Streaming platforms run significant risks from sub-standard broadcast quality
Players such as Facebook, YouTube and Amazon have become increasingly aggressive in bidding for sports media rights, seeing them as an excellent way to connect with ardent, but underserved fans while growing revenue for other parts of their businesses. This is particularly true for live broadcasts of sporting events, where instant access is seen as providing premium value. However, in the UK and other territories they face legal scrutiny when their digital content delivery is not up to the standards that consumers expect.
In recent years social platforms have become major bidders for sports rights, as evidenced by Facebook's recent £200m deal for exclusive rights to broadcast live Premier League matches in south-east Asia. These deals are viewer driven, and demonstrate a willingness on the part of rights holders to adapt to new viewing habits by engaging with other than traditional broadcasters.
To offset these large rights fees, social platforms will naturally seek to monetise their viewership more expansively than the traditional advertising model that has been the staple of traditional broadcasters for decades. Amazon's goal can easily be seen as driving additional Amazon Prime subscriptions, which will almost certainly justify the high customer acquisition costs that its rights payments represent.
When broadcast quality on social media platforms is good than there are no issues but as we saw last August with Amazon's stream of US Open tennis (https://www.thedrum.com/news/2018/08/30/amazon-closes-down-criticism-us-open-coverage-amid-fan-revolt), streaming technology is still glitchy and many consumers experienced very bad picture quality and outages on the Amazon platform.
This is why these platforms should tread carefully when broadcasting content online in anything but very high quality, as certain payments by consumers on those platforms could create liability for the platform under the Consumer Rights Act 2015 (CRA) if clients do not receive digital content of a quality they expected. The CRA is likely to apply if viewers are: i) charged for access on a pay per play basis, ii) provided with access in exchange for vouchers, gift cards or a token purchased for money, or iii) charged for access as part of a bundle with other paid for items. This would almost certainly capture those Amazon users who paid for a Prime subscription in order to watch the US Open or other content, but could also apply to content that is viewable in exchange for watching an advertisement or other marketing content.
If the CRA does apply, the platform must be careful to ensure that:
a) that the transmission is of satisfactory quality (e.g. secure and free from minor defects);
b) that the transmission is fit for a particular purpose (if the consumer has made this known);
c) that the transmission is as described and matches any samples provided online; and
d) that the platform has the right to supply the transmission.
Platforms will also be liable for any damage to consumer devices or other digital content if they operated without reasonable care and skill. This liability arises regardless of whether consideration received for the transmission was monetary or not. If any transmission failures are down to the consumer, then the platform is off the hook. However, if the failure is down to the platform or a party over which it has contractual control (arguably including the rights holder), then the platform will be liable.
It is clear that platforms should take heed of this legislation and carefully consider the risk associated with any broadcasts where there is monetary consideration provided by the consumer. It will be particularly important not to make any representations about the quality of any transmissions online, and platforms should be careful to ensure that any liability arising from consumer legislation is covered off in any third party contracts. As long as these risks can be managed, then of course, it's game on for a very exciting innovation in live sports broadcasting.