There's another nail in coffin of free-to-air broadcasters, after Telstra Corporation (ASX: TLS) sealed a mobile broadcasting rights and sponsorship deal with the National Rugby League (NRL), worth around $100 million.
The five-year deal gives Telstra the right to stream eight games a week, plus special events such as state of origin and test matches, over the internet and to mobiles and tablets. Fox Sports – owned by News Corporation (ASX: NWS) still has the right to broadcast five games a week to mobile devices and internet enabled televisions. The Nine Network and Fox Sports signed a $1 billion deal back in August, with Channel Nine broadcasting at least three matches a week, plus special events.
This deal follows on the back of Telstra's deal with the Australian Football League (AFL) to stream matches live over the internet from 2012 to 2016.
Sport has been one of the main draw cards for free-to-air networks, because of its consistently high numbers of viewers and hence command of premium advertising dollars. The ability for users to now watch NRL and AFL matches via mobile devices, suggests that the days of sitting down in front of the TV to watch a match are numbered.
Customers of rival carriers, Optus – owned by Singapore Telecommunications (ASX: SGT) and Vodafone – part owned by Hutchison Telecommunications (ASX: HTA), can also watch the rugby league matches on mobile devices, but will have to pay a fee that will be split between Telstra and the NRL.
Foxtel subscribers will also be able to get access to matches on tablets through the Foxtel Go app.
For Telstra, this is just another move to providing content for subscribers and its mobile users, and towards a media-centric platform. Its competitors have warned that Telstra's rights to exclusive sports content could take over from its monopoly copper network as the new competition bottleneck. We're likely to see more deals like this as Telstra moves away from its old role as telecommunications supplier.
The Foolish bottom line
Telstra shareholders will likely applaud the new deal, which could see a whole swag of new subscribers jump ship at its competitors to board the Telstra sports bus.
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Motley Fool writer/analyst Mike King doesn't own shares in any companies mentioned. The Motley Fool's purpose is to help the world invest, better. Take Stock is The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Click here now to request your free subscription, whilst it's still available. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
