In 1999, then-RIAA head, Hillary Rosen introduced music executives to a new peer-to-peer (P2P) software program -- Napster. Rosen recalls the room’s mixed emotions. No company wants to compete against “free”; however, they marveled at Napster’s distribution model. Said Rosen: “I think it’s still the best music delivery system that anyone has seen.”
During the 2000s, technology insulated live sports from music and movies’ piracy woes; P2P was great for sharing recordings, but not live broadcasts. Meanwhile, cable providers leaned on live sports to discourage “cord cutting.” But as World Cup 2014 demonstrates, new P2P systems undermine those assumptions. With emerging software, such as SopCast and Ace Stream, fans can share live, high-quality streams of major sporting events (and many obscure ones), worldwide. And websites, such as Wiziwig and FirstRowSports, aggregate links to those free streams. In today’s video, Graham Kill of IP protection firm, Irdeto claims that 9 million people may have viewed pirated streams (some P2P, and some not) of Germany trouncing Portugal. It’s in Kill’s interest to overestimate piracy; however, direct measures of P2P streams (specifically) peg views at 100,000 to 500,000 per match.
This must raise sports/media executives’ hair, much as Napster did for music. As Hutchins and Rowe explain, live sports’ extraordinary value is premised on contract exclusivity. In other words, FIFA doesn’t just sell match rights; ESPN/ABC paid FIFA $100 million to be U.S. viewers’ only (legal) source for English-language World Cup telecasts in 2010 and 2014 (FOX will pay $425 for 2018 and 2022). ESPN, then, translates this (and other) exclusive live programming into stunning cable carriage fees. But when fans stream pirated matches, cable providers, networks, and advertisers may wonder why they’re paying handsomely for once-exclusive fan attention. Still, executives must marvel at P2P -- free, worldwide, high-quality game streams are a fan’s dream.
Will sports/media strike licensing agreements with streamers where music and Napster couldn’t? Or will they fight for rights holders’ coveted exclusivity? If this Cup is any indicator, it’s clearly the latter. Working with IP protection firms, FIFA issued takedown notices both preemptively and during matches. Facebook removed many links; however, streamers and link-aggregators often operate under weak IP regimes (e.g., Spain), making complete stream removal difficult. Sound familiar, music industry? As Twain (supposedly) said, “history doesn’t repeat itself, but it often rhymes.”