Sports Draw Streaming Subscribers, Stimulate Retention

Forget the reason most analysts cite for the slow demise of pay TV.

Oh sure, a bundle of 2-300 channels you never heard of/never visited for $100+ dollars probably helped a little but…

Come on folks, television didn’t earn its apt nickname - “The Idiot Box” - for nothing.

Studio and network bosses very rarely said, “Hey, let’s give the folks out there a bunch of shows, movies that are, you know, refined, moral and intellectual. You know, stuff that makes them think, helps them, challenges them to expand their minds and understand/appreciate the world they live in. Yeah, content that’s actually good for them.”

Nope, they went all-in for the lowest common denominator – pablum.

They were shooting for the best Nielsens possible.

If a show didn’t really score in the dailies, it was quickly replaced with something that was more base, bland even.

Okay, we know that wasn’t the stuff you turned your set on to watch, but they did.

To prove it, the studios/networks were able to stuff the content around 20 minutes of ads every hour.

Netflix and its technical complementors – Amazon and Apple – changed the business causing the “traditionalists to rush for safe havens.

Netflix, the benchmark for the streaming industry, developed a vast library of content (with better/more diverse product) and people embraced the change to the point where Netflix racked up more than 300M worldwide subscribers.

For clarity’s sake, we don’t consider Google’s YouTube with 2.5B active users as a streaming service but rather a video-centric data collection service that rents personal data.

But when it comes to serious content, it has been difficult for the American studios/networks

like Disney, Paramount and Peacock with an extensive legacy entertainment industry to pivot to the new business model.

According to Ampere Analysis, streamers are expected to account for 20 percent of the $64B global sports rights investments this year.

No, we didn’t forget WBD, but they’ve had their own unique challenges -- a large number of legacy assets, a distant relative of Netflix called HBO that they’re struggling to convert into Max and a major financial headache of debt and restructuring costs they have to deal with.

Of course, if that wasn’t enough, Zaslav and crew overestimated their clout in the rapidly evolving live sports arena.

They lost the NBA rights to ABC/ESPN, NBC and Amazon Prime for an 11-year agreement.

But Zaslav isn’t worried because he said the negotiation discussions were “constructive and productive;” and what the heck, there’s always 1935.

In the meantime, WBD’s CFO Gunnar Wiedenfels consoled Wall Street by saying, “It’s very easy to lose control over sports rights investments.”

That’s probably true, but this year is proving to be an evolutionary year for live sports around the globe.

Multi-channel streaming is giving fans more control while younger fans are shifting from watching complete events to highlights, documentaries and short social media videos.

At the same time, Netflix, Amazon Prime and Apple TV+ are youngsters in the sports-content arena. They’re also quick studies. But DAZN, which accounts for a third of streaming sports investment, will retain its global sports distribution leadership position.

Technology and culture are completely reshaping the way people of all ages consume entertainment; and sports and streamers are seeing the benefits of major season-long competition for subscription and retention.

To strengthen its position in both content production/distribution as well as professional sports, Disney entered into an agreement with FuboTV the first of the year which, when combined with its Disney +, Hulu, ESPN and live TV business, would expand their online TV business with 6.2M subscribers.

Of course, the acquisition will face the usual FTC scrutiny; but with the rapid change that is taking place in all segments of the national/international sports industry and with the chaos/insanity going on in Washington D.C., …who can tell.

To highlight their entrance into sports, Netflix picked an event that would reach the young and old crowd – the heavyweight match between retired Mike Tyson and social media influencer/boxer Jake Paul.

While the streaming didn’t go as smoothly as viewers would have liked (frozen images/buffering), it was a great way for Netflix to highlight its ad-supported service, which boasted 70M users after the event.

We should note though that the Katie Taylor vs Amanda Serrano fight was more competitive and more professional.

It was all part of the streamer’s growing sports roster for its large global market which includes FIFA Women’s World Cup, NFL, WWE and a rapidly expanding roster of men’s and women’s events around the world.

The company is planning English and Spanish-language broadcasts, including the development of programming and studio shows to complement live matches during the FIFA Women’s World Cup. They will highlight players and culture to build excitement for the growth in demand for women’s sports.

Of course, Amazon wasn’t exactly sitting on their hands with NFL, futbol (soccer), NASCAR, MLB, and more.

Both firms are expanding their global programming around specific sports teams and athletes, as well as sports adjacent activities.

Apple has also joined the sports frey with soccer, men’s/women’s professional/college basketball and other regional sports, documentaries and global event recaps/highlights to satisfy the younger audiences desire for data-rich, interactive sports experiences.

So why all of the “sudden” interest from streamers in acquiring live sports streaming rights and sports interest in aligning with streaming services?

Of course, for the various sports franchises, it’s (always) about the money; but it is also about the future.

It’s a poorly kept secret that people have been cutting their linear TV bundles and choosing to move to more economic, more flexible streaming services.

Sports has been able to resuscitate linear TV for short periods with tentpole events like the FIFA World Cup, Super Bowl, World Series, NBA, FIBA Championships and the Summer/Winter Olympics; but it has been tough – and expensive - for even events like these to hold back changing viewership habits.

This is especially true of younger generations who never had or are unlikely to have a traditional TV bundle.

As a result, sports are following Canadian hockey great Wayne Gretzky who said, “Skate to where the puck is going to be, not where it has been.”

That is obviously at the streaming end of the rink.

While not everyone around the globe is a sports follower (some prefer video games), show/movie personal/home entertainment has reached a saturation point where people willingly – and quickly – move from one service to another. To get/retain subscribers requires a steady influx of new, different content.

Live sports continue to be the most dependable cornerstone for capturing – and retaining – mass audience engagement.

The various sports all have their individual/team (national/international) that people are loyal to/follow through good times and bad.

The live sports viewers are also coveted for another very good reason.

They are deeply loyal, highly engaged and 80 percent say they tend to remember the ads seen during their live sporting events.

And with fewer and more tightly controlled/developed ads, they can be more memorable, more valuable.

Ampere’s SVoD Economics report showed live sports drove subscriptions for Netflix, Peacock and Paramount. The shift to streaming for live sports coverage is no longer in the distant future … it’s here.

All of the major streaming providers have aggressively gone after – and won – some of the biggest sports media deals going forward.

New sports-focused SVOD services are coming online to further shake up the status quo.

This year and in coming years, we’ll see the industry develop and implement new experiences that will engage fans, monetize content and improve viewing quality.

Already in the works is immersive, real-time integration, in-game betting, seamless merchandising capabilities and the exploration of a variety of social experiences to tie the viewer even closer to the team, the sport and … to the service.

In addition, streamers are exploring new technology to improve the advertising experience, cement more lucrative partnerships and grow their advertising revenues.

Behind the scenes Netflix, Amazon, Disney and others are focused on improving their broadcast quality and reliability, personalizing fan content feeds, serving relevant ds to fans and providing improved viewer support.

At the same time, there is increased interest in catching the next wave … women’s sports. New teams, leagues and mega-events are becoming increasingly “interesting” in the female sports arena with early organizational agreements being signed that have the potential of long-term benefit for all parties.

Women’s leagues, especially in the US, Canada and UK, are working to maintain their momentum with new franchises around the individual countries. The WNBA is adding three new teams next year – Golden State, Toronto, Portland – with plans to have 16 teams by 2028.

The NWSL has 14 teams with new teams being established in Boston and Denver next year.

The new PWHL (Professional Women’s Hockey League) has six teams and will add two more next year.

Disney has quietly launched Women’s Sports Connect which is designed to streamline category media investment. They have already developed distribution properties of the WNBA, National Women’s Soccer Leage and NCAA women’s championships.

Europe’s women’s football (soccer) is restructuring the UEFA Women’s Champions Leage and adding more club competitions this year and next.

We expect to see the savviest streaming management teams that are looking for long-term, consistent growth and special opportunities they can leverage, and “own” tomorrow will be making serious commitments to women’s sports based not only on the potential in an individual country but globally.

New stars are emerging in every sport who are able to carry the banner for their team and the total sport.

Viewership is presently small – WNBA game averaged 657,000 viewers and NWSL averaged 175,000 viewers – but the commitment of these fans will only grow and spread across the population – male and female.

The excitement and interest around women’s sports is unprecedented and has only just begun. Female sports are gaining investment and interest.

Realistic multi-year streaming media agreements backed by strong marketing efforts will not only expand and promote the strength, agility and commitment of women on the fields and on the courts but also raise the image/respect of all women.

More importantly, we believe that the digital expansion of women’s competition and sports can increase the value of both the athletic and entertainment industries.

As Effie Trinket reminded us in The Hunger Games: Mockingjay – Part 1, “You know everything old can be made new again...”

Then, giving the athletic and streaming industries some sound advice, Katniss Everdeen, added, “Start simple. Start with that you know is true.”

They each know their respective industries and their common goal … capture/retain and entertain the growing global audience.

Andy Marken – andy@markencom.com - is an author of more than 800 articles on management, marketing, communications, industry trends in media & entertainment, consumer electronics, software and applications. Internationally recognized marketing/communications consultant with a broad range of technical and industry expertise, especially in storage, storage management and film/video production fields. Extended range of relationships with business, industry trade press, online media and industry analysts/consultants