Football Mobile Rights - Part 2

Thomas Husson | January 30, 2006, 03:16 AM

The LFP (French Professional Football League) announced the results of the RFP for the French mobile rights (see my previous post here for part 1)...and the winner is...Orange.

Orange previously owned the "Ligue 1" rights but only paid 8M euros. They are now ready to pay 29M euros for 2 seasons (until 2008) ! When I said, there would be a strong increase, I did not expect it to reach this amount. Competitors were SFR (the second French mobile operator) and media companies (eTF1, Canal Plus, Eurosport, TPS,...) but none of them offered such an amount.

Looking at the number of mobile video phone owners, the return on investment is not obvious. According to Orange itself, the number may well reach 5M during 2006-2007 and 10M during 2007-2008. It simply means the objective is wider : enhancing the brand and gaining incremental market share. According to Emmanuel Vacher, Marketing Multimedia Director at Orange France, it will help to gain 3 to 5% in mobile broadband market share. The amount paid is less expensive than in the UK (47,6M euros for one season and not on an exclusive basis) or than in Italy (52 M euros) and not really significant for the France Telecom Group. However, it has a couple of implications for the market:

- Content is increasingly seen as a source of differentiation
- Large operators are ready to reduce margins to acquire new customers using this content differentiation
- Telcos are increasingly competing with broadcasters and producers in this field
- The difference will not only come from the platform (TV, Internet, Mobile) but increasingly from the notion of live versus pre-recorded broadcast. Indeed, Orange paid 24M euros for almost live content vs 5M euros for the wrap-up of matches.