Hutchison 3G has reportedly bought the mobile rights to UK Premiership football.
The FT has reported that new entrant UK mobile operator Hutchison 3G has bought mobile phone rights to football’s Premier League. The deal will run from August 2001 to July 2004, with the operator sending subscribers clips of goals as little as 30 seconds after they happen. The newspaper says the deal will be worth around $70 million.
Hutchison will have its work cut out in attracting 3G customers. The UK is one of the most developed mobile markets, with a penetration rate of around 70%, and the four incumbent operators are stepping up their efforts at customer retention. Getting people to switch operators when they upgrade will be difficult.
Certainly, compelling content will be a major driver behind the uptake of 3G – Datamonitor expects the UK entertainment mContent market alone to be worth $692 million by 2004. The majority of these revenues will come from operator-run mPortals, since these will be significantly easier for consumers to access than external sites.
And Premiership football could be a masterstroke. It has already made one UK new entrant fighting against strong incumbents – News International’s satellite TV company BSkyB – into a major player. Football fans are prepared to pay heavily, with Sky Sports charging around $20 per month (on top of the satellite subscription fee) for full coverage. Indeed, one of the major reasons why BSkyB’s rival ONdigital has failed to make such an impact is because it has not secured content with football’s attractiveness.
The service is unlikely to bring in enough revenue to cover the price Hutchison is paying – the mEntertainment market isn’t going to be big enough. But this isn’t the major aim of the deal. If the service is priced cheaply, it will encourage many football supporters to switch to Hutchison. Datamonitor expects the total cost of 3G rollout in the UK to be $50.8 billion, split between five firms. Compared to that, $70 million to build a customer base is very little. Just ask Rupert Murdoch.
