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Over the past year we’ve been keeping track of the biggest trends in sports streaming on the StreamTime Podcast.
Ahead of the sixth instalment of the SportsPro OTT Summit, which takes place in Madrid from 29th November to 1st December, here are 15 things that keep coming up in the sports streaming conversation.
1. Goodbye subscriber numbers, hello profitability and time watched
Since the beginning of the streaming era, it’s all been about subscriber numbers and growth – and growth at any cost. But the game has changed: the stock market and investors are more critical, and with the growth of advertising in a key monetisation model measuring success is changing for all media businesses.
Two things are consistently being used to measure performance: path to profitability and time consumed. Whilst a metric like time consumed is more difficult than subscriber numbers to use as a benchmark against others, it does provide a clearer picture of content performance and audience engagement.
2. Sports OTT platforms are becoming ‘one-stop shops’
Standalone OTT platforms are hard enough to build and operate, but they’re even harder to monetise, or even just to hold audiences for significant periods of time. That’s why sports over-the-top (OTT) platforms need more, and as a result we’re seeing the layering of fan engagement, betting, fantasy sports, TikTok experiences, and other features in the bid to become a seven-days-a-week destination for fans, not just a place to watch the live match. Fifa and the National Basketball Association (NBA) are the latest to launch platforms tackling this. Expect a lot more of it to come.
𝗪𝗮𝘁𝗰𝗵 . 𝗦𝘁𝗿𝗲𝗮𝗺 . 𝗙𝗿𝗲𝗲
— FIFA.com (@FIFAcom) April 12, 2022
Introducing #FIFAPlus: your new home for football ✨
Watch or stream for free thousands of live matches per month, stories from your favourite footballers, and the biggest archive of World Cup matches 👉 https://t.co/EO11dasOum pic.twitter.com/h4vm0z3PqJ
3. The consolidation has begun
Over the first stage(s) of streaming, the market has been filled with new platforms looking to plant their flag into the sports OTT ecosystem, and with that win and maintain market share in a fast-moving industry. The problem: streaming adoption has not moved as fast as hoped and many of these businesses are losing a lot of money.
One way to solve that problem is to merge with a complementary business and pool your rights and resources to become a more efficient business. The example leading the way here is the Discovery and Warner Media merger, and then the ensuing acquisition of BT Sport, but they’re not the only one. DAZN Group acquiring the Eleven Group is another intriguing marriage that makes a lot of sense on paper. And then rumours are circling that Sky Deutschland is also on the market.
Both are still working through how they’ll fit all the pieces of the puzzle together, but whatever happens, it’s just the beginning for wider market activity.
4. Big Tech will continue to spend – Google’s come to the table
Last year I’d written off the big-spending moves of ‘Big Tech’ and the likelihood of any real waves being created in sports. We’d fallen into a fairly ‘same, same, but different’ situation, with the only difference being rights were being bought by the incumbents to spread across linear, cable and now streaming platforms.
Amazon was the exception, of course, given a few of the key moves they’ve made, including the much talked-about Thursday night deal with the National Football League (NFL). It’s otherwise been quiet for some time as many Big Tech firms had tried and failed (I’m looking at you Meta, Twitter and company).
Enter Apple. The iPhone maker made a small move for Major League Baseball (MLB) rights before securing its Major League Soccer (MLS) deal, which sent shockwaves through the industry due to its global nature and approach. It’s also regarded as heavy favourite for the NFL Sunday Ticket rights, with Google now rumoured to be in the running as a dark horse.
The question everyone’s asking (well I am, at least) is: why do they need to? Many think it’s a status move, more than a smart business move aiming to add significant value to their bottom line. But one thing is for sure, the big boys are now circling sports and want more.
We’ve been talking about ‘#BigTech‘ throwing huge capital at sports for access to what was (and still is in some circumstances) the holy grail that is Live Sports.
— Nick Meacham (@SportsProNick) October 10, 2022
For years, nothing really happened. Many in the industry incl. myself wrote off this concept- Until now:
🧵👇
🔊 pic.twitter.com/ZamAm7rfj9
5. Betting will not ‘fund the gap’
Betting was supposed to be the great game changer and average revenue per user (ARPU) driver. But there are several problems: it’s not cheap to run a betting business, it’s not easy to get licenses, the margins are poor, the majority of fans don’t want to bet, and they don’t need it to be fully integrated into their live sports experience. Some do, and some will love it, but it’s never going to be at the scale many hoped.
That’s why platforms like Fubo TV are already pulling the plug on their sportsbooks and DAZN’s chief executive Shay Segev, a former betting executive, has confirmed this is additive and not a transformational component of its service.
Rather than doing it alone, integrating third-party betting partners will be the key as they can generate meaningful returns from the marketing exposure alone before looking at what returns they can generate through a centralised experience. ESPN is likely to set the industry standard as and when they commit to a partner.
6. Web 3.0 won’t play that big a role – yet
The Web 3.0 hype train has slowed down somewhat, as have crypto markets. This has caused the values of non-fungible tokens (NFTs) and cryptocurrencies to plummet. The hope among many sports properties was that Web 3.0-powered solutions, like NFTs, would have a similar impact to what they hoped betting would have for owned and operated platforms. Neither have worked in the way they hoped, and most of the money being generated isn’t through their own platforms, but instead through licensing deals with partner sites.
Web3 could play a role, but it’s not going to be the money-spinner or the major driver of ongoing engagement on owned and operated platforms – at least not yet.
7. Sport will solve its streaming problems thanks to Big Tech
When Amazon launched in the UK with the Premier League, it was met with industry-wide plaudits for its seamless launch and experience. Its recent NFL Thursday night debut, however, showed that it’s still really hard to deliver live sports at scale. For perspective, not only does Amazon have a financial war chest unseen for this type of rollout, but it has been streaming for years and is powered by the world’s leading cloud provider in AWS.
With Apple now joining the party alongside Amazon, Google’s YouTube still very much a player and cloud providers being linked to the biggest companies in this space, who better to work out how to (finally) fix the problems that all streaming platforms have when going live and at scale for the first time? Over to you, Big Tech.
Could Big Tech be the key to solving sport’s streaming issues?
8. Ecommerce could be the key, and social is coming with the big answers
YouTube and TikTok’s role in sport continues to grow, and they’re both rolling out smart ecommerce solutions that allow more efficient cross-sell opportunities for users to things like ticketing and merchandise. And, best of all, they’re doing it now with sport in mind.
Ecommerce isn’t new, and it’s not new to social media, but being able to specialise that offering to sport has taken time. If sports can start driving more direct value out of social media and their non-premium content than just scaled audiences, then expect to see even further investment in content curation and community building. And just wait until Amazon nails that user journey.
9. It turns out Amazon isn’t a must-have partner for sports – yet
Amazon was the sexy brand everyone wanted bidding for their rights. What an incredible partner to have behind you – an all-world company with incredible technology and distribution. But its Achilles heel is a big one: a real lack of discoverability and a dearth of shoulder programming and daily content to keep audiences wanting more. This has led to them losing out on potential sports rights despite being the highest bidder.
Sports understand the value of being part of the conversation and Amazon can’t help with that – yet. Light is at the end of the tunnel as it has recently announced the goal of creating daily and magazine programming to complement its live product. Time will tell if it can solve this problem and become a full-time destination for sports fans.
10. Connected TVs are increasing their influence on sports FAST
Free Ad Supported Television (FAST) is all the talk across the streaming industry and with good reason. It’s as close to the linear TV experience as anything out there, and that fared pretty well until now.
Sport’s place in this ecosystem is still in its infancy, however, and there’s next to no premium live sports available on the traditional FAST channels. We are nevertheless seeing more and more rights holders coming into the space, using unsold inventory and highlights to throw into the programming mix, so we’ll start to see how effective FAST is sooner rather than later.
The problem to be overcome is discoverability and the very limited real estate available. Connected TV operators, those operating the majority of FAST channel ecosystems out there, aren’t allowing unlimited channels on their platforms, meaning if you want a place, you’re going to have to buy your way in somehow.
11. Broadcasters are still playing a traditional game
Every broadcast platform I’ve spoken to is still running a version of the subscription or advertising model, or a hybrid of the two, and are built around monthly subscriptions and bundling. It’s business as usual around modelling with a greater focus on driving efficiencies.
Very few are looking for that extra layer of consumer engagement, ecommerce or ARPU enhancement in the same way sports-specific platforms are. So are sports leading the innovation curve here, or are broadcasters just smarter than sports at knowing what works and what doesn’t?
12. The financial gap for tier one to tier two sports rights is widening
Tier one sports rights are still the holy grail. Across the US values continue to skyrocket. Conversely in Europe, media rights have stayed flat. Why? It’s likely something to do with the speed of streaming adoption and the need for audience acquisition.
Whichever market you look at, top-tier traditional sports are taking a larger piece of the sports rights pie. The knock-on effect is that there’s less money in the kitty for everyone else. That’s where OTT, FAST, social, owned and operated platforms, and ecommerce will all play an ever-increasing role in developing audiences and driving revenue growth.
Lower-tier sports cannot simply follow the same models as the traditional powerhouses. The quicker your sport accepts that it’s not going to be able to build a business model mirroring the top-tier incumbents, the quicker you’ll be able to find a model that suits your organisation, one that will set you up to build a sustainable business model for the longer term.
13. Lean in vs lean back
Sports broadcasters and platforms are coming to terms with the fact that not every fan wants an interactive experience. In fact, most are happy to sit back and consume sports casually, with an occasional indulgence on social media to fill their needs.
This has shifted the focus to ensure a greater level of personalisation, while the rollout of lean-in experiences is also hampered by the technological limitations of connected TVs. But that will come over time. Whatever the case may be, not everyone wants or needs a lean-in experience and that’s okay.
Some fans are still happy to lean back and consume sports casually
14. Does ultra-low latency really matter to audiences?
It’s still causing a huge industry debate: do fans care about the latency of their live streams? Well, the easy answer is: it depends. Or perhaps: as long as it doesn’t impact their baseline viewing experience.
If ultra-low latency is rolled out successfully, it will make a huge difference to viewing experiences as data, betting and fan engagement experiences will be more seamlessly integrated. For now, though, most fans don’t actually know what they’re missing.
15. Documentary series overload
Thanks, Drive to Survive! Now every streaming platform and sports property has a bank of documentary-style content to help tell the story of their sports and athletes. Drive to Survive is a great show which has had a transformative effect on F1’s audiences, but its timing was also crucial. There were limited options in this space when it launched, allowing the show to gain huge traction. Now jump on any platform and there are countless documentary films and shows available. And a lot more to come, with Box to Box, the Drive to Survive producers, signing up with a bunch of sports properties to roll out their own versions.
The chance of standing out in this over-supply of shows is near-on impossible, meaning its purpose will be more suited to providing value to the existing fanbase more than reaching mass new audiences like Drive to Survive did for Formula One. Expectations, and investment, will need to be managed.
