IMG Media’s Sport 24, is the first and only live sports channel for the airline and cruise line industries, which was launched in 2012.
Part of the leadership team and responsible for four divisions within IMG Media, including Channels (Sport 24 and EDGE), Esports, Replay (Archive), and Home Entertainment, RICHARD WISE, SVP Content and Channels, who has “steered the ship” since inception, offers a “tenth anniversary” overview of the channel.
Excerpts from a wide-ranging interaction:
To start off, can you give me an overview of the channel? How did it come to be and what is the origin?
So basically there was a gap in the market. We had all the facilities at IMG to carry this out. And so, we did it 10 years ago. We started small but it got very popular and we grew fast. Then obviously we had the pandemic, which we’re now forgetting very quickly, hopefully. And now we’re starting to grow again with amazing acquisitions and new airlines joining and representing some of the biggest sports federations in the world. So, that is a very quick overview.
There’s two elements to the channel. I think today we’re going to focus predominantly on the airline business. So you’ve got Sport 24 for the airline business, and then you’ve got Sport 24 for what we call the cruise line business. And they’re pretty much exactly the same channel. There’s a couple of events that can’t be on the in ship channel. So the Sport 24 is even more premium for the inflight than it is for the for the in ship. And then in 2016, because we had so much content to offer, we created Sport 24 Extra, which is a popup channel, which basically comes up during premium times, predominantly weekends when there’s lots of sports on. So either we give passengers the choice of two different sports or the same sport but two different games. I always use the Premier League football as an example, often two big games being played at the same time or the Champions League. So, the passengers have a choice of two of two games at the same time.
One question I had was, are you a monopoly? As in do you have competition in the market or are you pretty much the only guy in the game?
So in terms of what we’re doing, remember, Sport 24 is about international flights. So, it is not for domestic routes, it’s for international routes. And that’s very important. Some countries have, especially the Americas, they have live TV on domestic flights.
That is not our business model. We are all about international flights. When it comes to international flights, we are the only service up there at the moment. But the word monopoly, is not apt as there’s a lot of competition. So basically, the competition is not about sports. It’s about movies or TV or people you know, listening to audio on a plane, if you see what I mean. That’s the competition in terms of, why should people watch live sports when really the majority has always been about movies in the past, so we’ve added a new element of live sports. There’s also live news. But so we’re the only sports service internationally at the moment, but the competition is high because we’re competing, as I said, with movies or TV programs, everything that’s on offer in the plane.
So basically competition is what the viewer, or the passenger could consume, the options available not in terms of somebody else offering a service similar to you?
Yeah, at the moment, we are the only people offering that service on an international flight on a 24*7 channel.
From the list of aircraft carriers that you have as clients, is it a technological challenge because the guys who are on board tend to be the more advanced airlines so the technology must be costly for both?
It’s a cost and technology issue. So, it is difficult to make this happen. You know, as a reminder to people, these planes are basically metal tubes flying in the air pretty fast, going across time zones and across satellites. So since day one we have partnered with a company called Panasonic Avionics. So we create the channel, we buy the rights and we send it to them. And then they are the sort of the biggest player in the aviation business and they make it happen to get into the plane. So they’ve got a very established sort of business there where a lot of the screens you see in the back of the seat or the connectivity comes from them. So we do the first part and they do the second part.
Coming back to the challenge from a cost perspective, it’s not all the airlines have it. So basically is it also aircraft dependent?
Yeah. Very good question. Yeah, it is aircraft dependent. So an interesting examples is that often an airline will have different systems across their fleet and it’s about how to integrate it across all. For the passenger, they don’t care, they just want to see the same thing wherever they’re flying around the world. So with live sports, it used to be a problem for Sport 24 that it could only be really seen on technology that Panasonic had. Now, Panasonic have integrated with all the other systems as well. So an example would be Emirates, they have two or three systems, and they could only show Sport 24 on initially the Panasonic systems. That is no longer the case, they’re integrating all the technology so that passengers, the most important people here, can see it no matter what plane they are on.
The next challenge is you have to upgrade the planes. Number one, they’ve got be connected planes, so they’re going have connectivity obviously. And then the second step above that is they’ve got to have the live TV capabilities. So it is just an extra step in the tech, but now that’s becoming a bit more the norm, it’s a bit easier and I think, a bit like a car, the future, all new planes will have live TV capabilities when they build it rather than having to retrofit.
Okay. So pretty much also the fact would be that all the airlines which have taken it on board would be the ones which are newer fleets and the big ones basically. And yeah, I would assume that if I was just to do a dip stick, it would be all the major Gulf carriers and Southeast Asian ones.
Yes. Our biggest clients really in this area are Emirates, Etihad, Turkish Airlines, Singapore Airlines. These are the big well known airlines. We’ve also got (TATA group owned) Vistara that’s just started (there is a Singapore Airlines connection there).
We’ve introduced cricket to the channel and so Vistara are obviously very interested. And we’ve got a few more hopefully that we will be announcing in the next couple of months and you’ll see that they’re sort of big airlines and sort of the ones that are a bit more advanced maybe in their thinking.
So speaking of the pandemic, I would assume, fly on the wall kind of thing, when you did all your renewals during the pandemic, you would’ve got it at very competitive rates because the whole industry was in the doghouse.
Yeah, so actually a lot of them we did after the pandemic. It’s an interesting thing, and I pat IMG on the back for this. I’ve known these people for a long time. I’ve been there since day one, so I know that I have very good relationships with the federations. We kept them updated, we made a point of paying all the bills. Which was important at the time. No one knew the industry was even going to survive and therefore the channel as well. And so when we’re talking renewals and stuff like that, there’s an understanding. So I think the word I always use is ‘fair’. I’m not in it for short term. I’m in it for long term relationships, you can ask anyone who knows me, that’s what I do. And I think the rights holders have always appreciated that. You know, when it’s bad news, I tell them. And when it’s good news, I tell them, and that’s how it’s worked.
Also I think what’s important is, you know, we’re dealing with the FIFAs, the IOCs, the UEFAs, the ICCs. These are very big sports governing bodies and they’re also quite concerned about things like global feeds, piracy and all that. So, we have high tech encryption and all that. So, they know they can trust IMG and Panasonic to deliver very safe feeds and deliver a good product. So that’s also become important.
I read in some interview, that people book flights only after checking whether there is this feed available, which I find a bit difficult to believe.
Yeah, that’s anecdotal. I mean, we’ve been told, and we have also have lots of meetings of airlines and they always enjoy telling us, you know, examples of a passenger going “Are you showing this game? You know, I’m a big fan” and the airline going “Yeah, this game’s gonna be on, we can check the schedule”, and they go “Great, I’ll book”. This is anecdotal. But we have heard it, I’ve heard it, that passengers are happier to fly at weekends because they can watch their favorite team.
Anyway, so right now you’ve just come of two big events – there’s the Women’s Rugby World Cup and there’s ICC T20 World Cup. Drawing from that allusion that people book flights based on events happening. But also travel, particularly outside of business, is holiday related, right? And the big events are not necessarily holiday related. So how do you square those two factors?
We don’t really differentiate between the two. I think a good example is that we had two World Cups and now we’ve got the FIFA World Cup. So we’ve got three World Cups. Now the FIFA World Cup is normally during the holidays in the summer. But then it shifted and we thought whether that is gonna have an impact on the price we pay? And we actually spoke to a number of airlines and actually in the end, it didn’t make much difference for the airlines. They said that it’s as important for us that it’s taking place in November, December, that it is normally in June, July. So that was quite interesting that even though the event moved that the impact was absolutely minimal.
I would say that it was actually advantageous.
To move it?
Yes, if you are talking India, it’s Diwali if you’re talking beyond it’s pre-Christmas. So it pretty much is sitting in that bridge. It’s a very happy place.
It is. And also, I know the recovery is there, but every month there are more and more planes going back in the air. So being delayed from June, July to November, December has also helped.
True. When we had the Winter Olympics, the kind of air traffic then and what we have today is like completely opposite.
You’re a 100 percent right. So it’s exactly that and that’s working well for us is all I can say . And it is nice to have three World Cups and we’re doing the Cricket World Cup next year in India as well, and more are coming. So it’s working and obviously the big events actually do have a very positive sort of impact on the channel as well.
You have pretty much got all the content there. One thing I I was trying to wrap my head around – is the cost, the technology cost, the, the acquisition cost, the layout cost. I can understand it as a service given by airlines, but if I was to put the airline cap on, do they make money out of it? I don’t get it. As far as the airlines are concerned, it’s a fun, fantastic service for the passenger because he’s able to get it. But you’re not charging a premium for that. I don’t think any airline is charging a premium for that service. And I seriously would contest a view that people are buying tickets based on that. So…?
So first of all, it’s a differentiator. We offer the best live sports in the world. Our competitors don’t. That’s number one. And two is this – they have the data, which we don’t get to see, so they got the data of who’s watching it and they’re obviously seeing that a lot of people are watching it. So then they go, here’s our entertainment budget, movies, TV, music, everything that a passenger can enjoy, and live TV. Now do they add live TV and increase the budget or do they say, you know what, we’ve got so many films we can cut down some of the films and introduce live TV. And basically, the two things, we know is that some airlines have increased the entertainment budget to have live TV while others have cut other areas and introduced live TV.
That’s the content cost. But there’s also the technology overlay…
Yeah, but that when an airline’s paying a fee, they’re paying for the whole lot. So the airlines make money on connectivity as you know, $20 or whatever it is to get connectivity on board depending which flights you’re on and stuff like that. So the airlines make money on that. Question is, you know, where do I see a bit Sport 24 in the future and stuff like that. And we’ve asked airlines…
I was coming to that actually, I was saying in the midterm, pretty much you’ve now had a 10-year story to figure it out and you’ve gone through the worst of it – the pandemic. So now if we’re leading from now, a three year horizon up to the 2024 Paris, how do you view it?
I think we’re going to have quite a few airlines joining the Sport 24 family within the next six months. And you you’ll see those. We are also discussing if Sport 24 Extra become a full second channel.
And for that you need extra bandwidth and so on. That’s being discussed with Panasonic. And then maybe not ’24, but maybe the end of ’24. But can we do it in time for the Olympics? We don’t know. It’s what I’m calling an OTT of the skies where you have the Sport 24 Plus and there you can offer a lot more content, a lot more choice to the passengers so they can enjoy the equivalent of a streaming platform on the plane.
And that is one of the other areas we’re also looking at. The other one we’re looking at as well is at some point can we do pay per view?
That certainly makes sense.
Yeah. Weirdly the technology on planes to do that is not there, yet. So that is something they’re all thinking about as well as to how airlines can also generate revenues for certain events. So that’s how I see the next two or three years, a second channel, possibly OTT after that and maybe a pay per view.
What is the market size for all this? I mean, is there a number? Is there a percentage we were looking at?
Yeah, so the connectivity market, according to Euroconsult, by 2031 there is expected to be 20,900 connected aircraft representing 58% of all IFC penetration.
So, in theory in the future, all those planes can become live, but really, I would say it’s about 25% of the market.
And is it like for mobile, that the technology is becoming cheaper as the advancements are happening?
Yes, it’s not my expertise. but yes. It’s all the bandwidth, the technology, as also the cost of the airline because rather than getting retrofitted, that’s going to cost money, the new planes will already have the capabilities.
It is still very niche.
You’re a 100 percent right. It is still very niche because it takes persuasion to do it. But where we feel very positive about it is because the ones who have, it love it, and they have been with us for a number of years.
None of your partners over the last 10 years have complained?
Not one of them has left it because they went, “Oh, we don’t like it”. It was some in the pandemic obviously as they couldn’t afford it.
So in that sense, has everyone come back or..?
Pretty much. Slowly but surely. I think by Quarter 2 next year, I think we’ll pretty much have everyone back.
And a whole bunch of new guys. What’s your growth in terms of clients over the next year?
We’re on nine airlines this month. We’ll probably be on about 12 to 13 by Q1 next year at the latest. And then we’re trying to add a few more. It takes time as well. I’ll explain why. So probably 13 Q1 and then hopefully going up to about 16 or so by the end of next year. And the reason it takes time sometimes for an airline to switch on is they can say, “Yes, we want to do it”, but then a lot of tech work has to happen before they can switch on. That can take a while. Nothing’s quick.
Again, so 13 carriers global, it’s super niche. That’s a fact. So I’m still trying to figure out the cost. Cost to benefit ratio seems difficult. Normally when you talk high cost technology delivery, it’s numbers which amortize the cost. So does it remain pretty much super niche, super expensive for the providers?
We gotta look at it in terms of Panasonic, they just supply live TV as part of a far bigger contract of supplying the hardware, supplying live TV, supplying connectivity, supplying upgrades, service and so on. So, it tends to be part of a far bigger contract. And, and so therefore that’s where I would imagine a lot of the costs are absorbed.
In terms of the cost of this whole process globally, when you say the market size for the mobility industry – one is the consumer numbers and the second is in terms of a dollar number or a Euro number. The size of that market, there would be three pieces to this. One is who is accessing it (the aircraft etc), the second is the technology part and the third is what is the market size for this whole story?
It’s interesting and that question would probably be better directed to Panasonic. They will have their outlook because they know and it’s obviously thousands of planes that they could be taking this to. And when you at the way the airlines pay normally, they pay per aircraft per month scenario. So that grows.
But for us, in order to put the channel together, which is why it goes to two markets, is we’ve got the airline business that contributes to it and we’ve got the cruise ship business, which actually is also quite a good business to have because they’ve got thousands and thousands of passengers going on cruises across the world. So the two of them make it work for us, if that makes sense. For Panasonic, our offering is a differentiator. They have their own business models, but for them it’s part of a bigger picture of saying that we can offer this.
It’s an icing on the cake for them?
It’s an icing on the cake, which is getting a lot of good publicity. Which is the one thing they don’t get complaints about. All tech providers get complaints because people are never happy. But the live sports, they get loads of very, very positive feedback. And that really helps them. So they obviously put a value to that.
And how does your business flip in terms of a percentage between the airlines and the cruises?
It varies, but I would say about 75%-25%. So the cruise ship business is very important as well.
That pretty much covers whatever I had in mind. If you want to add anything about the channel and its content?
Well, it’s premium content. You can’t have sort of more minor sports in there. It’s all about the premium content. and it’s 24*7 and it doesn’t matter where you are in the world, you’ll get to see sports. And I think that’s really important. So, you can be taking off from Australia, India, France, it doesn’t matter. You’re going to get premium sports whenever you’re flying at whatever time. And it’s weird cause some people still don’t quite understand that. So that’s the message. And also, to expand more on the in-ship, that’s a different sort of model. It’s easier to deliver to ships. They’re a lot bigger and a lot slower!
And therefore, it’s not like takeoff, and in two hours or four hours, you’re landing or changing planes. You’ve got a captive audience for two weeks.
Exactly. It goes back also to your point as the cruise line industry is all about holidays and people enjoying it. They’re not working on a cruise ship ever and they have the big bars, they have the massive screens. So, they can make a bit of a party out of it. So, it’s a different model that. That does not involve Panasonic. That’s a far more traditional delivery and we work with satellite providers to make that happen.
So there, the only challenge would be when you’re crossing territories in terms of geography and the rights?
We’ve got global coverage for the ships as well.
Okay. So, the rights for that are sold separately, right? It’s all built into the right contracts.
Yeah. Totally sold separately.
