The Times They Are a-Changin’. Just as they always have been, and always will. Sports and Media are no exception. Here are 5+1 predictions from our COO & CFO, Marius Larsen.
There will never be a “back to pre-Covid-normal” – Hybrid events are here to stay.
Direct 2 Consumer strategies will continue to grow. Fast.
Media companies will try to “buy the entire sporting pyramid” – including the long tail.
Sponsors of sport will start to ask, “Why bother if it’s like this?”
Increased tension between Privacy and Money.
Plus, 1 maybe at the end.
I am going to put this one as delicately as I can; things will never revert to how it was pre-Covid. The sports, governing bodies, clubs, events, and venues who have really started their digital journey will be the winners in 2021 and beyond. And no, having a Facebook page does not count. Consumers want to be able to consume (long-form) content both physically and digitally, and that product needs to be delivered within new business models if you are truly going to delight your fans. And yes, the total value in hybrid events is far greater than what you are used to, so be careful when someone tries to buy your rights (see prediction 2 and 3)
Fans of sport keep showing an increasing appetite for content. With the production and distribution cost of content being dramatically reduced (and still falling), this opens a massive market. Smaller clubs have fewer fans, but the heart and passion for their club, team, or individual athlete is just as strong. Why pay the middleman, when you as a rights holder can just go D2C on an OTT platform or through your own front end? Top level content like The Premier League is going OTT, and long tail content is going OTT on joymo.tv
As video-tech improves, and the marginal production and distribution cost of content drops close to zero, Media Companies (let us call them Goliath) will see the potential of unlocking, capturing and broadcasting the massive value of sports further down in the leagues – amateur, youth and kids’ level. We will see Goliath trying to use their bargaining power, and “attractive” distribution channel to lure the right holders into the old business model where viewing rights are sold in advance, and less value is retained for Sports.
Sponsors are really hurt by the changes in the market. They sponsor sport/teams/events that are not happening, and when they actually are happening, they are happening behind somebody else’s paywall. Pepsi sponsors a club. “This broadcast is brought to you by Coca-Cola” Sponsors will look for alternative business models where they are invested in the entire value chain of sports content. OTT platforms will be key in achieving this.
If we absolutely need to talk about “a new normal”, then being accustomed to being filmed all the time is the new normal. Either though our smartphones or Zoom. For the last 15 years the global media platforms (yes, Facebook, Google, and Amazon) have laid a siege on Privacy. We are still in the early beginnings of how video will disrupt and transform Sports and Media, but already we see a massive conflict between Privacy and Money within Sports. (read Prediction 3 again with this in mind). The Value of Sport is more than commercial value. It is also about safeguarding, development, community, family, fun, happiness, team spirit, health and just being a participant. So be careful not to give it all away. And remember, sometimes, sport should just be sport and that sometimes is worth more than money can buy.
7 years ago (2014) The International Olympic Committee (IOC) sold the broadcast rights to NBCUniversal for the period from 2021 to 2032 for USD 7.65 billion. My prediction is that in the next big sale an OTT player will go hard on the rights, and that is going to be Amazon and distribute it on PrimeVideo and Twitch.tv (and more…?).
What do you think? What are your predictions for 2021, and how are you adapting to them?