The globalisation of sports and digitisation of fan bases means that even the most successful rights owners are not immune to the competition for audience share. Adrian Pennington reports
The shift in viewing to digital platforms is impacting sport just as other content segments, but only a fool would suggest that they have nailed the business model.
“Companies are making different bets, seeing what works and what doesn’t,” says Tom Thirlwall, CEO at digital network Bigballs Media. “They are seeking to connect with a young and mobile-centric audience and, frankly, trying to work out where their business model is going to be in ten year’s time.”
The bets in play vary according to territory, sport and the legacy business models with sports and sport media has gone to market. The picture is also incredibly complex with traditional media competing and collaborating with digital platforms.
“It’s not black and white in terms of old versus new where one dies for the other to survive,” says Thirlwall. “What we’ve seen is the emergence of a blended revenue model in which major media organisations are working more and more with punks and pirates like us. It’s not their model to appeal to a young audience in the way we do.”
While eyeballs have been shifting to digital platforms such as Facebook and YouTube, television continues to be the dominant viewing experience for major live sports and the money continues to be with FTA and pay-TV broadcasters.
This is a far more mature advertising and payments ecosystem than that of digital platforms, for which video remains in its infancy. However, recent deals such as Amazon’s partnership with NFL and emerging opportunities for commercialisation of in-stream video on platforms such as Facebook and Twitter suggest this is now changing.
It’s also important to recognise the growing competition for audience, viewing and engagement. According to Gareth Capon, CEO at live video streaming specialist Grabyo: “Sports fans face a myriad of distractions and while commercial opportunities are still developing, it’s critical for rights owners to build their presence on social platforms to help maintain loyal audiences, support tune-in and provide a content experience which meets the needs of viewers who watch much less linear TV.”
Direct to consumer possibilities
The direct-to-consumer possibilities opened up by OTT platforms, however, mean a sports media company needs either tremendous content breadth that appeals to all consumers in a household or to serve a specific audience in tremendous depth.
In the former category are networks like DAZN, launched by media group Perform last year as the self-proclaimed Netflix of sport. It aggregates rights (rugby, American football and the European football leagues) and streams direct to fans in multiple territories.
In the latter camp are sports like Major League Baseball (MLB), National Basketball Association (NBA) and World Wrestling Entertainment (WWE) which been able to leverage the rights available to them to create successful SVOD products.
Subscribers to World Wrestling’s WWE Network pay USD$10 a month to view live and on-demand archive bouts and with more than 1 million subs only ranks behind Netflix, Amazon Prime, Hulu and MLB.tv, according to a 2016 report from Parks Associates.
“However, this remains only a small percentage of the total audience watching on TV and an even smaller fraction of their vast fanbase on social platforms,” notes Capon.
MLB have also developed a separate technology business, BAMTech, which provides OTT services for third parties and is an owner of media rights for the NHL. This combination of technical expertise and rights ownership had enabled the MLB and BAMTech to build a suite of new digital products for NHL fans which maximise the value of their rights and provide a more immersive digital experience for fans.
The AELTC (Wimbledon Championships) have also shown leadership in this space by retaining a portion of their digital rights for their own digital and social platforms. The AELTC uses video to achieve its objective of growing the sport on a global basis, while continuing to promote the linear broadcasters covering the event. The combination of live streams to social platforms, real-time highlights and sponsored videos provides access to content from the Championships which may not be available on linear TV while protecting the value of the media rights focused on the live matches.
One of the commercial broadcasters with which AELTC has done a deal is Eurosport, owned by Discovery Communications. It hired the BBC’s former digital director, Ralph Rivera, to creating digital communities for ‘super-fans’ around its key properties – which included the tennis majors and European rights to four editions of the Olympics from 2018.
Rather than airing the same video feed across territories with localised commentary as per its traditional, Discovery is using digital to segment different editorial and monetisation opportunities, such as a season pass for cycling. To add yet more overlap and complexity to the picture, Discovery is doing this in partnership with BAMTech.
“We not only have the ability to super-serve existing fans but also to expand the audience with the use of personalization technologies and data-driven programming decisions,” BAMTech CEO Michael Paull told the NAB show in April. “To be able to understand what people enjoy, it’s not just ‘what do they watch, but how long are they watching it and are they coming back to watch similar things.’ We actually have real data, as opposed to sample data.”
Not uncoincidentally, Paull was until recently the head of Amazon’s curated SVOD service Amazon Channels.
Super-serving fans, he explained, was about offering content like expanded highlights, bonus content, condensed games, replays – on-demand.
Niche sport opportunity
For niche sports that don’t have a broadcast window, live streaming is hugely attractive as it provides the opportunity to leverage the viral nature of social platforms to find an audience. Facebook Live also has attractive options for commercialisation, such as the opportunity for brands to sponsor streams or highlights clips.
“Facebook Live is a hugely powerful distribution channel and it’s helping niche sports generate very significant audience as well as build out their global fan bases,” says Capon, citing the recent deal between the World Surfing League (WSL) and Facebook.
WSL events are problematic for TV scheduling as they go on for a long time and can start at any time of the day (depending on weather and the waves). Facebook offers WSL fans the opportunity to be notified as soon as the event is starting, building a new audience for surfing alongside those already watching on the WSL website and mobile apps.
“This partnership model is symbiotic for Facebook and the rights holder - the WSL gets new fans and Facebook gets professional quality live sports for its platform and users,” says Capon.
Mobile audiences reside on social platforms rather than operator owned platforms and apps so the best option is for operator-sponsored distribution across one or more of them. Moreover, the major social platforms have hundreds of millions, often billions, of users logging in every day which provides an opportunity for reach and direct access which is not viable on a rights holder’s owned and operated digital estate.
“The challenge for many rights holders is the lack of user data available for their social audience, which is aggregated rather than provided on an individual basis,” says Capon. “Yet these platforms may be the first point of exposure for a new audience to any given sport.”
Cable giant Liberty Media and Time Warner-owned Turner are stakeholders in BigBalls whose chief brand is the football-focussed channel Copa90. It attracted 65 million unique viewers in April and is on track to top 100 million a month by the end of the year, rivalling the lead of Disney-owned sports giant ESPN.
Remarkably, BigBalls has achieved this without any live rights. Instead, it offers features and commentary about football – 90 percent of which it produces in-house.
“We’ve proved that it’s not all about rights but about the context and rich narrative outside of the packaged match action,” says Thirlwall.
It’s not just big media which is hedging its bets. Unwilling to consign the lucrative TV rights sales model to history, Europe’s leading soccer clubs and leagues are seeking to learn lessons from the digital space. A number of them including Liverpool FC, Barcelona and Bayern Munich along with star players like Gareth Bale, are stakeholders in Dugout an ad-supported soccer-focussed online publisher.
Like Copa90 it does not have live rights but offers exclusive behind the scenes content from clubs and stars.
“All the teams are willing to create branded content in collaboration or individually,” says co-founder Elliot Richardson. “Dugout can become a central point for branded content. We can create geo-specific and group targeted content.”
In some senses the site would seem to compete with Facebook – but Richardson says part of its attraction is that every piece of social media distributed by its publisher-members also appears on Dugout.
“It creates quantity but we also use algorithms so that some of the content which doesn’t get seen on other platforms gets surfaced,” he says.
Richardson saw a less ‘tribal’ fan emerging throughout global football. His research points to fans now following an average of 4.6 teams. For example, Barcelona and Real Madrid are the seventh and eight most supported teams in the UK. “I was astonished at how dramatically lacking football clubs were in quality data to better engage their fanbase.”
Mobile operator opportunity
Mobile operators are major sponsors of premium sports content such as football, rugby and Formula 1 and this provides an opportunity to leverage these partnerships for new types of viewing. Many operators have built large communities of fans on social platforms - Vodafone UK, for example, already has nearly a million fans on its Facebook page.
“This is a great starting point for streaming sponsored match footage or even training sessions and behind the scenes sports content,” says Capon. “Recent developments in VR, and AR in particular, also offer operators an opportunity to leverage sports partnerships to showcase what viewing may look like in the future - this also reinforces the connection between people - customers.”
Grabyo is spies an increase in new business models for OTT and mobile-only viewing for sports. One such is the BT Sport deal for EE (UK) customers that enables EE subscribers to watch BT Sport for free on mobile as part of their mobile subscription. Meanwhile, Verizon in the US created their own mobile-only OTT service, go90, for subscribers which provided access to sports video rights including the NFL and beIN Sports USA.
Primetime boxing has been a declining property on TV for the last decade, particularly in the heavyweight division, and has one of the oldest average TV audience demographics of any major sport. Despite this, the Anthony Joshua v Wladimir Klitschko world title fight in May was one of the most successful boxing matches of recent times and was watched by millions of younger fans on a range of digital platforms - many viewing streams illegally as pirated content.
“As the music industry has shown, with the right commercial model and service offering the potential is there to move pirates into paying customers,” advises Capon. “This is what sports and the TV industry need to figure out.”