Audiences are increasingly viewing video content on demand and online—but sport remains embedded in the linear TV experience, whether aggregating mass audiences on broadcast TV or underpinning the value proposition of subscription services. So how will sport—especially live sport—migrate online?
As the technical barriers to streaming live events at scale have been lowered, with advances in every part of the chain from capture to delivery via consumer broadband services, an increasing amount of major sports are being made available online.
Rights holders are exploring the opportunity offered by online to reach new audiences, to exploit a wider range of their properties, and to reach consumers viewing away from the TV set in the home.
Technology giants like Amazon, Google and Facebook are taking a larger role in sport and are now acquiring live rights to sporting events; but they have been selective and have shown no appetite to trigger a new round of rights inflation by bidding against entrenched linear TV players.
A new wave of direct-to-consumer services will not match the lucrative revenue streams derived from mainly linear rights licensing but, rather, serve as an enhancement for the most dedicated fans. They are also a crucial option for less mainstream sports unable to secure TV coverage, or replace low value TV deals.
- Moves to bring live sport online are gathering pace, with major rights holders, channel operators and pay TV providers and new online players launching direct-to-consumer offerings
- ESPN launched the standalone direct-to-consumer service ESPN+ in the US on 12 April, following Walt Disney Co’s takeover of BAMTech
- Formula One launched a new online product offering motorsport fans a chance to view races from the driver’s viewpoint. The Perform Group’s DAZN launched in Italy—its sixth country—after acquiring exclusive rights to Serie A football for the next three seasons, while Amazon and Facebook have both made inroads into the international market
- Advances in technology have made the delivery of live streams more feasible. Consumers are increasingly connected, viewing content at a time and a place of their choosing (also demonstrated by the existence of a thriving market for pirated online streams of live sport), while rights holders, rather than relying on licensing deals with third parties, are becoming aware of the opportunity to forge closer links with their fans and followers online
- The sheer size of the revenues rights holders are generating from pay TV is one factor slowing down the migration of sport online. Rights holders are wary of moving from a model of licensing rights to third party operators and risk ending what has been a golden era for them. For all its faults, the bundling method of selling channels to consumers is still one which enjoys widespread consumer acceptance
- While escalating pay TV rights have priced free TV out of the market for many major events, sport remains an important part of the free-to-air schedule. In the US, most NFL, NBA or MLB games are broadcast by the team’s local TV station, despite the near-total penetration of pay TV
- Specialist cable networks like ESPN and Discovery Inc’s Eurosport are those most exposed to a perfect storm of cord-cutting and rising rights costs. For cable channels, the move direct-to-consumer raises important questions on the business and content side
- Two of the ‘Big 3’ leading online video services in the western world, Amazon and YouTube, have adopted a cautious and opportunistic attitude to sport. Netflix itself has remained committed to other genres, with sports-related content being limited to documentaries rather than actual games
- DAZN, owned by the UK’s Perform Group (see box on page xx), is one of the few online-only players to have launched into the sports space. Other services like Eleven Sports, fuboTV and Sling TV have a foot in both the linear and online worlds
List of tables and charts:
- Key sports rights
- Pay TV sport package price per month, $
- Annual value of US TV rights deals
- Eurosport linear and online subscribers
- Live online-only streaming deals
- Subscribers to standalone OTT sports services
- Change in worldwide pay TV and broadband subscribers, 2022 vs 2017 (%)
- Sports content available on apps (Q1 2018)
- Online sports package pricing (annual, $)
- Connected devices installed by type, end 2017 (million)
- NFL: nationally televised matches per regular season (2017/18)
- Sky Sport package pricing (August 2018)
- DAZN launches
- NBA teams local TV deals
- US online subscription services offering streaming sport
- Selection of sports apps available on app stores, Q1 2018
Number of pages: 36
Number of tables and charts: 16
Director – Research and Analysis, Programming, IHS Markit
Mr. Tim Westcott is a director of research and analysis for Programming at IHS Markit.
Senior Research Analyst – Channels, Programming, IHS Markit
Mr. Matteo Marchello is a senior research analyst for Channels & Programming at IHS Markit.
Executive Director – Research and Analysis, IHS Markit
Mr. Dan Cryan is the executive director of Research and Analysis at IHS Markit and a thought leader in digital media coverage.