The Future Of Live Sport Is Already Here, It’s Just Not Widely Distributed Yet
Live sport has always been magnetic to brands. One of my favourite memories of 1990s All Ireland Final day, as a long suffering Wexford supporter, was the half time spot buys for prestigious products like 10-10-20 fertiliser and ‘Triple A Golden Maverick’, (the leading brand of calf milk replacers in Ireland, if you’re not familiar). The mixture of high ratings, an engaged viewership and the intensity of a big sporting occasion attracted these fairly niche brands to spend big on Ireland’s equivalent of a Super Bowl ad.
It seems a long time ago now, and just like the advertisers change, so too does the live sport landscape.
A good indication of how quick this change happens is how blasé and unmoved we’ve become around huge sport media stories.
Recently, it was revealed that Facebook, Twitter and Snap are reported to be trying to buy the online rights to video highlights from the 2018 FIFA World Cup tournament.
Just a few short years ago, learning that a social network was bidding millions for rights to the biggest event on the planet would’ve been unheard of. In any other era it would be huge news, a snapshot of the shifting of sports media from traditional, linear and live to a new paradigm.
And yet, last week it barely raised a few column inches. We’ve become numb to these monster stories because they’re increasingly frequent. Amazon and Twitter are fighting over live NFL rights, Facebook is live streaming everything from Major League Baseball to La Liga and Twitch is attracting hundreds of millions of viewers for e-sports events. Something big is stirring.
The last round of rights negotiation for two of the world’s biggest leagues resulted in record deals. In the UK, BT and Sky shared a £5 billion Premiership broadcast deal, while from 2014-2022, CBS, NBC, Fox and ESPN will pay $39.6 billion for NFL same broadcast rights.
The logic here is that with increased cable cutting and competition, along with more OTT internet services coming to market (Netflix, HBO, Amazon, Now TV), live sport is the one of the last big guarantees in media. It has long seemed an impregnable category of entertainment. Live games remain a key reason millions of subscribers continue paying for hefty cable bundles. Because what fan wants to miss their team playing in the big game or have to wait for highlights a few hours afterwards?
Broadcasters benefit from a large, captive audience of sports fans to sell advertising to, plus the value of SKY, BT and ESPN to attract bundle subscribers is disproportionate. For example, ESPN is by far the most expensive US cable channel, commanding more than $6 from cable providers for every one of its subscribers (of which it has about 100 million).
But as Mr Dylan once said, the times, they are a changin’.
According to a repeatedly referenced, and dubiously researched paper from Microsoft, the average human attention span has fallen below that of a goldfish.
Whether you believe that or not (and it does sound scientifically unsound), it’s certainly the case that with increased entertainment choice our patience to watch 90 minutes of a football game isn’t what it was. A generation of consumers have been weaned on bitesize, short video delivered through some sort of social feed. We second screen constantly (*particularly* during live sport) and spend more time arguing on Twitter with fans of the opposing team than watching the game.
Partly as a result, viewership is falling. In 2017, Sky TV reportedly saw the biggest drop in Premier League viewing for at least seven years, with average viewing on Sky’s live TV channels falling 14 per cent in one season. Something similar is occurring in the US. In November 2016 Nielsen announced the worst monthly subscriber loss in the history of ESPN's existence, down 621,000 subscribers. One estimate has ESPN down roughly 15 million subscribers in the past five years alone. Like Sky, the changes are having an impact far beyond, since sport is so important to the wider pay TV landscape.
It’s said that attention is the oil of the internet era - a commodity to covet and monetise. So where is live sport’s attention going? And how can it be retained? That’s complicated.
Illegal live streaming is certainly one beneficiary. The Premier League is desperately trying to stop people from illegal streaming. Britain’s top four broadband providers have been ordered to block connections to the servers that host pirated streams of games. And yet, a quick search on any Saturday afternoon during football season will bring up literally thousands of options. It might be grainy, with Arabic commentary, but it’s free.
Secondly, younger viewers – born into a world where social media and on-demand services such as Netflix and Amazon are the norm – are watching sports in a different way. Capturing younger viewers is proving difficult. The rise of UFC is an example of ‘highlights driven sport’, where the big knockout or big play is the thing to watch. Similarly NFL’s RedZone offers the chance to watch only touchdowns, because why bother with all that build-up nonsense? That may be trite, but there’s plenty of truth to it. Companies like Copa 90 have begun offering more authentic, bitesize, immediate live sports coverage in opposition to Sky, BT and ESPN’s overly polished approach. Their CEO’s reasoning is illuminating:
“People want tiny, digestible snack viewing. They want goals as gifs immediately, they want smartly put together highlights in an instant in places where they can find them. It is just less about the full 90-minute viewing experience then it has been.”
And the other reason is simple economics – there’s just too much low cost or free stuff out there to warrant spending hard earned cash on an expensive subscription.
Combine these factors with hunger from social platforms for immediate, live content, and you get a perfect storm. The legacy sports-media ecosystem is more unstable than it has ever been.
The leagues and broadcasters haven’t been slow to respond. The Premier League is rumoured to be planning a direct live streaming approach, set to be trialled in smaller Asian markets. The NFL is set to do likewise and MLB’s ‘Advanced Media’ is an incredible successful direct to consumer platform. ESPN is already embracing the skinny bundle, and is available on OTT services like Dish’s Sling TV. Sky too have launched NOW TV, allowing fans to purchase low cost day/week/month passes for streaming sports channels. Only last week, Sky announced a re-shuffling of its channels into sport specific verticals, meaning fans of golf don’t need to pay extra for live rugby that they never watch.
Like any brand, growth comes from mass mental and physical availability so trialling new delivery systems makes sense. Super fans will always pay high prices for live sport. That goes without saying, but not everyone is born a super fan. Franchises also need to attract the ‘fairweather’ fans to grow revenue. And if your content is hidden behind paywalls with slowly declining subscriber bases, growth is more difficult.
For advertisers and media buyers, live sport will continue to be attractive – it currently makes up 35% of US TV advertising spend. And there will always be an opportunity to pay to place your brand around live sport. But change is inevitable. What that advertising buy looks like in 10 years time is anyone’s guess. The next round of rights negotiations could see some unfamiliar faces at the table, including Zuckerberg, Bezos, Pichai, Dorsey and co.
To bastardise a famous old quote about technology, ‘the future of sports media is already here, it’s just not widely distributed yet’. One of a number of delivery models could become the dominant way we consume live sport.
It seems that in this incredibly lucrative, high stakes game, it’s not even half time yet.
Image sourced from Flickr under Creative Commons License via Sean MacEntee