The transfer to the fee-based broadcasting system must help clubs and the league to realize their advertising inventory more efficiently. Ivan Meshkov's column especially for the magazine Forbes
«Zenit» — «Spartak» in the first round of the season 2018/19 became the «demonstration» match of the new broadcasting system and got the federal broadcast time, the match of these teams in the second part will be shown on the pay TV channel / Photo of Alexander Nikolaev / Interpress / ТАSS
The transfer to the new broadcasting system must help clubs and the league to realize their advertising inventory more efficently

The season 2018/19 of the Russian football started with an important event: the Premier league signed the new TV contract with «Маtch ТV» (for 4 years and about 7 milliards rubles), аnd the broadcaster announced about the start up of the new pay channel «Маtch Premier» which will transmit all matches of the Russian league. Only several matches of the round will get the federal broadcast time and not always top matches. All the rest – in good (as they promise) quality, without any direct advertising – you can see for 229 rubles per month. There are also the annual subscription and possibility of buying a broadcast of any certain match.

The Russian Premier League tries once again the model of the fee-based broadcasting. The previous trial (from 2012 to 2015 the most of matches were shown legally only for a fee – on the channel «Our football» managed by «Liga-ТV») ended by the President Poutine's wish to create a public sport channel. So, on the third button of TV sets appeared the channel «Маtch ТV» which was the part of the structure of the holding «Gazprom-media» with plenty of free of charge broadcasts of different football and other kinds of sports.

After the World Cup 2018 the transfer to the fee-based system seems rather logical decision: this competition woke up the interest toward football in our country having increased the potential audience of broadcasts, and new stadiums must provide a quality TV picture for which one can pay without any regret. A recent example: the match «Zenit» — «Spartak» in the season 2017/18, according to Mediascope's information, was watched by TV by 3,5 mln persons, and the match of the same teams 2 of September 2018 — 5,9 mln spectators.

Even the most severe critics of the «pay football» understand deep in the mind that this model is inevitable as the evolution process. Almost all European leagues use such model and successfully enough. In England supporters have to pay more than £40 per month in order to watch all matches of league of the country, in Italy, Spain, France — €10-20.

Yes, of course, Russia has a different economy, yes, «pirate» broadcasts are very popular — with a big number of intrusive advertising but free of charge. But step by step, the re-orientation to the pay content takes place: in music, in cinema, now it is time for sport. Moreover, sport events have one indisputable advantage — they are happening right now, the final is unpredictable. And in order to watch sport in live, in good quality and on any platform, the people are ready to pay. And the broadcaster, while transferring to pay broadcasts, gets bigger potential of the advertising inventory and more quality public by means of Big Data. The potential growth of gross mass is possible by two means: increase of the product quality (game) and increase of the picture quality (broadcasts).

Of course, the choice of the fee-based broadcast model must be motivated by a correct system of monitoring and sales which provides a correct information and surely evaluates any risks.

In order to work out an efficient marketing strategy, clubs and the league in general have to learn calculating and evaluating contacts. There is the Metodology for that. It is a mathematic model which interprets statistic data (TV watching, attendance, Internet-reviews, supporters' activities in social nets etc.), analyzes the advertising inventory (number of appearances on the screen, time of staying on screen, game episodes in the area of certain advertising platforms) and considers the volume of broadcasts, club activities, number of matches and other factors.

By means of complex calculations we get the number of contacts with public through all the advertising inventory and the cost of one contact. From these numbers the total value of contacts is calculated. And these numbers are not the same numbers as Russian quasi sport officials take by chance and operate with them.

For example, the total cost of the advertising inventory of all clubs of the Russian league in the season 2017/18 соnsists 3,8 milliard rubles, the same index of the Russian Premier League consists 515 mln., аnd the leader among teams — «Spartak» Moscow — 1 093 621 097 rubles. Among the first three are also «Zenit» (824 882 272 rubles) and СSКА (532 060 547 rubles). The advertising inventory of the outsider «Аnzhi» соnsisted 41 452 776 rubles аnd the one of «Аmkar» which disappeared in the inter-season— 42 709 045 rubles. In the middle of the table are «Dynamо» (88 218 185 rubles) and «Аrsenal» Tula (102 050 332 rubles).

Using these numbers, a club or a league will pack correctly the advertising inventory and will offer to the sponsor reasonable prices, and the sponsor, in his turn, gets the comparative evaluation of its advertising activities.

As a result, on account of a bigger involvement of the supporter who has paid for the broadcast, everyone gains the upper hand. The club which can offer a larger advertising inventory for the sponsor, the sponsor who will know exactly that his advertising works, the broadcaster who gets bigger opportunities for improving broadcasts' quality and, it is the most important, the spectator who gets a quality content not available on a free basis. Moreover, thousands of spectators of matches of the level «Locomotive» — «Spartak» will stay at the broadcaster after pay broadcasts in terms of a priceless Big Data with which the broadcaster can work in the future.

We have to explain why it is logical for a TV channel to work with the Big Data. The fact is that the situation with standard advertising positions and distribution of contacts collected by them, was not in favor of TV broadcasters. According to the humblest calculations, even at the acting model of sport broadcasts, 80% of contacts are collected by clubs, 15% by the league and only 5% by the channel. It is logical that in this situation the TV channel will continue to look for options to increase the number of contacts and revenues from its activity. In order to prove the above mentioned, we will provide calculations in form of diagrams.

In the current situation the growth of the number of contacts (are considered contacts at the territory of RF) is possible in two directions: by means of increasing broadcast watching ratings or by means of increasing the number of matches on air – both of them are hardly realizable.
At the option when the channel takes away a part of broadcasts to the pay content, it will surely influence negatively the total number of contacts with the public but now we will sum up public contacts of the federal TV matches with contact of the pay content, аnd the subscription will let us to form Big Data, accumulate and segment this audience making it much more valuable for the advertiser.
The more quality audience of pay broadcasts leads to increasing the contacts' cost, аnd its potential growth is able to increase the advertising potential even on the condition of keeping the volume of broadcasts.

We should not also forget that, for example, the Russian Premier League's potential is strongly connected with the data of TV watching because namely TV broadcasts takes the lion's share of contacts with the public. Thereafter, cutting down of broadcasts on the federal channel decreases sensibly the potential of both leagues and clubs. It is calculated that in the season 2016/17 were shown 101 matches with the advertising potential 4,1 milliard rubles and in the season 2018/19 spectators will see only 60 matches the advertising potential of which will decrease to 2,4 milliard rubles. However, at the current model, those clubs which could not reach it because of the fact that advertisers preferred top clubs, will have chance to realize their potential. We should mention that ¾ of the RPL's clubs do not realize even the half of their potential, аnd totally the potential of all clubs is realized only on 38%.
100% of realizing the advertising potential includes also the maximal number of match broadcasts. Namely for this reason «Spartak» and «Zenit» have a certain deficit of realization. Upon the fact, these clubs try to use maximally all their inventory. Unless social skills of Spartak's media are a little big «lagging».

As less the football is broadcasted by TV, as less the club can earn. Аnd no one channel can transmit football free of charge and always taking into consideration lower ratings of such broadcasts in comparison with popular shows.

Of course, in order to harmonize his interests with supporters' interests, the broadcaster has to make a careful financial monitoring of risks, anticipations and pricing, аs well as to make pay broadcasts really more attractive than free of charge ones, and define «demonstration» matches which will get a broadcast time on the federal channel.

The ethic issue of paying for broadcasts – it is a matter of each person but it is difficult to argue against mathematics. Because it shows visually that pay broadcasts are the unique correct way to the civilized and spectacular sport TV. For everyone!