• by Doug Chavez , Columnist, May 14, 2015

Like millions of people, I watched the Floyd Mayweather vs. Manny Pacquiao fight. And like many of the other people I watched it with and talked to afterward, I wanted my money back. The bout was touted as the “fight of the century” but was very much a snoozer. The big knock-out was how the fight performed for PPV broadcast companies and a couple of recently launched live-streaming apps.

First, I will say "well done" to the Showtime and HBO marketing teams; the marketing for the bout certainly worked on me. Until this event, I had never paid to see a fight and yet somehow I plunked down $100 to watch this “fight of the century” and threw a watching party. I wasn’t alone. The PPV buys were a knock-out for Showtime and HBO, generating 4.4 million buys and bringing in more than $400 million. For perspective, the PPV forecast was for 3 - 3.8 million buys, which was well above the previous record (also a Mayweather fight) of 2.48 million. Adding in ticket sales and other revenue streams, the fight brought in over $500 million. To put things in perspective, the revenue produced for this 12-round, 36-minute event bested revenue generated by the Super Bowl.

Although I paid the admission, it turns out that a lot of people were virtually peering over the fence and watched the fight for free via live-streaming apps Periscope and Meerkat. I recently wrote about these newly launched apps. In that post, I quipped about Periscope being 10 feet from stardom. I had no idea how prophetic that statement would be weeks later, given that these apps were turning out to be the stars of the fight, with thousands of live streams around the globe. Some observers have cited Periscope with nearly 10,000 live streams. 

Should broadcasters and content producers be concerned about this? You bet. With thousands of live steams going, the copyright owners of the content are losing a lot of revenue. It reminds me of the battle the Chicago Cubs have with roof deck owners across the street charging admission for a Cubs game. In fact, Twitter CEO Dick Costolo, (Twitter owns Periscope) bragged that Periscope won the night. While probably true (since the fight was incredibly underwhelming), it also begs the question about copyright infringement and piracy. 

Tech companies protect their intellectual property, such as source code and algorithms, and even patent them. Entertainment companies, broadcast networks and sports leagues own the copyright to live events. Just think back to the giant FBI warning you see before watching a DVD or the announcement you hear before and after watching NFL football on TV. Live-event broadcasts and re-transmissions of live events are valuable, revenue-producing content. While the advent of these steaming apps has created a new way for people to share great content, it has also created a new way to pirate content as well as a new wrinkle for copyright laws. The Mayweather-Pacquiao fight just happens to be the first round in what is sure to go many rounds with a lot of technical judgments from lawyers in each corner. 

We all know that advertisers follow audience eyeballs. And these live-steaming apps are proving they have the eyeballs, albeit not all legitimate. Periscope and Meerkat will have to walk a fine line with ad placements and sponsorships, since advertisers will need to be protected from any liability resulting from their message being adjacent to pirated or otherwise illegally accessed broadcast content. Although I’m a fan of testing early, this is one time advertisers will need to be much more cautious about testing new platforms.