The Disruption Of Live Sports Broadcasting

If sports broadcasters want to survive disruption, they need to keep hold of their customer data

Live sports are the last fruits on the tree for traditional sports broadcasters, who now face increasing challenges in the era of mobile and live streaming options. With consumers moving to streaming platforms like Amazon, Netflix, Hulu and Facebook to substitute or even replace their pay TV subscriptions, cable and satellite network revenue is falling. Further, the advancements in capabilities to stream ephemeral, i.e. live, content in a reliable and affordable manner has only ripened the live sports market for disruption.

New streaming entrants have the potential to offer the reach in distribution of traditional and digital broadcasters, but additionally many also own customer data and can utilise analytics to enhance customer experience. While research has shown traditionally it has been more profitable for sports organisations to outsource platform activities and decentralise their business to maximise reach and distribution, this leaves sports organisations with little contact with their customer base – which may be a missed opportunity in the changing landscape of the live sports market.

Opportunity in the live sports market

Digital giants who realise the value in offering exclusive and desirable content to their customer base in a bid to differentiate themselves have already made major investments in the space. Facebook joined the rights-bidding war earlier this year, securing a $265m deal to broadcast English Premier League Football games from 2019 to 2022 in Cambodia, Laos, Thailand and Vietnam. Amazon paid $50m to stream NFL Thursday Night Football to Prime and Twitch members, at no extra cost, and Google’s YouTube TV launched a live sports streaming service with exclusive rights to stream games of three Major League Soccer teams. It has begun relaying sports content onto its platform from several traditional broadcasting networks including ESPN, NBC, and FOX.

Perhaps the most significant deal this year was struck by video-streaming startup DAZN, who signed Mexican boxer Canelo Alvarez for $365m, the most lucrative athlete contract in history. Through this deal, DAZN subscribers only pay the $9.99 monthly subscription fee to watch all of Alvarez’s fights, which also includes all other sports broadcasts offered, as opposed to the $84 one-match fee offered by HBO. Offering exclusive content, conveniently online, at a fraction of the price is a proven strategy for disruption.

In the interim many sports leagues are taking advantage of the quick monetary gains to be made by selling content to traditional networks and digital broadcasters, however while these short to medium-term cash injections sound great to shareholders, some sports organisations are missing out on the opportunity to own their customer base and make data-driven decisions that provide new forms of customer value.  

Delivering customer value with data analytics

Despite the awareness of disruption, many sports organisations remain confident in traditional distribution strategies – those which focus on wide distribution and profits but relinquish customer data to the networks they sell to.  The NFL’s Chief Media and Business Officer, Brian Rolapp recently said: “Our entire model is based on reaching as many people for as long as we can. Traditionally, the best way to do that has been broadcast TV… We can get 25 million people. I have not seen a live event on the internet that can serve 25 million concurrent users at a high quality.” However, we are seeing that TV and cable networks’ audiences are in sharp decline.

On the flip side social media giants such as Facebook, Instagram and Twitter have an opportunity. Having amassed large communities of sports fans by allowing different sports organisations to post content on their platforms, they have mostly retained the customer data for themselves. These organisations have the ability to better curate to the target audience – as they have the data and behavioural analytics to optimally tailor live sports viewing experiences for users.

Data ownership, business opportunity

Having noted this opportunity to take advantage of customer data ownership, some new startups have emerged to take advantage and pair communities of fans with curated content. One example of this form of disruptor is the rapidly growing football streaming company myCujoo who built a data-driven platform that enables any club or federation to broadcast games to a worldwide audience. The company is on the way to having streamed 20,000 live matches in 2018 alone.

CEO Pedro Presa emphasises the importance of building communities in sport. “By securing exclusive and multi-year rights to live stream different football leagues, we are best positioned to understand football consumer demographics, as well as consumer habits – for instance whether they watch highlights, or full games, or both,” he says. “As we collect further data on the consumers, we are able to construct diversified offers for different markets and partner with various organisations through scalable business models.” The ability to match content to customers provides a great advantage in this changing landscape.

Finding a balance between customer reach and data ownership: The NBA Example

Sports leagues and broadcasters today are faced with a tough dilemma: do they build their own platform or seek a trusted platform partner who will share ownership of the customer? Building a platform is not an easy task – it requires significant expertise and financial resources. But partnering with the various forms of platforms that have popped up in the live sports arena is not straightforward either. In today’s vast live sports media ecosystem, several partners and intermediaries are bound by large long-term contracts and content access can be highly complex.

Choosing the right balance of partners and channel strategy is an opportunity, and one which is clearly exemplified by the NBA. Through NBA Digital, a long-standing joint-venture between the NBA and Turner Sports, a large broadcasting company, the companies jointly manage all digital assets including NBA TV, NBA.com, NBA Mobile, NBA LeaguePass, and WNBA.com. The partnership provides access to Turner’s TV customer base and gives the NBA the customer data needed to make customer-focused decisions that keep them loyal to the NBA digital platform.

With such access to both customers and live sports content, NBA broke new ground in September, announcing the possibility for fans to purchase only the 4th quarter of basketball games, marking the first time in sports broadcasting history that parts of a live game were sold live. “We imagine a situation where a fan has dinner at 8 o’clock and only has 30 minutes, so can choose to buy a half hour of a game,” said Adam Silver, NBA Commissioner.

Snacks vs. meals

The exclusivity of the partnership between Turner and the NBA allows for the NBA to produce brand consistent and exclusive content for social media channels, with the end goal of driving customer traffic back to their own and partner channels. Silver offers a metaphor for this strategy, stating: “We analogise our strategy to snacks versus meals. If we provide those snacks to our fans on a free basis, they’re still going to want to eat meals — which are our games.

With the emergence of technology players – from new entrant startups to established digital giants – all taking an interest in the live sports broadcasting market, disruption is imminent. With customer data analytics being brought into the live sports streaming space as a new advantage, sports leagues and broadcasters may miss an opportunity if they continue to focus solely on maximising distribution and reach at the expense of customer ownership.

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