Domestic broadcasters pressed by rising price of TV rights

June 01, 2018 | 16:22
As the broadcasting rights of international television shows and events are concentrated in the hands of a select few distributors, prices are growing at an astounding rate, leaving broadcasters to scramble to balance increasing demand for these shows and expenses.
domestic broadcasters pressed by rising price of tv rights
It is still undecided whether VTV wll buy the broadcasting rights of the 2018 World Cup

Vietnamese people may miss the 2018 World Cup

This morning, while Infront Sport & Media AG confirmed that Vietnam has received the right to broadcast the 2018 World Cup, Nguyen Ha Nam still claimed that VTV has yet to reach an agreement with the distributor, according to stated that negotiations between Vietnam Television (VTV) and Infront Sport & Media AG, the distributor of the 2018 World Cup’s TV rights, are difficult because the two sides have not reached a reasonable price to broadcast the world’s biggest football league.

Accordingly, Infront Sport & Media AG offered the price of $10.3 million for the broadcasting rights of the 2018 World Cup in Vietnam. However, Infront’s prices are widely claimed to be too high and many televisions have been trying in vain to negotiate a better price.

Vietnam is currently the only country in Southeast Asia that has yet to announce ownership of the 2018 World Cup’s TV rights. Will Vietnamese people miss the event that comes around only once every four years and will start in two weeks?

Giant television brands take turns to control Vietnamese television market

VTVcab and Viettel’s replacing dozens of channels in April is a typical example of distributors using exclusive rights to control the domestic television market.

VTVcab and Viettel’s termination of the contracts with Qnet—the firm owning the distribution rights for 30 international TV channels—is supposed to break its hold on the segment.

According to data released by the Authority of Broadcasting and Electronic Information, the government has issued licences to 70 international television channels to be broadcasted in Vietnam, including Qnet (30 channels) and nine other distributors (Thao Le, BHDm Fox, and others) with a total of 40 channels.

However, as each foreign television channel nominates only one exclusive distribution agent in Vietnam, pay-TV enterprises have no choice in negotiating the prices of international broadcasting rights.

“The prices of international broadcasting rights annually increase by 30 per cent, forcing VTVcab to replace the current distributor’s international channel package with another that has more reasonable prices,” said Nguyen Thanh Luong, deputy general director of VTV and chairman of K+ television. quoted Tran Van Uy, chairman of the Vietnamese Pay-TV Association and general director of SCTV, as saying at the March seminar about television held at Dalat city (the Central Highlands province of Lam Dong) that the total costs of the broadcasting rights of sports, international TV shows, and international channels takes up 80 per cent of televisions’ budgets.

The increasing price of the TV rights for the British Premier League is another example for distributors’ exclusive hold in this segment. Accordingly, in ten years the price has increased from $2 million to $46 million.

VTV at odds about recovering cost of TV rights

To be able to uphold its tradition of broadcasting the World Cup free-of-charge, VTV may have to feature a lot more advertisements to recover the cost of the TV rights.

However, this may also be difficult as the opening day of the World Cup is just around the corner, leaving little time for enterprises to prepare material.

Four years ago, when the 2014 World Cup started, Nguyen Ha Nam, chief of the VTV Secretariat and Editorial Board, said the revenue from advertising in large leagues has never been enough to recover the cost of broadcasting rights.

“Large sport leagues commonly take place at European timeframes, which means that the World Cup may go from midnight to early morning in Vietnam, which would make it a less sought-after time slot for advertisers,” added Nam.

domestic broadcasters pressed by rising price of tv rights Vietnamese people may have to miss World Cup 2018

The 2014 World Cup also saw record advertising prices in Vietnam, with VND150 million for a 30-second advertisement slot at 2-8 AM, and VND180 million for a similar spot at 11 PM.

During the quarterfinals, semifinals, and the finals, prices went up to VND250-300 million. stated that if advertising prices remain the same as four years ago, VTV could recover the price of the TV right’s by 9-minute commercial breaks for each match.

By Tuan Anh

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