Between 10 Million and 20 Million Fans Ripped Off Wilder-Fury II, Piracy Symptom of Larger Problem

JohnWallStreet

Extraordinarily high theft” of the heavyweight title rematch between Deontay Wilder and Tyson Fury on February 22nd resulted in a depressed PPV sales total (estimated to be between 800,000 and 850,000 buys). VFT Solutions’ Wayne Lonstein (a source who admittedly would benefit from talk of rampant piracy) said that his company tracked between ten million and twenty million “live views of the fight on major social media platforms” and another ten million views in the immediate aftermath of Fury's victory. While piracy is certainly problematic for broadcasters, promoters and fighters alike, Eleven Sports’ Chief Strategy Officer Frank Golding explained that illegal streaming is actually symptomatic of a larger issue; “the service being offered does not represent the value sought by the consumer. Solve that problem and the symptom goes away."

Howie Long-Short: Golding insists that "on balance, people want to pay for products and services they perceive to hold great value.” He cited iTunes' success in converting Napster (and other MP3 program) users into customers as a prime example of how adding value to a product or service (think: provided a catalog system, protected listeners against viruses) can change consumer behavior. It reasons to believe that if ESPN and FOX Sports gave fight fans more for their money, more fans would have bought the PPV. If Lonstein's numbers are accurate, there were "at least ten million - possibly as many as twenty million - additional fans willing to pay something. Imagine if [ESPN & FOX Sports] got just $2 from every streamer, that would be an extra $20 million to $40 million in revenue" (or +/- 2/3 of the total number generated in PPV buys).

The current sports PPV landscape is “not too dissimilar” from the computer software business of the late 90s, when people were pirating programs and the black market was supposedly costing the industry millions - if not billions - of dollars. But Golding says there is a flaw in that logic. "The majority of those who pirated the stream - like those who bought bootleg software - were unwilling to pay full price." 

With so much money at stake, it’s fair to wonder why rights holders aren’t taking a more defensive stance against those who are stealing their content. The digital sports media executive says it’s simply a matter of optics (i.e. suing fans would not be good for business) and doing so would more than likely just result in the “Streisand effect” taking place.

With preventative measures limited in their efficacy (though the technology continues to improve), broadcasters need to either develop new products that encourage the legal consumption of content (keep reading) or have the stomach to use the high-quality programming as a loss-leader until consolidation within the space begins. The NYT, which began to aggressively paywall content in the early 2010s causing traffic and ad revenues to decline, has since found prosperity in digital subscriptions as other newspaper businesses have died out.

Maintaining a dynamic pricing system would have helped ESPN and FOX Sports to combat the piracy that occurred. It's likely that many of the people who illegally streamed the fight watched with subpar video quality. If the level of production provided on a $79.99 PPV is not necessary for all viewers, why not provide those individuals a more basic offering and attempt to monetize them at a lower price point. Similarly, there is likely a portion of the audience that would be willing to pay a few extra dollars for a broadcast with some additional features (think: chat room, advanced stats, alternative audio options). Offering access to the fight at a steep discount after round 6 or a single round (perhaps the 12th) for a few bucks are other ways rights holders could potentially convert some of those streaming illegally into paying customers.

Giving viewers a couple of free rounds for might be another solution worth exploring (yes, I'm well aware that a fight could end early and that it would be a risky endeavor). It’s simply a matter of tapping into the human psyche. “Once a consumer buys in a little, it becomes a lot easier to convince them to buy into something big.”

If a broadcaster isn’t going to get a fan to buy the PPV, targeting those watching illegally and offering them high-quality highlights packages - at no cost - makes sense. Rights holders could "throw pre-roll ads on the clips and capture some additional revenue."

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