FOXTEL'S chief executive, Kim Williams, loves to tell his staff ''let the trend be your friend'' and part of the strategy behind pay TV's punt on AFL rights is to befriend the web trend which threatens the way television operates.
Foxtel paid about half the $1.25 billion the AFL won for five years of rights. Included in Foxtel's package is the right to show AFL games live over internet television, or IPTV. Telstra bought the right to show one game a week over its service, the T-Box.
It may be a minority practice now but as televisions are increasingly connected to the internet, whether directly or through other devices such as Foxtel's iQ recorder, Seven's TiVo service, Telstra's T-Box or Microsoft's Xbox and Sony's Playstation, the IPTV rights will grow in importance and value.
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Once programs broadcast on TV and those shown via the internet are combined on the same screen, it will not make a difference to a viewer whether the program comes through the air or over the internet. When it is easy to flick between popular programs and sport on broadcast channels or on internet ones, the entire basis of the television industry is challenged.
American networks already put their programs on the video-on-demand service Hulu, which is not yet available in Australia. The BBC will soon make a version of its iPlayer application open to international viewers.
A pilot BBC application for the iPad will initially test demand, charging about $10 a month to watch new and old programs made by the BBC and other British broadcasters as soon as they are available, rather than waiting for them to be screened on traditional home of the Beeb's programs here, the ABC.
The ABC managing director, Mark Scott, said this week: ''There will be any opportunity for old-style networks to be bypassed as the content and audience are linked through fast broadband. The models that remained for 50 years are now quite challenged.''
In the case of the AFL deal, Seven has bought the rights to show live AFL on free TV. Fox Sports will show all games on pay TV simultaneously, except for the grand final. Telstra has the right to show live games and replays on mobile phones - which includes the tablet market.
Foxtel has the bulk of live IPTV rights - it will show games via the Xbox or T-Box and charge for them from the time the new agreement starts next year - and given the combination of the forthcoming national broadband network with falling costs of unlimited home internet packages, the potential of IPTV is massive.
Peter Campbell, the Foxtel director of sport, said IPTV was becoming more important to customers. ''They want live sport across multiple devices and that is what we will offer.''
The federal government is overhauling regulations governing all media in its ''convergence review'', which has only begun to look at how it can bring the rules into an internet age, where what can be shown by broadcasters or telecommunication companies is not limited by technology, but only by commercial contracts.
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