounts for the broadcast rights and argue the NRL's digital network is in direct competition with their own digital offerings.

    The two broadcasters are in the third year of a five-year $1.8 billion deal, but chairman V'landys has promised a "better result" for the sport in the next negotiations.

    Last week Mr V'landys dined with Fox Corp executive chairman Lachlan Murdoch in the US, and met with Google, Facebook and Amazon, fanning speculation that talks over the next broadcast rights deal have informally begun.

    Nine has publicly spoken about its preference to have all broadcasting rights to a sport, including digital rights, as is the case in its deal with Tennis Australia for the Australian Open tournament. The NRL has previously had a fractious relationship with News Corp, with its papers at times critical of boss Todd Greenberg.


    At face value the NRL Digital Network looks like a website, NRL.com. However, the division is far more complex, made up of five parts including NRL.com, and sites and apps for the competition's 16 teams.

    It employs 80 staff, including a product and technology arm with designers, developers and engineers who ensure the digital products work for fans. It has a media services division which handles game archives and images taken at matches, digital marketing and social media, and a data and insights team.

    It also controversially employs journalists who cover matches and interview players and coaches.

    National Rugby League's chief digital officer Alex Alderson, who runs the division, said it is the "cheerleader for the live game".

    "It is a significant investment that the game has made but we are seeing the benefits of that," Mr Alderson said of the project, which is currently being injected with $150 million over seven years.


    The NRL.com editorial team is small but Mr Alderson said it is one of the more important parts of the operation.

    “NRL.com is a critical part of what digital does ... it’s a critical part of the overall business," Mr Alderson said. "The journalists who work for us have all signed up to an editorial framework. We really emphasise fairness, accuracy, balance. What’s imperative for us is that fans trust us so that guide is what we do.”

    As of the end of 2019, NRL Digital Network has 1.4 million registered user accounts, well ahead of the 2022 target of 800,000. It has more than 2.8 million weekly average users a week and its biggest audience are under-18s. Club and state websites and applications also grew 30 per cent last year.

    An audit from November last year shows the digital business is quite the success story. It could double in value in the next two years to just under $1 billion, based on revenue from direct advertising, sponsorship, sales and broadcast.

    Mr Alderson said the network remains focused on working with Foxtel and Nine to strike the right balance.


    "The largest opportunity among many that presents is to talk to them about tuning into the live game," he said. "That’s the lifeblood of the sport and the economics of the sport. Helping the audience engage with the live matches quickly and as easily as they can when it's on is a big part of why we exist. That involves a range of work and collaboration with both Nine and Foxtel to get that right.”


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    Zoe Samios
    Zoe Samios is a media and telecommunications reporter at The Sydney Morning Herald and The Age.
     
    Last edited: Apr 18, 2020
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  2. Heisenberg

    Heisenberg Juniors

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    This article is 2 years old
     
  3. Perth Red

    Perth Red Immortal

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    Lol bit out of date there mate! The investment in digital has potential. It’s hard to say what the margins on returns are so far as nrl are talk about revenue increase in the annual report from digital but make no mention of what expenditure is. There’s been a lot of money go i to it it but it is making money it seems and long term could be an essential arm for more self control of the game.

    last year digital brought in $24mill but we don’t know what has been spent in generating that revenue.
     
  4. TheRam

    TheRam First Grade

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    I think they said on tele(FOX) the other day around $75-100m, but all the news corp jurnos are saying it is worth nothing. No one wants to have a bar of it. They value it by saying no one wants to bid for it(buy it) therefore it is worthless.

    They are pissed off because essentially Fox Tel and Nine have been paying to fund something that the NRL can supplant them with. Seeding their own destruction so to speak. So we will never really know how good, great or dad an idea it would have been, because you can bet your last dollar V'Landys will put the big red felt pen through it when all is said and done in the new reorganisation of the ARLC.

    This is one reason as to why I would say they love him so much.
     
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  5. gUt

    gUt Coach

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    https://www.smh.com.au/sport/two-bi...ital-arm-grant-warns-nrl-20200503-p54pcb.html

    'Two-billion-dollar asset': Don't sell digital arm, Grant warns NRL

    Should ARLC chair Peter V’landys agree to the acquisition, it would represent a short-term gain for the NRL and its greedy clubs but long-term pain for the code.

    Nine’s strategy would be to relieve V’landys of the costs of the NRL’s digital arm, probably for a zero acquisition fee, while raking in its future revenue.

    Yet one of the key reasons former ARLC chair John Grant and his board invested $150m over six years in the NRL’s digital arm was to create an asset that could potentially stream games direct to subscribers and create competitive tension over broadcast fees with its traditional media partners, Foxtel and Nine.

    The COVID-19 pandemic has weakened all the broadcasters and sporting codes but content is still king. No free-to-air network in Australia can be No.1 without NRL or AFL.

    Despite the NRL exhausting all its reserves and discounting player salaries for 2020 as a result of COVID-19, it is probably in a stronger position with the networks than at any previous time.

    In fact, it’s possibly in a more powerful bargaining position than the AFL, whose free-to-air broadcaster, Channel Seven, needs the support of owner Kerry Stokes, just as its pay TV partner, Foxtel, requires the financial backing of News Corporation.

    Foxtel is also the NRL’s pay TV partner but Nine, owner of this masthead, has a stronger balance sheet.

    The challenge for the networks is that advertising is way down as a result of the pandemic and, with no major sport, subscribers are cancelling Foxtel and Kayo.

    In New Zealand, the NRL broadcaster is the listed SKY NZ. It was once the most profitable broadcaster by margin in the world. Today, it has a market cap of $61m, signed a dud deal with NZ rugby and is leaking subscribers.

    But NRL is not a dud sport in Australia. Nine can boast that four of the top five programs nationally and annually are rugby league, yet now complains it costs too much to buy the rights and produce the games. It anticipates empty stadia will cause a fall in TV audiences.


    Nine’s attack last month on the NRL’s “bloated” administration cost structure may well have been a ploy to relieve V’landys of the expense of employing 70 staff in the NRL’s digital arm in exchange for acquiring a potentially valuable property.

    Grant was always confident NRL.com could be worth $1 billion and hasn’t changed his position. In fact, it’s the only issue that will draw him into making a comment.

    He argues that NRL.com is an extension of the strategy that started in 2012 with the removal of Fox Sports and Nine’s first and last rights over broadcast through until 2027. This, he says, returned sovereignty to future rights negotiations and, as the Australian viewing audience becomes more wedded to streaming, a global provider may offer the seed capital to fund NRL.com to a point where it streams games, such as the Junior Kangaroos versus France match on its website last year.

    Grant calculates that if the NRL converted half its existing 1.6 million digital customers into $25-per-month subscribers, and had a free-to-air broadcaster pay a fair but lesser price than Nine pays now - plus monetises other available revenue streams - it could produce annual revenue of over $360m with advertising offsetting production costs.

    “That’s almost $2b over five years, and any asset capable of generating this sort of cashflow is a very valuable asset,” Grant said.

    “Also, the NRL is in a good position to start with a restructure of the costs in the game. Right now, the ARL Commission has a very big decision to make. To sell or not to sell NRL.com! I just hope that before the die is cast, the good people on the commission, led by what has, to date, been a very capable and strong Peter V'landys, do the numbers and make the right decision for the game’s future. The opportunity to retain sovereignty over this future and to redefine the game’s cost structure and its relationship with the media is very enticing.”

    But Nine clearly want exclusivity of product and acquiring Nrl.com is the cheapest first step. Nine will also want to release the network from its simulcast arrangement with Foxtel, where Nine’s 7.30pm Friday viewership is undermined by Foxtel subscribers staying with the network at the conclusion of the 6pm game.

    Advertising revenue is split among the multiple platforms on which NRL viewers can watch games: Nine’s two channels, Foxtel’s three and NRL.com in partnership with Telstra.


    The NRL’s Annual Report points out that its digital arm has been developed and run in partnership with Telstra, the NRL’s sponsor.

    Telstra own 35 per cent of Foxtel who would also be interested in acquiring NRL.com. The Australian-owned telco, which has been ignored in the media coverage of V’landys' battles with broadcasters, would have something to say on Nine owning NRL.com.
     
  6. Starkers

    Starkers Juniors

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  7. Bring back John Fifita

    Bring back John Fifita First Grade

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    Absolutely agree 100% with this and entrust that under the astute leadership of the NRL chairman this won’t be handed over.

    Channel 9 has been shown up as a broadcaster by this initiative of the NRL. It used to be “the home of sport” but has been absolutely dormant in capitalising on its previous success and has lacked all imagination and innovation, and has been left behind in the digital age..

    Channel 9 has pointed fingers at the NRL, and has deservedly copped criticism of itself for doing so. But it would need another network to invest heavily if league was to remain on FTA. Don’t think 7 and 10 can afford it given AFL and 9 has that up their sleeve.

    Like a bad marriage, 9 has gotten complacent and is an overweight, unfit, shadow of itself in the honeymoon, and rather than take care of itself it’s blaming others and fighting with its spouse. But a divorce could be disastrous for both so they’ll end up staying together for the kids.

    If I was the chairman of the NRL I’d be asking what Channel 9’s future strategies are to enhance its coverage of Rugby League.. what ideas and innovations does it have... to promote not regress...?

    It would appear all they have is an idea to take half the NRL’s house, and stay as lazy and complacent as it has for the last decade. And keep sitting on the lounge..

    Don’t sell the house Peter!
     
  8. LeagueXIII

    LeagueXIII First Grade

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    He may not sell it to Nine. However News have been very cosy with him even comparing him to Michael Jordan yesterday, will he sell it to them? We hope not.

    Amazing how the media give no praise to the previous bosses for building this potential massive asset.
     
  9. Perth Red

    Perth Red Immortal

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    but but but it’s not a stadium lol

    on digital return on investment
    2019 expenditure $15mill (according to SMH)
    2019 revenue $27million (annual report)
    Profit 2019 $12million
     
  10. LeagueXIII

    LeagueXIII First Grade

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    What gets me is people still fail to see the media agenda and treat grant, Greenberg etc as duds. They were far from it. They were threats to our "partners" because they couldn't control us anymore.
     
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  11. taipan

    taipan Referee

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    Agree.When News half owned us all those years and their former lawyer and later NRL CEO was in charge, he could do no wrong and there were no real negotiating dramas.

    Both News and Nein did not like the first and last rights deal, nor the digital arm acting as a competition for their own bunch of know all journos.
     
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  12. Bring back John Fifita

    Bring back John Fifita First Grade

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    yep and he had ten years in the job... ten effing years. He was ok enough but was a marionette puppet with those above pulling the strings to make him dance.
     
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  13. Brutus

    Brutus Referee

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    Very true. Gallop was untouchable in the eyes on News.

    This helped him get the soccer gig. Soccer Aus fell in hook line and sinker.

    They soon found out what a stinker they had taken on.
     
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  14. taipan

    taipan Referee

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    Should have called it ,the Um and Aah League when he was running it.
     
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  15. nrlnrl

    nrlnrl First Grade

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    I believe it must stay with the NRL.
     
  16. Perth Red

    Perth Red Immortal

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    there is no justification for letting them have it. If nrl does then Vlandys and the commission need investigating.
     
  17. taipan

    taipan Referee

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    Wasn't a great fan of Grants' when he was involved on the Commission.But I will say this, he has a decent idea about technology having his own tech company .When he says don't sell the Digital arm, because of not only its current worth but future opportunities and the growing worth,I take notice of him rather than a desperado of a TV station head (ch9).

    The NRL has as its backstop, a pending loan agreement for $250m if needed.With that as some sort of extra negotiating security, Vlad the Impaler should tell Marks ,the digital arm is a no go zone, period.

    Marks is trying to run roughshod over the NRL ,because he thinks he has the sole upper hand.
    Tell him"he's dreaming."
     
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