Thursday September 10th, 2015

LAS VEGAS — On Aug. 1st, Twitter was abuzz with MMA fans enthusiastically posting about Ronda Rousey’s 34-second demolition of Bethe Correia in UFC 190. Many willingly paid $59.95 for the right to see Rousey, the UFC’s biggest star. Others watched another way: On Periscope, the Twitter-owned live streaming app which has emerged a significant threat to the sports pay per view model.

Launched last March, Periscope has rapidly become a wildly popular app. Within its first ten days, Periscope had more than one million signups; today, Periscope has more than 10 million users and has streamed 380 years of content, including an average of 40 years every day. It has established a foothold in the sports world, with Periscope streams utilized to provide behind the scenes access. Last May, Periscope streamed footage of Manny Pacquiao warming up in his locker room for his showdown with Floyd Mayweather; the PGA Tour has used Periscope to stream golfer press conferences.

Periscope’s role in sports, says Danny Keens, Twitter’s Head of North American Sports Partnerships, is to provide complimentary content. “We want to give users sneak peeks and access that may not make traditional broadcasts,” says Keens. “We want to work with sports partners, not compete with them.”

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Still, Periscope has inadvertently become a destination for broadcast piracy. Thousands of Periscope users streamed the Mayweather–Pacquiao fight — the process is often as simple as aiming a phone at a televisions screen — while Rousey’s fight sparked effusive social media praise for Periscope’s streams. Pirated streams are nothing new; websites and YouTube users have been doing it for years. But Periscope has created a far easier way for fans to illegally stream pay per view content.

An example: Matt Steinbach, 26, from Los Angeles, had tickets to a concert the night of Mayweather–Pacquiao. There, he logged on to Periscope, shuffled through a few streams and by the third round found a “crystal clear” stream that he watched on an iPhone with basic LTE service. “It was very easy to find the streams; they were trending throughout the evening,” says Steinbach. “The trick was finding the highest quality stream, which only took a few tries.”

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And another: Raymond, a 28-year-old from California, used Periscope to watch the Rousey fight. He signed onto Twitter, searched #Periscope and #UFC190 and immediately found several Twitter users posting that they intended to stream the fight. "The quality was good [and] the sound was OK,” says Raymond. “The only problem was if the person who is broadcasting was getting too many likes Periscope would shut down the broadcast. But if that happened I would just go back on Twitter and search for a new person that was broadcasting [and] find the fight in less than five minutes again.”

Opinions on how real a threat Periscope is to pay per view vary. To some, Periscope users, like many illegal streamers, do not represent a sports core audience. Translation: Periscope streamers are not likely to buy a fight anyway. They point to the robust numbers for Mayweather–Pacquiao (4.6 million buys, a boxing pay per view record) and Rousey–Correia (reportedly more than 900,000 buys) as evidence of a minimal impact.

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Others, like Showtime Sports Executive Vice President Stephen Espinoza, are not so sure. According to Espinoza, there was “widespread piracy” of Mayweather–Pacquiao that generated views in the thousands.

“[Periscope] is a serious concern,” says Espinoza. “Anytime a new form of technology impacts the delivery of content, it’s a problem. The situation with Mayweather–Pacquiao was certainly not a positive one. There was a general atmosphere of lawlessness and piracy [with] Periscope for that event.”

Identifying Periscope’s illegal streams has proven to be challenging. Networks like Showtime and HBO have developed a reliable system to shut down internet streams. With promoters, they contract media protection agencies — Irdeto, for example — that specializes in working with websites like YouTube and can quickly disable pirated content. Periscope is different. The app itself doesn’t have a Twitter-like search component,  which relegates network officials and watchdog companies to search social media for users posting illegal streams, notifying Periscope and then waiting for it to take the stream down. Says Espinoza, “The primary challenge with Periscope is having a reliable way to identify the infringing streams.”

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If a Periscope user doesn’t leave any imprint on social media, it is extremely difficult for the stream to be identified and taken down. And as technology changes, Periscope streams will become more appealing. At a press event on Wednesday, Apple CEO Tim Cook said the company believes the future of TV is apps. Should Periscope establish a presence on Apple TV or other smart televisions, which seems inevitable, it will make a standard definition-level stream a compelling alternative to paying north of $60 for a live broadcast.

Periscope officials are clear: They do not want to be in the pirated streams business. “The moment Periscope becomes a disrespectful disruption is the moment that we don’t get to have a presence at these events,” says Keens. Officials are actively working with networks to develop a mechanism to attack pirated streams. Events scheduled over the next few months could increase the urgency: Both Showtime and HBO have high profile pay per view shows, beginning with Mayweather’s welterweight title defense against Andre Berto on Saturday.

The hope is that boxing fans will buy the fights. The growing fear is that they will decide to Periscope them.

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