For several years commentators have been quick to point to direct-to-consumer over-the-top (OTT) platforms as a silver bullet for many sports rights holders. And, whilst the direction of traffic is undeniable and understandable, there are still many who have yet to grasp the nettle.
This year marks the 20th anniversary of the moment 30,000 fans from 60 countries watched the New York Yankees play the Texas Rangers on Major League Baseball (MLB) MLB.tv service.
Watching sport over the internet is not a new phenomenon but the technological advances that now allow high-quality streaming services at scale, plus the rapid change in consumer behaviour, are leading the recent explosion in both OTT products and providers.
It’s no surprise that some of the early adopters were the sport’s most globally-recognisable professional leagues, eager to get ahead of the competition and with the budgets to underpin the R&D required.
We have witnessed a clear categorisation amongst rights holders as to their attitudes towards OTT and how it dovetails with their ‘traditional’ media distribution strategies.
20 years ago, the first sports OTT broadcast, New York Yankees play the Texas Rangers on MLB.tv. A thumbnail sized 280kbps stream. Image © MLB.tv
First, we have the major global sports properties - including the NFL, NBA, F1 and English Premier League - all of whom have been able to capitalise on new OTT entrants to stabilise and/or increase linear media rights values and carve out packages to enable a live streaming option for fans.
Last year, the NFL celebrated its history-making 11-year contract worth more than $100 billion. This included Amazon Prime Video as an exclusive partner for its Thursday Night Football package - the first time a streaming service has carried a full package of games exclusively.
The Premier League have ploughed the same path with Amazon in the UK whilst seeing its overseas broadcasting rights hit £5.05 billion over the next three seasons (2022-23 through 2024-25). UK broadcast rights will be worth £5 billion during the same period - the first time international rights fees will top domestic ones in the competition’s history.
With linear routes to market still profitable, premium rights holders have been able to develop direct-to-consumer OTT services in the background and use them to superserve hardcore fans and facilitate ownership of more direct consumer relationships to glean more data and sell more inventory.
Looking at the next level of properties, it’s clear that the attitudes towards OTT have been far more progressive. We’ve seen several rights holders do long-term deals with pure-play providers in search of reach and audience - think boxing and DAZN, plus the PGA Tour and Discovery for GOLFTV. We’ve also seen rights holders recognise that utilising their own direct-to-consumer OTT products can be a means to an end.
In 2014 WWE ripped-up its decades-old pay-per-view TV model that used to garner $50 per event, to offer all live content for $10 a month. As of 2022, WWE has secured 1.5 million subscribers and last year signed a $1 billion deal to bring the network to NBC’s nine million Peacock subscribers.
Premiership Rugby is another recent example of a rights holder launching their own streaming platform, PRTV, to complement their existing broadcast deals. Fans can now purchase a single pay-per-view ‘match pass’ or a ‘round Pass’ which offers access to all live non-TV matches across a full weekend of fixtures.
The two tiers outlined above account for a small percentage of all global sports rights holders, so where does this leave the rest of sports IP owners? The brutal reality is that the majority have very little opportunity to attract a mainstream broadcast deal that can underpin their sport in the same way as premium rights holders.
For this group, their competitions and content are often considered 'niche’, but this is where OTT has the potential to provide a game changing impact. Free from the restrictions of legacy media deals and with unfiltered access to passionate communities of fans, the opportunity is vast but, so far, underutilised.
It’s common to see rights holders at this level produce their quality content of their own and then give it away for free, handing over the monetisation opportunity to the social media giants who place advertising around it.
We have now reached a tipping point with technology versus cost enabling leagues, federations and at every level of sport to launch high-quality automated OTT solutions, whilst retaining ownership of advertising, sponsorship and data. Joymo is one such platform and we are increasingly working with rights holders to offer integrated live streams of their events and competitions.
Not only does this offer immediate benefit to fans, create revenues on a PPV or subscription basis and drive more fans to owned-channels, in the long run it can help build a business case for broadcasters and advertisers by showing the direct financial benefit and answering key questions about who your fans are. How much they consume. And, how valuable are they?
In the sport streaming space, business models and technology are constantly evolving but the desire for fans to have access to content on their terms will never change. In fact, it will only become stronger and if they can’t find what they want, when they want it, interest may be diverted to one of the competing leisure pursuits that increasingly compete with sport for young people's attention.
If you are a sports rights holder who has not yet engaged with the D2C streaming opportunity, now is the time to dip your toe in the water.