Man Utd's masterplan to be an online media company

Man Utd's masterplan to be an online media company

Manchester United has ambitious plans to drive revenues from online video distribution and social media engagement, says Adrian Pettett, the chief executive of HSE Cake.

Ed Woodward, the chief executive of Man United, showed his hand this week while explaining the club’s quarterly accounts.

Woodward’s analysis mainly reflected the week-to-week job of running one of the biggest clubs in the world – the scale of Paul Pogba’s agent fee and the potential financial penalties of not qualifying for the Champions League.

But then, during an investors' call, the Associated Press journalist Rob Harris reported that Woodward said the club would "aggressively market" the MUTV app to "drive awareness, downloads and subscriptions".

An initial reading of this among the news media was that the club wanted to use MUTV as a news management tool, to bypass the traditional news outlets and talk direct to their many fans around the world.

Like our political leaders, football managers would prefer not to be asked difficult questions from journalists if they can avoid it.

But there’s more to Woodward’s plan than short-term news management. 

This is a hedge on the future shape of sports media, laying the groundwork to develop MUTV as the central plank of the club’s over the top (OTT) online media strategy.

There’s no doubt that Woodward is talking about the long term, because Man Utd’s accounts reveal how wedded top flight football remains to the linear broadcast model.

The Premier League’s hugely successful collective sales strategy has dominated United’s revenues since the early nineties, and that fact is not going to change anytime soon.

Man Utd’s accounts reveal how wedded top flight football remains to the linear broadcast model.

The club’s broadcast revenues for the last three months were up 12.9% at £31.4m, stemming from the most recent Premier League media rights deal and revenues from the club’s Europa League adventures this season.

So, why bother developing an OTT platform when the media rights teams of the Premier League and UEFA are doing such a brilliant job of marketing the TV rights, based on linear broadcast?

Firstly, MUTV helps to future-proof the club for a time in the future.

The club is a publicly traded organisation and shareholders want to see the board acknowledging recent changes in the broadcast landscape.

Woodward was merely flagging the intention of the club to shift MUTV’s role from a marketing channel to a more rounded commercial revenue stream.

This is commendable because major sports rights holders tend to cling to the status quo that made them rich in the first place.

Technological innovation in sport has often come from those who are locked out of the sports rights market.

It is the smaller sports rights holders who have shown a willingness to push toward OTT, because the sums available from TV are far lower than they are in top flight football.

But that’s changing, led by the major American leagues such as Major League Baseball and the NFL.

Over 16% of US households now subscribe to an OTT digital sports streaming service.

The overall OTT market, combining sport and entertainment, was valued in the region of $21bn in 2016 and is predicted to double in size by the end of the decade.

In the last month, we’ve seen EFL, the second tier of English football, launch its own league-wide OTT play, iFollow.

This allows fans overseas to connect directly to their favourite club. Other sports are at varying stages of progress.

And finally, there was one other statistic from Woodward’s presentation that jumped out. That number is 50%, representing United's share of all social media interactions across the 20 Premier League clubs.

That’s right, over the last three months, half of all the retweets and likes on Twitter, Facebook and Instagram were about Manchester United, even though it is going to finish the Premier League season in sixth place.

Converting that level of fan engagement in to revenue is what Ed Woodward’s MUTV reference was all about.

Perhaps the only question facing the future prosperity of the club lies on the field rather than off it.

Over to you, Jose Mourinho.

Adrian Pettett is th chief executive of HSE Cake, Havas’ sports and entertainment agency in the UK.

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