beIN: piracy set to burst media rights bubble | Major Businesses | Business
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Having endured a protracted period of almost state-sponsored piracy of the material it has rights to show, beIN Media Group has warned sports rights-holders, broadcasters and sponsors that such activities threaten to re-write the economic model of the TV industry.
beIN Sport 24 Sugust 2018
Delivering a keynote speech at the Sport Business Summit in London, Yousef Al-Obaidly, CEO and head of what is claimed to be the largest investor in managed rights in the world with a portfolio valued at $15 billion, bleakly suggested that the endless growth of sports rights was over and moreover in certain cases, rights values were going drop off a cliff, and the fundamental economic model of the industry was going to be transformed. The reason was clear: piracy.

He said: “the glorious media rights bubble is about to burst...piracy has spread to every corner of the globe and every part of society. And while most people here think they’ve got their house in order, the truth is that our industry is completely unprepared. Our industry and rights-holders in particular are still sleep-walking towards a financial cliff. We now live in a world where exclusive broadcast rights are, effectively, wholly non-exclusive. And I can tell you that as the largest buyer of sports rights in the world, because of beoutQ in MENA and piracy generally, we now regard all sports rights as non-exclusive and our commercial offers will reflect that.”

It was no surprise that beoutQ was called out. In June 2017, beIN lost access to its largest market Saudi Arabia due to a diplomatic and trade blockade between the two countries. Shortly afterwards, beoutQ began pirating beIN content on an industrial scale. The media rights to hot sporting properties such as FIFA World Cup, UEFA Champions League, the Premier League are exclusively held by beIN across the Middle East and North Africa (MENA); unauthorised broadcasts of these have regularly appeared on beoutQ and have taken a direct toll on beIN Media.

In July 2019, world, European and Asian football bodies joined forces to condemn “the ongoing theft” of their intellectual property by beoutQ, and ask for “decisive action” by Saudi Arabia to end it.In September 2019, An investigative report into the operations of beoutQ by world football governing bodies has stated bluntly that the illegal broadcasts have been transmitted using satellite infrastructure owned and operated by Saudi-based Arabsat.

In his speech, Al-Obaidly added that beoutQ flourished because the industry took too long to take piracy seriously, shown, he said by the fact that beoutQ was fully operational for two years and is still partially operational today. And because at the end of these two years, the industry has not learned any lessons.

“The idea that rights valuations may stall is not new, but individual dips are explained by exceptional circumstances in particular markets or sports. There is also optimism about how West Coast technology companies and the rise of OTT will open up brand new commercial opportunities. And there’s always DAZN, of course...I simply don’t know where this money is going to come from. This is because every deal needs (1) a combination of at least two bidders in a market, and (2) a level of exclusivity in line with the investment made. And while sometimes there are headwinds outside our control, these two factors do not exist. Seemingly, everyone in this industry is asleep at the wheel and refuses to confront the piracy elephant that’s been in the room for years.”

In a call to arms, Al-Obaidly said that the industry needed to realise that piracy was a collective problem and needed an industry-wide response. He implored broadcasters in the audience to realise that anti-piracy staffing levels, capabilities and budgets should be their biggest priority. He proposed that there should be cross-party collaboration on major legal reforms, including the establishment of full copyright in broadcast signal and that CEOs of federations, leagues, clubs and broadcasters should all be shouting about piracy from the roof-tops, and engaging their sports ministers and senior politicians on the same.

Consumers, he said, had a part to play and should be educated through bold public awareness campaigns. They should know the direct implications of choosing a pirate service. But most importantly the pirates themselves should be shown that piracy cannot pay and they should be publicly prosecuted. Cooperation with any governments aiding the pirates must end.

“This is my direct message to the industry and to rights-holders in particular. Take ownership – stop hiding behind your broadcasters. This is not a remote problem, these are YOUR rights that are being stolen as we sit here today,” Al-Obaidly concluded.