Football tv revenues will continue to rise
Tonight sees the first of a regular series of televised Friday night Premier League games between Manchester United and Southampton. The innovation has not pleased Saints fans, many of whom have had to take time or a day off work to get there. Those going by coach won't get home until 4 a.m. or 5 a.m. It demonstrates the power of television companies over the game.
Competition between Sky and BT is likely to continue, pushing prices in an upwards direction. Down the road, Google, Netflix and Apple might decide to get involved.
Sky remains the dominant sports broadcaster in the UK with the biggest share of 'first pick' fixtures. Last season, it aired 49 of the 50 most-watched Premier League matches. This season Sky is set to air three times as many Premier League matches as BT, including the most-watched Sunday games.
BT's move into sports in 2012 was partly motivated by concern that Sky's dominance of premium television rights was undermining its core telephone and broadband markets. It has spent more than £1.8bn to acquire the rights to more than 400 football matches.
For both Sky and BT, sports programming is a loss leader. They compensate for the high costs by selling customers TV packages and high speed broadband respectively.
There is price resistance to passing on the full cost to consumers. Sky posted its highest level of churn in nearly a decade last month, after TV customers reacted to a 4 to 5 per cent price increase. BT has more headroom to raise prices.