Inside the world of illegal sports streaming

0:05Hello everyone and welcome to another edition of Streamtime Sports. I'm your host Nick Meacham, CEO of SportsProMedia. Now this week's episode is a special one for a few reasons and on today's episode we're going to be going deeper than ever into the topic of piracy but in a different and quite unique way. This week we're being joined by Adam Leventhal who's the senior writer and broadcaster at The Athletic who's just produced an incredible report and podcast on this very topic. It covers all sorts of different angles, including hearing firsthand from some of the fans and what they view and think about piracy into details about how to access piracy and even to sell it.

0:40But to get a better picture of what I'm talking about, let's formally bring Adam straight into the conversation. Great to see you, Adam. Great to be here, Nick. Thank you very much, indeed. Yeah, it's been a hot topic that I've been concentrating on for the last six months. So So it's nice for it to be out there and for people to be able to listen to it and just pull at some of the threads. And there are many. There are many threads. And I love the fact that in this podcast and this report you've done, you've really taken a few different angles into how piracy is working currently today. We on this podcast have covered piracy in a few different angles.

1:17but I like the fact that you've lent into the fan side quite a lot and the actual practical aspects of people getting access to this stuff outside of just logging in online. But let's jump into it. Why did you decide to jump into this podcast and this topic in the first place? Yeah, I think in terms of why we looked at it in the first place, I think a lot of people will be aware of illegal streaming and it just became very, very apparent when you started to look into it how prevalent it is. So we already knew that there was an issue. We already knew because we'd heard various stakeholders talking about it as well, be that the Premier League or broadcasters.

2:00There's always been this sort of creep and worry that what is piracy doing currently and what does it potentially have the power to do in the future? So that's why we went into it. And then actually the podcast itself, we wanted to divide it up into three parts. And that's the culture, the crimes and the crisis. The culture side of things was really enlightening for me to just basically go out and speak to people. And, you know, right at the beginning of the podcast, I went to Wembley, it was just prior to England playing against Wales in a recent international. And I thought, okay, I wonder if people will talk about this and want to be part of it and even admit whether they were going to be illegally streaming or how they were doing it and stuff like that.

2:51It didn't take me long to actually engage with people that were quite willing to talk about it. And a lot of them were pretty angry and animated about the reasons as to why they illegally stream. But what surprised me was how open people were about it and clearly how big the market is for illegal streaming. Because, you know, one guy, for example, said, you know, I've got a fire stick and I have an IPTV service and I'm not alone. About five, 10 people in my office have, you know, illegally stream in various different forms. So that was, that was very enlightening for me to to actually sort of really engage in in the public's view of it and then obviously you know we get into the crimes we also then look ahead which I'm sure we can get stuck into in terms of that crisis because you know one of the things that a lot of people say is that this poses an existential threat to the game because it is inextricably linked with the the finances that underpin football and that comes from media rights which you guys know so much about i mean it was very interesting to hear those initial comments that came through from fans and how i guess it really does validate that the culture is the problem here where it basically is now the the stigma it feels like the cultural stigma around it is is well it's no longer there from a from a consumer perspective that from their side i think it's been normalized to the point where actually it's a bit of a how would i describe it like a um a legacy of the political call us against them type mentality that seems to not just be developing, it's completely matured.

4:33And I walked away listening to this going, I'm not really sure what the future looks like. Maybe before we get to that, just tell us a bit more about the depth of the podcast and what aspects you covered in there. Yeah. So, you know, having spoken to people, I wanted to sort of dig into it a little bit. And I described in the podcast, people may well have already heard it, or if they haven't, they will. but I describe it as being like an onion because there's layer after layer and you keep on digging and then you go, oh, okay. Oh, oh, oh. And then it's all very, very sort of deep and complicated.

5:11And I would have thought for sort of rights holders and broadcasters, it probably brings a tear to their eye as well, a bit like an onion. So, you know, in terms of what we wanted to do is, you know, I suppose this almost sounds a bit surface, but just engage, engage in the market itself. And we obviously did some sort of undercover reporting, and, you know, going to the point of engaging with the purchase of illegal streaming services. And, you know, in the past, you know, if you look over the last sort of 25 years, as it started to develop, people might, you know, have to go to the pub and meet, you know, Dodgy Dave, who would have some fire sticks.

5:51And then you could actually have to go out and have a, you know, a physical interaction with someone or go to a market and find the dodgy electronics stall, for example. But now it's very much just a case of going online, going to, you know, very sort of big, famous marketplace sites and searching for fire sticks, you know, finding a WhatsApp number and engaging with it and getting a code through, then you can basically set yourself up with your own streaming service, which will give you everything that you need and for a fraction of the price. So I was able to find out about that. I also then, you know, through speaking to sources who work in anti-piracy in particular, they were also basically saying, look, these platforms are almost set up like proper broadcasters.

6:41And they'll even have like affiliate schemes and reseller programs and things like that. And you think, well, hang on a minute, that doesn't sound like a sort of an organized crime side of things. It sounds more like a proper setup. But it is organized crime. There is no sort of debate about that. And I was able to sort of dig into that side of things as well and almost see how easy it is for this industry to grow and to almost become a reseller and to find out how much money can be made and the margins that people are making. But ultimately, when you look at the whole thing, yes, piracy is growing and people might think, oh, well, it's a growing business and things like that, but they don't have to take on any of the expenses, you know, and that's where, that's why there is such a huge frustration of, of, you know, rights holders, rights owners, that they're being, they're having their content stolen and that's why they're so aggressively going after it and trying to stop it as best as possible.

7:43But that in itself is a, is a whack-a-mole gain absolutely um you spoke to people from amazon and premier league and fans and uh and um anti-piracy uh expert suppliers a few a few of them which i'm very familiar with um it i sort of you talked a lot about the fire stick uh aspect of piracy which does seem to be the one that's really rampant has this whole layer of organized crime around it um did you find any other examples of piracy that came up in conversation or was that really the one that is let's say the bread and butter of piracy this fire stick type approach because i've heard of there are others that exist that are purely digital but without the fire stick aspect of it yeah i think that you know that it's long been a frustration of of broadcasters and leagues that the fire stick um and and i must point out because you know it's important to do this that the fire stick has become a sort of a catch-all phrase for any device.

8:44So obviously it stems from Amazon having a Fire TV stick initially. And I think, yeah, lots of those people who are trying to protect their rights have been frustrated that people were able to sideload piracy apps very easily via the developer mode on these Fire sticks to enable piracy and to enable these IPTV services to sit on them. And it was interesting thing with FireStick. So I'll come on to these couple of the other sort of main methods that are used in a moment. But we did go on a bit of a journey with the Amazon FireStick. And I engaged with people at Amazon because I was getting information that they were really now facing a bit of pressure to really clamp down on it.

9:36Now, this is quite a longstanding issue, But it just seemed that it had sort of reached a bit of a head over the summer and that there were things that were starting to happen in the background. And then obviously, and this would be longer in the planning than just six months, but they obviously launched their new Fire Stick 4K select, it's called, on a new operating system. And in amongst that, they were also saying that, look, we're going to be blocking the piracy apps on the new device. It's not as open. There is, you know, the developer mode isn't there anymore and it will only be available via the app store and things like that.

10:10But also that over the summer and from now on, they are going to be more aggressively blocking the apps that people attempt to put on there if they do still have an old version of a Fire Stick. And there are millions of those. So this issue isn't just going to stop. It's not going to be a line in the sand. um but yeah i mean one of the other big things which we we discuss and sort of analyze in the in the documentary and this is where it's sort of in a bit of a gray area is is vpns um because you know we've seen brands like nordvpn who we engage with as well and we spoke to them you know they're quite aggressively sort of in the football market sponsors with leads and and sunderland and um a couple of football podcasts as well.

10:56And you just think, are they sort of plonking themselves into this environment because they know how prevalent people trying to circumnavigate the geo restrictions are. And I found it interesting to sort of speak to both sides of the divide in that and learn a bit more about actually using a VPN. Yes, it's good for your own online security, but yes, it does also provide you know masking so you can you can be somewhere elsewhere and and that then helps access you know a foreign subscription or whatever but also then when you are using a vpn sometimes in the terms and conditions it's what you're actually giving away and you know people actually trying to or people now able to access your obviously your your ip address but also your bandwidth and and how that can create sort of links yeah botnets and all this sort of stuff it's it's very complicated but it's and that's where it's another piece of the jigsaw of of piracy and that's that's known as geo piracy in the documentary rather than just sort of your bog standard piracy i thought that was interesting both those both those aspects um i wasn't really familiar with the fact that the pirates were actually using fans computers to create this network of access across the world with that.

12:14And I think the VPN side is a very interesting topic. Your point about how VPNs, I've seen them marketing and sponsoring a whole host of assets sport and non-sport related. And yet when I speak to people about their use of VPNs, it only really comes down to something to do with the subscription access or accessing content they shouldn't be in some way or shape or form. So it's nice that they have a story there, but I feel that it is a bit difficult to see how it's worth their time marketing along sports unless it is linked with something that is a needle mover because it's not not cheap to uh to sponsor sports like they do um on one of the things you you did was a fan fan survey with uh with you gov um tell me a bit about some of the findings that stood out for you uh in that survey which uh i thought was quite interesting yeah so and i'll tell you another another thing which has just you know come out on the on the athletic as a follow-up to the documentary.

13:08So the YouGov data, we commissioned a report from them and they're a UK research group. And they found that 9 % of the UK population had illegally streamed over the last six months. And that equates to 4.7 million people. And then on top of that, 9 % more said that they were either unsure or preferred not to say. so and that's fair enough and that and that does also reflect that there is you know there is amongst some people albeit the people i spoke to outside wembley were very forthcoming there will be some people that go i'm not quite sure whether i should be doing this and i'm not comfortable even conceding to someone even anonymously whether i'm doing it or not which is which is fair play but um in terms of what they found you know they they highlighted obviously the main reasons being cost and convenience and sometimes a little bit of a, as you mentioned before, you know, sort of sticking it to the man and not wanting to comply.

14:09I think that that's part of the reasons why not being able to, in particular, because this was a UK survey, not being able to access 3pm kickoffs is a big thing because of the blackout. And that's another sort of element that we do analyse. And I think that that's, you know, that's worth further discussion as well um but it just showed that there is such a huge amount of people doing it now as a follow-up to the um the documentary and in some of the articles that we ran sort of running alongside the the release of the documentary we we asked people if they wanted to take part in a survey from athletic subscribers and despite one of the first comments on on one of the articles saying, oh, we're not going to fall for that trap.

14:57And, you know, we don't want to take part in any survey. It was completely anonymous. I just want to point out, it was completely anonymous. Over 5 ,000 people took the survey, which is actually a really, you know, strong sample size. Exactly. And it gives it quite a lot of heft, actually. And the results are even more overwhelming than the YouGov poll. Now, look, we did actually feature in the initial documentary that there was another data set that we use from a global research firm called brand finance. And they'd highlighted that 44 % of users had considered or of the respondents had considered using illegal streams.

15:41Now, so we obviously asked the direct question to our subscribers and they came back with 47 % used illegal streams. And that's a huge amount. Now, I'll try and be balanced in this, but it was overwhelmingly towards illegal streaming. The main reason why people didn't was it was a moral position that they had taken. So I think that's worth considering. But 57 % of respondents, and this is over 5 ,000 people, said that they had been doing it for five years or more. So it does show that it's a relatively long-standing thing. The methods, again, the majority were using websites, which is 40%. Firesticks was 33%.

16:28And the main reasons, again, cost, ability to watch the 3 p.m. kickoffs, and the convenience, not having to have multiple subscriptions, just having one place that they can go. And, you know, it does, in the grand scheme of things, it does make a lot of sense. Let's be brutally honest about this. And one of the things that the industry obviously do, and there is obviously a lot of law enforcement information and a lot of research done behind this is what they try and do is just warn people of the dangers and the potential dangers out there. However, that message from what we learned in the documentary, we highlighted some of the messaging that they have, but we also highlighted the other side.

17:11Some of the messaging doesn't seem to be landing with audiences. So we asked, are you concerned about the risks of cybercrime? No, 73%. Are you worried about links with organized crime? No, 70%. So it just shows how difficult it is for this tanker to turn, you know, and for anything apart from changing the price point, making it more accessible, isn't going to change things. You know, that's the long and short of it. And then that leads you into the future and the coming crisis, I suppose. Absolutely. I mean, those results are fairly damning for the state of the situation, really. And you've seen what happened in the French Football League, which has got a lot of coverage.

18:04And a lot of that was linked with why DAZN had to pull out of that agreement, was that the state of piracy was much worse than they expected. And therefore, at that price point was, well, we're just going to go to find it in other ways. And now then, Lee Goon has launched a direct-to-consumer product, which is a much lower price point, which I do think is at a price point that probably makes people go, you know what? That's probably – that's palatable. I will – I can probably do that versus taking it and finding it through other means. Yeah. But – Well, on that point, just interestingly, on that point, and before you go on, because I think it's interesting to sort of analyze all those different elements of it.

18:41But I was out recently at Web Summit. I was speaking, we did a live podcast out there, and a guy from France responded to that point about Ligue 1 and said, yes, it is an attractive price point, yes. However, still within that, yeah, you get your Ligue 1 action. But if you support Paris Saint-Germain, you then have to get another subscription to watch Champions League, et cetera, et cetera. So the fragmentation argument is still there, even if you do find a solid price point for one of the competitions. Sorry to interrupt. No, but that is a great point because I hadn't really thought about the Champions League connection with Amazon Prime or Canal Plus or alike, but you need to have that as well.

19:21And I don't think the LFP approach solves everything. I think it just shows that there can be an uptake. But let's also look at the fact that I think the revenue number that they're expecting this year in terms of revenue generated from those media rights might be like 20 % of what they were making a few years ago. and the outlook to get to where they were from a revenue generation perspective, see, is very speculative at best. So that means that that's because you can look at the pay TV model and what this means in particular in the UK with Sky, especially probably the most impacted by this given the dominant force of owning those rights in the Premier League.

20:01It does feel like a huge revolution would need to happen for this to be ultimately resolved. However, then you look at it, at the moment as things stand today, Sky wouldn't have a lot of interest in, they don't necessarily want to have the more rights made available. So let's go to the 3pm blackout conversation a little bit. They don't necessarily want that removed because that means there's going to be more games available. More games being made available makes the rights that they've been buying less valuable ultimately because there'll be more saturation of games to the market. And they dominate the market.

20:35They have a mature subscriber base that will get limited value from having more games as part of their offering, I would theorize. So they probably aren't that excited about it. And then Premier League, they know this is happening, but they also know the most dominant investor in a single sports property in the world, in Sky, probably doesn't really want to see much movement happening there either because of the reasons I just shared. So I think Premier League's a bit of a rock and a hard place. They know this stuff's going on, but they don't want to bite the hand that fiends them. Yeah, I agree.

21:09And, you know, it's sort of a codependent relationship between the Premier League and Sky. And, you know, I was at Sky for a long time. I worked there for 16 years. And, you know, it was very much the case that you would, you know, be aware of, right, okay, well, when's the next right cycle coming up? What's going to happen? How is it changing? and it's been very interesting to see how the dynamic has changed. Obviously, competition came, BT were there. They then got Champions League and you thought, wow, is this really going to change? There's always been the looming threat of a big gun coming in.

21:45Obviously, Amazon sneaked in, popped their head in for a bit, popped out again. And now Sky have got a lot more games and they've been given a lot more games. And Richard Masters recently, speaking at Leaders, was saying, look, there are no more games that we can feasibly put outside of the 3pm blackout, 3pm kickoff time. And what interested me is just to sort of take a moment and go back to not only when the blackout was first brought in back in the 60s, then subsequently only really needed in the mid 80s. But when the Premier League started in 92, 93, there were 66 % of games on Saturday at 3pm.

22:26And then last season that dropped down to 33%. So it just shows that they've moved as many of the games outside of that as possible to make it more commercially viable. And going back to the point that you were saying about France and the sort of the financial redesign that has subsequently happened from ultimately a broadcast partnership crash is, yeah, you see the reality of what life is like without those huge swathes of money coming in. Now, look, the Premier League and Sky and any other broadcaster will be seeing what's on the other side. And it almost feels as if it doesn't have to be like France because that was almost a cliff edge, you know, what are we going to do from one month to the next?

23:15They can plan ahead far more prudently, I think, and just come up with maybe a better sort of partnership plan potentially, but where, you know, Sky could work with the Premier League more in a B2B rather than, you know, Sky being the B2C arm. You know, if the Premier League were to be the front of it all and have their own, you know, PremFlix platform, as is often coined, you know, they would have to basically take on a lot of the additional stuff that people don't see, you know, all the trucks, the cables, the broadcast side of things. And, and even which I found interesting, just in discussions that, you know, the Premier League, they don't have to provide any customer service to anyone at the moment, you know, and that is all done by the broadcaster.

24:06So that's quite a big consideration. And, you know, that's what Sky have have done for years and years and years, you know, they've, they've been the people sending out trucks to people's houses to put up satellite dishes, obviously, now that's moved on to, you services and stuff like that. So I just think there seems to be quite a long runway to the point that we get to a moment where consumers go, oh, that's actually a really nice proposition. But any more delay, and if it goes beyond 2029, and if we get another right cycle that takes us into the mid 2030s, you just think, well, hang on a minute.

24:40We know that the horse has bolted already. you need to grab hold of a rain or his hoof or something to stop it getting even further away otherwise it's gonna go and it's gonna be a very similar situation to you know the music industry but they yes that was a slow burn initially but they did act and they did change the environment yeah that's what's that's what has to happen it has to happen because you know people are getting now via illegal streams, what I would have thought if you offered a normal consumer the opportunity to have a nice platform where you could access everything at any time, they would go, well, I think that's really cool.

25:21Yes, I will pay a slight premium for that. It might not be as high as what people are paying per month now, but at the very least, they would go, well, our sort of wishes have been granted. And yeah, I will now actually start to engage in that. And I think that something like that has to happen because everyone's so, you know, consumers are so much more nimble now. They want what they want when they want it. And if you don't get it, then they'll find it. So, you know, that's why it's grown so much. Yeah, 100%. And I think one thing for us to really think about is we've seen for those following what's happening across media rights investment across the world.

26:00There's been huge revenue growth in the US, but one of the main traits of those US rights holders is most of their content is available through very mature or free-to-wear providers, accessible at no extra cost to established services. Whereas obviously in the UK and in Europe, there's still very much a pay TV legacy there that the economics of that is still holding it all together, but it is getting further and further strained. And you couple that with what's happened with the Premier League and other football leagues as well, with all the investment that's come in financially, there's more pressure than ever on every single team to be driving more revenue, more revenue to buy players, etc., etc.

26:44And that creates even more difficulties for a sport to change and evolve when there's so much riding on next year's paycheck and the state of the Ligue 1 and French football is in tatters and will be in tatters for some time for all these investors that have bought in at the peak of its media rights revenue. And there's no lie at the end of the tunnel where that return is ever going to come back to the fore. So I don't think there's a real solution here unless it is a real revolution in the way the broadcast is operating. And this 3pm blackout has to go in the UK especially. And when I was actually living in Jamaica for the listeners, the regular listeners to the podcast, I was there last year for a period.

27:26And I was asking, how do I get access to all the games that I want to be watching? And people were like, oh, the only way you can do it is get it off an illegal stream somewhere. You can't get the bulk of it because the local broadcaster didn't want to fork out the rights for all the games. And they thought just no one was able to watch it. So there's almost with that happening as well, and there's still the legacy of only selling, only giving access to the rights that are being bought, which is a prudent business approach until now. And you couple that with the low cost point to access content through social and YouTube and everything going on.

28:01I just think it's the only one way, and that has to be a complete revolution. I'm not even sure a PremFlix model where people can buy access at a low price point is still going to solve everything. No, I agree. I think, you know, as we were discussing before with Ligue 1 offering it, but then someone will always have a problem with it because they can't access something else. You need to at least have a starting point that starts to claw back some of those who have gone to illegal streams. So anyone that is accessing illegal streams because of the 3pm blackout, you offer them the alternative and you give them those games.

28:37Then you go, well, okay, well, what more do you want? And then, yes, okay, then it's maybe how do you actually join the forces of different governing bodies to offer one, you know, united product, for example, like everyone wants to, yeah, the World Cup is free to air. But if you wanted to watch Champions League games or Europa League games or whatever it is, that would need adjoining forces between, you know, UEFA and the Premier League or La Liga or whoever it would be, depending on where you lived. But what I think is really important is that, you know, you've mentioned a couple of times a revolution is needed.

29:11It needs someone in power in football to make a bold decision that is going to be for the benefit of the consumer rather than for the benefit of the shareholders or the interested parties within that league. And look, I'm not pointing the finger directly at Richard Masters or Alexander Shefferin for UEFA or whoever it would be. it's just about having to make that big call where you can be the guy that delivers something that you know full well is going to put smiles on people's faces at least you have at least you have made that step forward to say you know what we have to do something now and I think until someone actually is proactive in you know picking up the can rather than kicking it down the road then it's just going to lead to to more and more drift away and disconnection and and um dissatisfaction disenchantment all the disses they are dissing the model at the moment you know so it's i just think it's it needs that it needs that moment but the problem is the especially with the Premier League in particular, it's different with US leagues, NFL, for example, or even MLS.

30:40When you have a model where teams are fighting for their lives to stay in the division, to secure the finances that come from the central payments, it's never going to happen that turkeys are going to vote for Christmas. It's just not, that is not going to happen. Love that analogy. And yeah, I just think it's just one that it's so difficult to unpick. And there's no time to stop and go, you know what? We're just going to pause for a couple of seasons and we're going to sort all of this out. We're going to be able to recalibrate all our finances. You're going to be able to start to work out how much your wage is going to have to drop and et cetera, et cetera.