Revisiting The SPFL Network - Is now the time for a Scottish Football Streaming Service?

Around 3 years ago, this site published an article about SPFL broadcasting that resonated more than most. It was hammered out over a couple of sleep deprived evenings looking after a poorly 1 year old in-between sessions playing Papers, Please.





As befitting such a thrown together conglomeration of rough ideas, it probably remains as the piece that brought most discussion that this site has ever brought (and you can read it at http://www.thefootballlife.co.uk/post/113607597851/the-spfl-network-the-proposal). But now it’s time to look at it again as the SPFL begins to enter a 12-18 month period where TV deals will be on the table once more and where the question must be asked once more as to whether to innovate or play it safe with the broadcasters.





The right here and right now is perhaps both the best and the worst time to talk about this sort of thing. Yes, MP and Silva have international rights and yes, the SPFL might just actually belong solely to one broadcaster for the first time since the Setanta days thereby hopefully both making more money and also making life cheaper for fans of the game but there are other encouraging signs. For a start, the figures who were slaving away in the background four years ago are now recognisable and with a platform to put ideas out to the public or even to clubs. People may mock the likes of The TwoPointOne or The Terrace Podcast, but the reality of the matter is that they don’t just own content, their contributors have progressed from slaving away for no recognition to recognisable writers in their own right (see Messrs Fowler, Sked and Bienkowski). Or take a Grant Russell or a Scott McClymont, out of the journalistic rat race and into club media. These people aren’t decision makers, but they have transferred from being the next generation of Scottish football influencers into the current generation of them.





That, by no means, is to suggest clubs will listen to them, but it is to say that this sort of thing can at least get a bit more in the way of support than it has before.





But enough of journalistic meta-conversations, what is the SPFL Network?





The idea is simple and replicated by many other companies - The SPFL’s own online streaming network showing live games and archive content: everything you would expect from a football league owning their own broadcasting.





Back when this site originally proposed this idea, two issues were glaring: firstly, the cost side of things and, secondly, Scotland’s infrastructure so, if I may counter both with two significant market changes that have happened in the past few years.





Infrastructure wise, the STV area (basically, all of Scotland except a slice of Dumfries and Galloway and the Borders who choose to watch Border) has the third highest take up of streaming services of any ITV area in the UK. As per BARB, this is around 37% of all STV households which, if we knock a couple of percentage points off that thanks to Deekaboot watchers in the south west is a number we’ll assume is a nice round 35%.





So, if 35% of all Scottish households have a streaming service subscription, just how many potential customers does that equate to? As per Scottish Government figures, there are just under 2.5m households in Scotland which gives us around 875,000 households in Scotland alone with a streaming service subscription. As per BARB, takeup of streaming services is rising by about 25% per year and, with these figures being all at least 6 months old, it’s probably a fair assumption to think that Scotland has already broken the 1m household barrier on households with subscriptions to streaming services - this number is only going to increase further as time goes on with the biggest subscription demographic with 16-34 year olds already both well over 50% in terms of household saturation of streaming services. By mid 2020 (when the next SPFL TV contract will kick in), even at growth lower than any annual growth figure BARB has recorded in the last 3 years, over 1.5m Scottish households will have signed up for a streaming service of some kind.





So, let’s quash one myth immediately - the customer base for an SPFL streaming service is there. It’s there big time.





And, I’ll admit, not all of these households would want a SPFL network subscription so let’s cut our number of 2020 potential customers a little bit more.





Of the streaming services people use in Scotland, it’s around 6% that have a NowTV subscription. The only reason (let’s be honest) you get a NowTV pass is for football - that’s not a criticism of the service, but it’s the truth. You don’t get it with a Sky subscription, you use it because you don’t want to pay for a Sky Subscription but you do want to watch a particular game so we can put it on top of the total Sky Sports subscribers in Scotland (around 850k but falling) which gives us around 900,000 households currently shelling out their money to watch Scottish football in Scotland alone.





So, we have 900,000 households in Scotland which can potentially watch Scottish football (obviously, not all do - at least not at once) and, come 2020, ⅔ of those households at least (likely, the proportion will be higher due to disposable income reasons) will have streaming services so, let’s call it 600k.





You read that correctly. Come the beginning of the 2020 season, there’s around 600,000 households who will have both the inclination and the technology to subscribe to a online streaming service put together by the SPFL.





Three years ago, my figures were based on initial start up costs of £6m and subscription costs of £5 a month requiring around 400k subscribers to break even on the current deal.





In 2018, my figures are based on £8m costs and subscription costs of £10 a month but with subscriber figures based on the figures extrapolated from BARB’s data. Three years on, we can gauge revenues a whole lot more accurately because of BARB’s data and also because everyone who ever mentions it to me says “I’d pay £10 a month for that”. So everyone can. After all, £10 a month is still a considerable wedge cheaper than a Sky or BT subscription.





Even if we base it on subscribers dropping considerably during the off-season, that is over £60m potential revenue per season.





Even in Peter Lawwell’s wildest dreams, BT or Sky aren’t about to throw £60m a season at the SPFL. Board members know it, I know it and you, the reader, knows it.





So let’s talk seriously about it. There are technological challenges to overcome - albeit none of them are in any way insurmountable. Live streaming from Dingwall. Live streaming in HD to potentially half a million people at any one time. Having the hardware in terms of cameras, editing and expertise to do such a venture well. But, outside of wage costs, these are things that are decreasing in cost all the time - especially if you’re well prepared and ahead of the curve in setting things in motion.





The real challenge for the SPFL is funding the thing to get it off the ground. Start-up costs aren’t massive, but for an entity which, for the past few years, has barely broken even, it’s a potential deal-breaker unless every club buys into it and is determined to make things happen. We all know that that means Celtic. And if that means Celtic have to pretty much pay the start up costs themselves with a guarantee that season one revenues would see an amount fenced off to get them repaid with interest (and the offer made to any club who wants to/has spare change lying around to chip in too). That’s an economic reality that we have to face up to.





But, while I may be some starry eyed optimist, these figures make sense. Even the best projections of the SPFL’s next deal see them earning around £30m a season just doing the same as we always have (my own opinions on that matter are somewhat more pessimistic). What it won’t cost, however, is £10m a season to run and even if subscription figures landed well short of my 600k domestic only projection, they’d have to be catastrophic to not make the SPFL more than what they make now even after costs and they’d have to be getting towards the catastrophic stage to not make £30m plus costs a year.





This is all without selling a single subscription beyond Hadrian’s Wall. Internationally, it’s hard to collate accurate figures aside from the fact that this site already did that about 2 years ago getting it to around 75,000 regular non-UK viewers which included a guesstimate of Club TV subscribers (given no-one releases figures of that). That’s another (ish) £7.5m on the table.





Entirely without a hint of not being serious, I believe that an international SPFL Network, at £10 a month in all territories, would cover its costs based on non-UK subscriptions alone. That makes that £60m a season figure from Scottish only subscribers (which is, remember, an underestimate given I’m assuming that off-season subscriptions drop to nil with that and, also, not including anyone subscribing in England, Wales or NI) profit and profit alone.





I am not going to kid anyone and suggest that this is not a massive risk for the SPFL to make, but it’s a hell of a lot more realistic than SPL TV ever was, it’s a market that is only expanding and it’s a market that, unless executed in the most cack-handed way imaginable, promises to blow BT and Sky out of the picture for good.





For potentially tripling what each club gets in from broadcasting each year, how could anyone possibly argue that it’s not a risk worth taking?