On Saturday night, the so-called fight of the century took place in Las Vegas and boxing fans across the world gathered around their screens to watch the fight. For some fans, watching was free but for most, including everyone in the US, the fight was broadcast only on pay-per-view. The cost: an “unprecedented $100 price to watch on TV and strictly enforced fees of over $5,000 to show the match at bars and restaurants.” OK, so HBO and Showtime, the owners of this particular match, did the math and decided on this high price because they knew it would be paid. A textbook example of supply and demand pricing.
I was surprised by the popularity of boxing, seemingly even more popular than the Superbowl here in the US, and the high demand to watch the fight. I was also blown away by the numbers behind it. Mayweather was paid $180 million for his participation, Pacquiao was paid $120 million and the income from ticket sales, broadcasting rights, sponsorships and walking-in-the-entourage rights were more than enough to cover the winning purse and more. Big money indeed.
OK, so far just another example of the wonders of sport marketing, perhaps one of the most extreme examples. The game-changer came after the fight was over with this tweet from Twitter CEO Dick Costolo:
And the winner is… @periscopeco
— dick costolo (@dickc) May 3, 2015
I’m not sure if he meant that video streaming had won vs pay-TV and pay-per-view or that Periscope had won over Meerkat, it’s video-streaming competitor, but he created a lot of controversy with that tweet and, of course, angered the Hollywood elite at HBO and Showtime.
Today Twitter issued a statement that was a bit humbler than Costolo’s tweet and said that Periscope actually blocked “dozens” of live video streams on Saturday and acted on every DCMA take-down notice immediately. That said, I am curious why this was even a big deal because:
- There is a big difference between watching a sporting event on a large 80” screen TV with HD quality video and watching on a 6” mobile screen in streamed-over-the-network quality. These are not the same product.
- It’s debatable whether the people watching a livestream on their phone would have shelled out the $100 in the first place. I doubt that real boxing fans would have been content to view the match on a tiny screen in debatable quality. As Danny Sullivan described his experience: “I had no interest in watching the Pacquiao-Mayweather fight last night. That changed after I browsed Twitter coincidentally during the middle of it. There, I saw a tweet where someone was livestreaming the fight. Curious, I checked it out.”
- Was there an option for cordcutters? This, for me, was the first question when I heard that livestreaming the match was so popular. Did people who don’t have a pay-TV subscription (a typical package is about $90 a month) even have an option to pay for the fight? It seems that the answer for that is no.
Seriously, how is it possible that 3.8 million households, the current estimate of households without pay-tv service in the US, weren’t given a legal option to pay for watching the match? Is it a fear of piracy and illegal re-streaming? Is it another attempt to get such households to subscribe to pay-TV? Is it too small an audience to be worth the effort of providing a solution?
No matter the answer, this is just the beginning. As video technology innovates even more, shutting down these “rogue” broadcasters will become even harder. The solution is simple: let the cordcutters pay $100, too.
Update: During a chat with with Kayvon Beykpour of Periscope at TechCrunch Disrupt he mentioned another reason people were watching Periscopes: cable companies had technical problems broadcasting the fight so fans looked for other sources. He also mentioned that they received 66 DCMA takedown requests and that 30 were actually removed (the remainder had already ended or were not in violation.)