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R E C E N T L Y

21st Challange
By Charlie Varon and Jim Rosenau
Ticklers for every situation
Plus: Haiku error message winners
(02/10/98)

Windows on their world
By Karen Lillington
On site at Microsoft's museum and shop: Where the Windows never cease
(02/09/98)

AOL's insecurity complex
By David Cassel
The online service can't even keep its own staff bulletin boards private
(02/06/98)

Let's Get This Straight
By Scott Rosenberg
Technospeak, part 2: A turnkey solution in every pot
(02/05/98)

The Net's new turf wars
By Rebecca Vesely
Domain name mavericks take their case to Washington
(02/04/98)

BROWSE THE 21ST FEATURES ARCHIVES

J U S T_P A Y_F O R_I T__________- - - - >
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BY ANDREW LEONARD | The ratings may end up being huge, but it's still a safe bet that few viewers of CBS's Winter Olympics television coverage -- with the possible exception of crazed figure-skating junkies -- are going to be fully satisfied at the close of the 128-hour onslaught. The curling fans will gripe that their favorite sport got no air-time respect. The hard-core hockey and cross-country shoot-'em-up biathlon action enthusiasts will howl at every up-close-and-personal, how-I-survived-cancer-and-learned-to-ski-jump special feature.

Luckily, aggrieved sports addicts can turn to the Internet. It's no accident that sports Web sites attract phenomenal streams of traffic. Need to know the current world rankings of the top 50 lugers? Absolutely, positively must know right this second who your college ice hockey team is scheduled to play next Thursday? This Web's for you.

And just wait -- the multimedia future is hurtling toward us. The true promise of interactive television -- "the dream that never came," as Ross Levinsohn, vice president in charge of programming at CBS Sportsline, puts it -- will be delivered by sports Web sites. Video broadcasts of every Olympic sport, on the Net, when you want it, where you want it, even from the camera angle you want! It's the obvious next step, the answer to every disgruntled televised-sports fan's whine. We've all heard the Net-utopian melody: Technological advances always equal increased access and more choices. Who cares what NBC or CBS decrees that we must see? We'll decide for ourselves.

But only if we're willing to pay. Sad to say, there won't be any free Olympic lunch in the future -- especially not if we're expecting a bigger menu than we already enjoy. In fact, if the past is any guide, the era of free, "in-the-clear" televised sports may itself be doomed.

In sports broadcasting, new information technologies generally do mean more choices -- but they also require more cash. And the emergence of the World Wide Web as yet another distribution medium for sports events might well make things worse, by subverting how international sports broadcasting rights are sold and exercised. The only real option for Web broadcasting of the Olympics will be the pay-as-you-go model.

"It would have to be some kind of pay-per-view," says David Klatell, author of several books on the sports industry and a professor of journalism at Columbia University. "Otherwise it's freeware, and that's intolerable all the way up and down the line."

Today, billion-dollar international sports events like the Olympics are far too valuable to be treated as "freeware," to be recklessly downloaded into a medium that respects no borders. The International Olympic Committee earns nearly all its revenue from the sale of "territorial" broadcast rights to some 180 local broadcasters around the world. But if any one of those broadcasters made part of the Olympic video feed available via the Web, it would be immediately accessible to anyone, anywhere -- thus "diluting" the value of the rights, as they say in the business.

That won't happen. No one will allow it, particularly not the notoriously rights-stingy IOC. Memories of the 1980s are still too clear, as Klatell points out: That's when Ted Turner's TBS and TNT "superstations" took brash advantage of satellite technology to start beaming programming into markets all over the United States.

"People discovered that Turner was buying local rights and distributing the stuff nationally," says Klatell. "And not only was he invading other people's markets with it, but he was paying a very low fee."

Such market upheaval always occurs when new technologies are introduced, says Klatell, and by this late date in the digital revolution, the cannier rights-holders are hip to the possibilities. Levinsohn says that Sportsline, even though it's owned by CBS, isn't permitted by the IOC to put video of Olympic highlights up on its Web site.

"I don't know that they are worried about dilution yet," says Levinsohn. "They are just protective of their product. They have networks that have paid hundreds of millions of dollars for those rights."

Hundreds of millions? In the booming world of sports broadcasting, that's practically a passé figure. Try billions -- as evidenced by the recent $17.6 billion spending binge by ABC/ESPN, CBS and FOX for NFL broadcasting rights. And while U.S. broadcasters lead the way, the spiraling sports-rights madness is far from a purely domestic pastime. All over the world, in every broadcasting market, the business of sports broadcasting is one of the most inflationary businesses around.

The explanation for that inflation, say industry analysts, lies in the proliferation of new information technology itself. All over the world, cable and satellite broadcasting companies are engaged in a desperate struggle to find entertainment "content" that will allow them to break into new markets. The international language of sports competition has made sports events a marquee attraction and led to dramatic bidding wars.

All these new cable and satellite broadcasting companies provide access to the sports events they purchase through either subscription or pay-per-view charges. And as new competitors enter old free television markets, sporting events that were once available free of charge are now "migrating" to the other side of the tollbooth. Such a process, also referred to as "siphoning," is a hot -- and bipartisan -- political issue in many nations. To the wired entertainment consumer, it appears as if the available smorgasbord of sports programming is ever more drool-inducing. But in actuality, less and less is available in free, advertising-subsidized form. The low-income, Jurassic-television-age sports viewer is being left behind.

A Japanese journalist for the newspaper Yomiuri Shimbun neatly captured the irony while reporting the purchase of World Cup soccer rights for 2002.

Kenji Kawashima wrote: "The ongoing information revolution, which U.S. Federal Communications Commission Chairman Reed Hundt has termed as a 'major stride forward for humankind,' is serving to strip the public of television entertainment it has long enjoyed free of charge."

"Certainly in the last 15 years we've seen a lot of things moving to the pay service arena," says David Donovan, vice president for legal affairs at the Association of Local Television Stations, a Washington, D.C., lobbying group striving to reverse the rights flow tide.

Such a reversal is not an impossibility. The United Kingdom and Australia both have anti-siphoning laws on the books aimed at protecting public access to "major" sporting events, and the European Community is considering similar legislation. But in the United States, the FCC has generally refrained from taking such action, usually on the basis that it would violate the First Amendment.

Local anti-siphoning laws can only apply to local events, not international extravaganzas like the Olympics. That's not an immediate problem for fans of downhill skiing, though. For now, the Olympics are so valuable that the major networks can't afford to give up the rights completely to the "pay service" realm. But increased access, through the Web, for free? Forget it -- even if, as is the case, potential Web competition is hardly a major worry yet for established sports broadcasters.

"I am not sure that it is even on the radar screen," says Donovan, "or if it is on the radar screen, it hasn't hit critical mass."

Critical mass? Maybe not. But Steve Zales, general manager for CNN/SI Interactive, says the various rights holders are beginning to pay attention, even if they're not sure exactly what to do.

"I don't think any of the organizing bodies have mapped out a long-term strategy," says Zales. "Everybody is leery about making a determination that might seem to be inappropriate two or three years down the road. We're trying to make sure that we are in constant conversation with the owners of footage so we can play a fairly aggressive role."

N E X T_P A G E | When it comes to sports, the Web is still wide open

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ILLUSTRATION BY BART NAGEL