Think for a second. How many over-the-top (OTT) services do you currently subscribe to? How many do you watch regularly? How many would you truly miss if they were gone? These are some of the questions that many consumers will be asking themselves in the weeks and months to come as the cost of living rises in many parts of the world.
The story of streaming so far has been one of growth, with many players willing to spend vast sums and incur significant losses in order to get as many subscribers on the books as possible. Aggressive pricing and a lockdown that meant many people were spending more time at home helped boost user bases.
But with the price of food, energy, and other essentials going up, many households will look to trim budgets, and entertainment is an area people are prepared to cut back on. The number of UK homes that have at least one paid-for subscription service fell by 215,000 in the first quarter, with Netflix, Amazon, and Disney+ all witnessing churn during the three-month period.
Globally, Netflix lost 200,000 subscribers in the past three months and expects to shed a further two million in the next quarter. Given the company’s status as a poster child of an entire industry, the figures did more than ruffle a few feathers given its success has encouraged countless others to try their hand at going direct-to-consumer (DTC).
Some of the factors behind the decline are temporary, but it was also obvious that Netflix would eventually have to face the realities of market saturation.
F1: DRIVE TO SURVIVE returns, 11 March. 🏁🏁🏁 pic.twitter.com/Qe6zN1DOyZ— Netflix UK & Ireland (@NetflixUK) February 16, 2022
There are only so many new households to target and only so many new territories the company can move into. Password sharing also limits the remaining addressable market unless some policy changes are enacted.
The advent of streaming has resulted in unprecedented choice and volume of content and the freedom to create personalised bundles. But people only have so much time and money they can invest in entertainment – and this includes sport. This flexibility means consumers can now prioritise what matters most to them and some platforms could be in for a shock if their customers are brutal.
Whenever a new sports DTC streaming service goes live or if a major OTT platform acquires sports rights, we question which audience is being served and where it fits in a market filled with options. As you might expect, executives usually respond with an unshakeable belief in their product’s prospects. The next few months could test that belief if sport follows wider market trends.
But sport is prized among broadcasters because of its ability to bring in viewers and subscribers. Sport commands loyalty and there are precious few substitute goods for certain competitions. A fan of comedy might lament the loss of The Office from Netflix but be equally satisfied by other sitcoms. However, a supporter of Manchester United will hardly see LaLiga as an adequate replacement for the Premier League. Similarly, a viewer might decide they can handle watching a movie a little later in the year but won’t be willing to miss live coverage of Wimbledon.
Netflix’s growth journey has seen it morph from an aggregator into a major producer of content and now it is assessing its next move. It has been suggested that an ad-supported tier could be offered to those put off by subscription increases, or it could clamp down on password sharing.
Ironically, Netflix has eschewed sports content because it is too expensive, isn’t available globally, and lacks the shelf life of a prestige drama. But if it wants to attract and retain a new demographic perhaps it could do a lot worse than at least consider the idea.
But sport hasn’t insulated Amazon and Disney from contraction, and platforms with sport can be more expensive than pure-play entertainment platforms. The next few months will show just how elastic the demand for sport is.
8K development achieves another milestone
The last major sporting event I attended before the first lockdown was the Uefa Europa League second round fixture between Arsenal and Olympiakos. It was a great game, won by the away side in extra time, but the reason I was at the Emirates Stadium was to see the first public live 8K sports broadcast in the UK.
The suspension of live sport just a few weeks later meant the immediate attention of the broadcast industry quite understandably turned to filling schedules and then enhancing the fan experience of behind-closed-doors events. But development and trials of 8K technology has continued.
BT Sport has now achieved another milestone, broadcasting the Premiership Rugby clash between Saracens and Bristol Bears from Tottenham Hotspur Stadium live in 8K into selected homes. The trial helped the broadcaster and its partners test outside broadcast and production workflows.
8K transmissions will obviously deliver better picture quality, but also promise more immersive viewing experiences that drive fan engagement and allow broadcasters to differentiate their service from the competition.
Not that you should expect to be able to subscribe to an 8K service any time soon. More trials will be needed to refine the process, broadcasters need more of the necessary equipment, and consumers need the right televisions. Greater availability of fibre broadband will also likely be a prerequisite.
Nonetheless, it’s good to know that innovation in the sports streaming space never stops.
AI video equipment can revolutionise amateur sport
In the 1990s, the only video available of grassroots sporting events was grainy, shaky footage captured on a handheld camcorder by an operator as amateur as the contest. Now advances in mobile and camera technology, cloud software, and networks mean it’s possible for virtually any sporting event at any level to be recorded or live streamed for entertainment or analysis purposes.
The next development is automation. Lower league and amateur sports organisations now have access to specialist cameras that capture live footage and feed it into video or analytics applications – without the need for human intervention. Teams and athletes can refine their performance by analysing competitions and training sessions, while clubs and federations can benefit from new revenue streams by broadcasting their events.
One of the leading companies in this space is Pixellot. To date, more than 18,000 of its cameras have been deployed around the world, including by Real Madrid, Bayern Munich, and Barcelona, as well as by German lower league teams.
The company has also launched a portable, low-resource, and relatively low-cost Pixellot Air device to expand its reach and agreed a deal with Genius Sports to bring the technology to more than 100 competitions around the world. This means more data and more video streams for Genius’s clients – including bookmakers.
Youth sport is also getting in on the act. US startup Trace recently raised US$47 million to continue the development of automated cameras for youth sports, allowing parents and players to receive personalised packages of highlights.