Monday 23rd September 2019
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Spark New Zealand will face greater scepticism from sporting bodies and the wider public about its ability to stream live sports after falling back on Television New Zealand for the All Blacks' first match in the Rugby World Cup over the weekend.
Industry analysts say Spark worked hard to make sure it had contingency plans in place, and while those worked, the failure by a partner in its supply chain underscored the difficulties of live-streaming events and risks outside a telco's control.
Matt Henry, an analyst at Forsyth Barr, said Spark will be immensely disappointed given the amount of work done to provide a seamless experience. And while it highlights the complexity of live-streaming services - compared to on-demand services, such as Netflix, where the content is sitting on a server - that doesn't matter to the end-user.
"You could say we tried very hard and point to what the issues were, but, ultimately, the person sitting on their couch doesn’t care," Henry said.
Spark switched the live broadcast of the All Blacks test against South Africa to TVNZ's Duke channel, saying its streaming quality fluctuated for a small number of users during the first half of the match.
The service peaked at 132,000 users. Spark said by the end of the match that had dropped to 126,000.
The issues led to a torrent of complaints on social media, columns dubbing the event a failure, and also attracted criticism from acting Prime Minister Winston Peters.
IDC market analyst Jefferson King said the response was an overreaction and that people had been expecting a problem to emerge.
"It seems like the knives were already out," he said.
Spark took a number of steps to mitigate the risks of failure, which King said may have undermined uptake given the number of matches that will be broadcast free-to-air on TVNZ.
Investors largely looked through the headlines, with Spark shares up 1.4 percent at $4.41 in early afternoon trading, recovering from a weak start to the local session.
Spark trumped incumbent pay-TV operator Sky Network Television in winning the rights for the marquee sports event and has been hoovering up other sports rights including football, tennis, racing and formula one motorsport.
Henry said the success of the event will determine whether other sporting bodies are willing to choose Spark when their rights are up for negotiation.
"Clearly with the first big game, when it doesn’t work, it puts you on the back foot. So if they got through the rest of the tournament and it all went seamlessly, that would mitigate maybe some of the concerns for sporting bodies who are considering Spark as an option," he said.
"But those concerns and questions are going to be more acute than they would have been if the tournament had gone seamlessly."
Henry said the explosion of content means sports are competing for an audience like all other media, which heightens the appeal of free-to-air because of its reach.
"The balance between the dollars and the audience reach is one that sporting bodies are grappling with more and more. You’ll find having something on free-to-air probably becomes increasingly important," he said.
IDC's King said Spark might be able to win back the public if it provides good service for the rest of the tournament, which is crucial to ensure that people aren't put off streaming video.
How Spark proceeds with its sports offering won't become apparent until after the world cup, he said.
"If after the world cup they don’t bring in any new rights, then we can look at Spark Sport and say they are winding back from it," he said.
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