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Reds turn to pay-per-view in search of new revenues

July 31, 2013 Tags: Reads 4 comments
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“Watch Live,” screams the banner on Manchester United’s official website, the club declaring that “pre-season has arrived” alongside a warning that MUTV online is the “only place in the world” to watch the Reds’ final warm up fixture against AIK in Stockholm next week. Indeed, it is the first time that the club has aired a pre-season friendly on pay-per-online-view platform marking a potentially lucrative new channel.

And the cost for the privilege of catching United’s upcoming friendly against AIK in Stockholm? £5.95 for the online stream.

Except that MUTV online certainly won’t be the “only” place to watch United’s game at the Friends Arena next Tuesday – not in the age of live streaming from a myriad of unofficial sources. It leaves the club’s bean counters betting that  the professionally delivered stream will beat a hefty amount of arbitrage when the teams run out at the 60,000 seat new-build stadium.

At that price club is presumably not banking on the experiment to fund David Moyes’ albeit limited transfer activity this summer, although if each of United’s claimed 699 million “followers” do subscribe the Reds stand to make £3.9 billion in revenues. Should that happen, even the more cynical among the club’s support might expect a midfield acquisition this summer.

In reality, with the match also being shown on MUTV, the club’s “one off, non-repeating cost” that is “not available as part of any existing MUTV Online subscription” is likely to be taken up solely by the overseas market. It is an audience that will not include fans in Thailand, Malaysia, Saudi Arabia, Bahrain, Kuwait or Turkey due to broadcasting restrictions, but may tempt others with the novelty.

MUTV remains a niche product even in England, with a range of content focused not on live first team action, but interviews, chat and reserves fixtures.

Still, the trial is a noteworthy attempt to find new media revenue streams outside of the centrally negotiated Premier and Champions League broadcast rights. Or a flagrant attempt to rip-off fans already spending large amounts supporting United at home and abroad, depending on the perspective.

Yet, with the Premier League recently defeating First Row Sports in a UK court case, United’s pay-per-view deal is one small step in the direction of official live online content. To date MUTV Online offers subscribers brief match and news highlights, while The Times has won the right to stream 30 second Premier League clips behind its paywall in the coming season.

The Premier League’s victory means that major UK Internet Service Providers will be forced to block access to the Swedish-based stream-sharing website during the coming season, although there remains a myriad of alternative online, albeit illegal, competitors.

Back at Old Trafford United’s Stockholm ruse is latest in a variety of approaches to squeezing revenue out of both fans and sponsors. The summer tour is likely to net the club eight figures in new income, with more than 250,000 fans flocking to see a mix of first team and youth players in Moyes’ tour party. The appearance fee for Monday’s fixture against Kitchee in Hong Kong is thought to have approached $1 million alone.

Meanwhile, fans will pay between 500 SEK (£50) and 795 (£80) to see United visit the Friends Arena next week where Wayne Rooney is expected to make a first appearance of the pre-season programme. The striker’s entourage has sought a transfer this summer, with supporters’ reaction to the player’s appearance in Stockholm and back at Old Trafford for Rio Ferdinand’s testimonial potentially bringing the saga to a head.

Elsewhere, the club continues to sign up sponsors on a sectoral basis from mobile telecoms, to tomato juice and even paint. It is a strategy based on claiming ‘exclusive’ partnerships from region-to-region. This summer, for example, the club secured a new partnership with Russia airline Aeroflot, switching from long-term sponsor Turkish Airlines.

And record commercial income is set to drive United’s gross revenue figures past £350 million when the end of fiscal year-end results are announced in the coming weeks. A partial pre-payment from United’s £357 million 2014 – 2021 principle shirt sponsor Chevrolet, a new multi-million naming rights deal on Carrington from current title sponsor AON and other regional contracts have contributed to the steep rise in revenue.

United’s turnover remains some way behind global leader Real Madrid – the Spanish giants earned more than €514 million according to the last reported accounts. However, some analysts believe that United will come close to challenging that figure in the next three years, although net debt remains above £300 million.

Still, in the short-term United’s commercial department will keep a watching brief on next week’s viewing figures. After all, the Football Association secured more than 300,000 paying viewers for England’s match against Ukraine in 2009 at between £4.99 and £11.99 per customer.

United is unlikely to draw a comparable audience for a friendly even with a global fan-base; around 80,000-100,ooo supporters subscribe to MUTV in the UK, with an undisclosed number of overseas viewers through syndication partners across Asia.

But should the club beat that modest number then Old Trafford’s chiefs will have something to cheer this summer. After all, the suits’ performance in the transfer market has been decidedly haphazard.