Free sites paying the price

By ADAM GIFFORD

Sports animation specialist Virtual Spectator chairman and chief executive Lindsay Fergusson rejects claims the collapse of high profile sports website creators Quokka shows the internet and sports content make bad teammates.

San Francisco-based Quokka, founded by Australian America's Cup winning sailor John Bertrand, laid off most of its 220 staff last Wednesday and prepared to file for bankruptcy.

Other US-based sports sites including Broadband Sports and Rivals.com recently shut up shop, and CBS SportsLine last week announced 60 jobs would go in an effort to cut costs.

Mr Fergusson said it was part of an inevitable industry shakeout.

"What it's saying is free web sites that depend on advertising and sponsorship for revenue are not making it," Mr Fergusson said.

"At the same time the major US sports organisations who control their own websites are now charging for things like audio feeds of games.

"The internet is moving away from the free model - just look at what happened with music fileswapping service Napster.

"Our business model always was subscription-based, we've never offered anything for free. When we started that looked revolutionary, but it's now mainstream," he said.

Mr Fergusson said that at a sports business conference he attended in London last week, "the consensus across a wide range of sports and media people was if there was good content, people will have to pay."

Quokka's business model was to form partnerships with organisations such as NBC, the International Olympics Committee and big league baseball to develop web sites, for which it would then attempt to sell advertising.

Virtual Spectator worked with Quokka during the America's Cup campaign, for which Quokka had website rights.

Quokka also built Golf.com, the Sydney Olympics site and was building the site for the 2002 Winter Olympics in Salt Lake City.

"We wouldn't touch the Olympics. A three-week event is not a sustainable business model," Mr Fergusson said.

"Virtual Spectator is not a website. We work on a revenue share basis with rights holders, whether they are media organisations or sports organisations, to add value to their digital data. We will not buy rights.

"Quokka was very much a mainstream free-to-air website, and it did it exceptionally well. Unfortunately with the economy down, sponsorship is harder to get and less people are willing to advertise." He said Virtual Spectator was still on target to break even in 2003, and efforts to raise additional capital were proceeding smoothly.

As well as yachting events, the company is working on plans to animate motorsports, golf and soccer.