Untangling the cord: why Sky Sports is switching to single-sport channels

The UK's leading pay-TV broadcaster is reshaping its offering in response to dramatic changes in consumption.

Untangling the cord: why Sky Sports is switching to single-sport channels

UK pay-TV broadcaster Sky Sports has confirmed details of its repackaged offer to viewers, bringing in a series of standalone single-sport channels in response to dramatic changes to consumption of television and live sport.

From 18th July, the numbered Sky Sports channels that have defined its linear offering since the 1994 launch of Sky Sports 2 will disappear, while its pricing structure will also change significantly in a move which reflects the pressures on traditional operators from changing viewer habits. Two specialist channels will launch for soccer – Sky Sports Premier League will show 126 games from England's top flight each season, and Sky Sports Football will show coverage including the English Football League, Spain's La Liga and international fixtures – while individual channels will launch for cricket and golf to join the existing Sky Sports F1.

A range of sports will be carried on the Sky Sports Arena and Sky Sports Action channels, with Sky Sports Main Event reserved for the highest-profile coverage and Sky Sports Mix retained for non-sports subscribers.

Viewers will now be charged UK£18 a month for each individual channel, UK£22 for two, UK£26 for three or UK£27.50 for all ten, although that is on top of a subscription for the main Sky TV platform. The pricing for NowTV, the over-the-top (OTT) ‘skinny bundle’ service from Sky, has not yet been released. A monthly rolling NowTV subscription to Sky Sports is currently UK£33.99, with daily and weekly passes also available.

The relaunch also follows NBC's creation of the Premier League Pass, a US$50-a-year streaming platform that will carry 130 live games a season and will be available without a cable subscription.


From add-on to standalone

In an era of standalone subscription packages such as Netflix and Amazon Video, the market for high-end packages built on general entertainment offers appears to be shrinking steadily. In the US, the ‘cord-cutting’ phenomenon – where existing cable subscribers drop their subscriptions – and the rise of 'cord-nevers' – young adults from wealthier demographics who have no intention of ever paying for cable – has eaten deep into the customer base of premium sports channels. ESPN, for example, has lost 12 million subscribers from a peak of 100 million in 2011.

At the same time, viewing figures for live sport on linear channels is dropping. In the autumn of 2016, live TV audiences for both the Premier League in the UK and the National Football League (NFL) in the US fell appreciably year on year. Traditional broadcasters have taken this as a sign that they need to serve more of their audience on digital platforms - and do so before specialists like Amazon, which has been building out its sports executive team since last summer and will show NFL Thursday Night Football games this year, get serious about sports rights.

Sky Sports' response to this is markedly different from existing multi-sport OTT products such as DAZN - available in Germany, Austria, Switzerland and Japan - and Discovery's Eurosport Player, even if further steps may be taken to separate the sports channels from the general offering.


Thinking through a single-sport approach

Sky Sports intends to fill out the non-live portion of its programming with new original content, including documentaries and, in the case of Sky Sports Premier League, dedicated club days and nightly debate shows. It is also heralding new features in its mobile app, such as a live Premier League timeline with video, in a further reflection of the need to build a more interactive relationship with viewers and generate valuable data in the process.

Amazon, Netflix and similar services like Hulu may intend to offer sports rights as part of their existing entertainment and original programming platforms but they would also have the infrastructure in place to create season-pass style offerings for individual sports properties.

In addition, a number of rights holders have already been putting together comprehensive digital season-pass products for some time – most notably the US major leagues. According to Parks Associates, 16 per cent of US broadband households subscribe to an OTT sports service such as NFL Game Pass, NBA League Pass, and MLB.tv. Earlier this month, meanwhile, the National Football League (NFL) announced a new partnership with Bruin Sports Capital and WPP to help drive the growth of its NFL Game Pass in 61 European countries and territories.

If it can make a success of its dedicated channels, Sky Sports could present itself as the right platform for other rights holders considering the same approach. Tellingly, the launch of its new cricket channel comes just over a week after it confirmed a five-year renewal of its comprehensive rights partnership with the England and Wales Cricket Board (ECB), which it will pair with support for a grassroots strategy aimed at growing the fanbase of the game.

Sky Sports paid the lion's share of UK£1.1 billion for that deal – a smaller tranche of live TV, radio and digital clip rights was carved out for the publicly funded BBC – as it saw off competition from its main domestic rival, BT Sport. That is indicative of the other benefit of creating standalone channels for its premium sports offerings. Sky will long have had intelligence on which sports its viewers were subscribing to its platform to watch, but that correlation will now be easier to ascertain than ever before. With both Sky Sports and BT Sport gearing up for a battle over the next three-year package of live domestic Premier League rights - which went for a combined UK£5.136 billion in February 2015 - prioritising spend elsewhere has become a critical challenge.