Konkurransetilsynet

During the winter of 2007/2008 the Competition Authority entered into negotiations with the Norwegian Football Association (NFF) about the forthcoming sale of rights to Norwegian Premier League football for the period 2009-2012. In 2005 the Competition Authority considered the statutory basis for conducting collective and exclusive sales of media rights to Telenor and TV 2 for the period 2006-2008, although no decision was taken. On the other hand the Competition Authority was concerned that the continuation of exclusive sales in the next contractual period would result in negative competitive consequences to the detriment of consumers. In order to secure the most effective competition over rights, the Authority contacted the NFF both in writing and verbally and provided guidance on a number of specific points about the formulation of the competitive basis for the forthcoming sales process.

The Competition Authority was keen to ensure that if the rights were to continue being sold collectively by the NFF, then arrangements should be made so that they could be shared between several competing parties. In the opinion of the Authority this would help to promote competition between traditional broadcasters and not least between different distribution platforms. The Authority was of the opinion that such a dispersion of media rights would benefit consumers in terms of availability, price and quality. The purpose of this evaluation is to investigate how the new Media Agreement has affected consumers according to these criteria.

Availability
The media rights for 2009 to 2012 were sold to a number of different parties, including TV 2, Lyse Tele/Altibox, Schibsted and NRK. For the current period these rights have been dispersed among several competing providers, and as documented in the evaluation, this has resulted in both increased access to pay-TV and more matches on free-TV in 2009 than in 2008. It should be noted that increased availability has probably also meant that more viewers have actually seen Norwegian football in 2009, since there has been a substantial increase in both subscriptions for pay-TV/online TV and viewers of free-TV [1].

Prices
When several parties compete for the same customers this normally results in lower prices and/or increased quality. The Competition Authority's analysis shows that in 2009 consumers were able to choose among several more matches than in 2008. At the same time prices have dropped and become more differentiated in respect of the various match products. The distribution of football rights among several providers and the subsequent competition has thus helped to create a wider product selection and lower prices for the benefit of consumers.

Quality - product development and innovation
The Media Agreement has therefore resulted in a greater selection of football match products, particularly on the Internet and IPTV platforms It is also interesting that IP technology has enabled consumers to have access to a range of new services, including a greater degree of interaction between consumers and providers and the opportunity to view clips from matches or whole matches after a match has been played. It can thus be argued that the new Media Agreement has served to encourage innovation in respect of the provision of football as a product and has extended the competition arena between traditional TV and online TV.

One essential condition that applies to this competition has been ensuring adequate quality of online TV services. As regards the online TV platform the Media Agreement has helped to promote technical developments that are making it possible to achieve better quality images by using adaptive streaming technology. Online TV providers have also made adjustments to ensure that the capacity of the underlying infrastructure can be used efficiently so that the Internet can cope with more simultaneous viewers without crashing. TV 2 and Schibsted have indicated that this appears to have worked well during the 2009 season.

According to a study, football broadcasts constitute the type of sports content that generates a high willingness to pay among TV viewers [2]. This means that football is an excellent driver to motivate rights holders to undertake further development of broadband TV and online TV platforms. However, the online platform still lies some way behind traditional TV in respect of image quality and reliability of provision, although during the forthcoming years it is anticipated that these differences will reduce considerably. In the long term it will therefore also be possible for the Media Agreement to encourage competition between tenderers on the various different distribution platforms.

Notes

[1] The Competition Authority has obtained information from market participants showing that there has been an increase in subscriptions in respect of both pay-TV/online TV and the number of viewers of free-TV.

[2] See Randi Hammervold and Harry Arne Solberg, "TV sports programmes – who is willing to pay?”, Journal of Media Economics (2006).