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Volume 22 No. 23
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Mobile, millennials and (social) media: What they mean for sports content

On June 1, Mary Meeker of Kleiner Perkins Caufield & Byers released her annual Internet Trends report. This longitudinal study always provides interesting macro-findings. But as you would expect in a broad report, her analysis is rudimentary in terms of how it applies to sports.

More than virtually any other content genre, sports is on the leading edge of technological change, often driving adoption of new products and services. It makes sense to look deeper at what these global trends mean for our industry.

Earlier this year, ThePostGame partnered with the Center for the Digital Future at USC Annenberg on a comprehensive behavioral study of American sports fans to learn just how these trends are changing the way we consume, communicate and spend around sports content. The results of our #SCORE 2016 Report were enlightening, especially in the context of the latest Meeker report.

Advertising + Mobile = Opportunity

Advertising has long been the lifeblood of sports content, allowing free or subsidized access to millions of fans. Meeker shows that while other forms of advertising are growing modestly or declining, internet advertising growth is accelerating, increasing to 20 percent year-over-year growth in 2015, driven by mobile growth at 66 percent year over year. Yet she also shows that marketers remain overindexed to legacy media like print, radio and TV.

As our #SCORE 2016 research confirms, mobile is the fastest-growing platform from a sports content perspective, especially for younger fans. Mobile devices are already tied with computers as the No. 2 media platform for consuming sports content, behind television. While the youngest users are not yet “mobile first,” 65 percent of Generation Z and younger millennial fans are consuming sports content on a mobile device. If the ad spend becomes proportional to consumers’ time spent, mobile revenue will drive a lot of the future growth for leagues, teams and networks.

Growing Spending Power of Millennials

Meeker surmises that the millennial generation, at 27 percent of the U.S. population, will see its spending power increase significantly over time. But are they inclined to spend that money on sports content? Our research says yes.

In perhaps our most encouraging finding, more than 90 percent of sports fans are willing to pay for sports programming. Those ages 15-36 (Generation Z and millennial) say they will pay the most, while the oldest sports fans (who grew up accustomed to free sports content on advertising-based TV networks) will pay the least.

Sports leagues and networks appear to have learned the lessons of the recorded music and film industries that, in trying to protect their windows at all costs, subjected themselves to piracy and the devaluation of their business models. By leveraging technology to make out-of-market online streaming packages available to consumers and pricing them fairly, sports has mitigated the effects of piracy and opened up new revenue streams that will grow significantly over the next decade.

Our research also shows that the market appears strong for over-the-top (OTT) subscription channels. Sixty-three percent of all sports fans are interested in paying for one. The number is even higher for fans with children in the household (70 percent) and intense sports fans (78 percent). Sports fans also say they will pay more for online streaming channels than for cable/satellite channels. Fifty-six percent say they are willing to spend a higher proportion of their budget per month for online streaming channels.

The Power of Social

Meeker’s report touches on the digital audience penetration of social media platforms, led by Facebook but with Instagram and Snapchat as ascending forces due to their high levels of engagement. Image and video consumption growth on social platforms remains strong, especially among the younger generations that are visually driven.

It is critical for leagues and networks to understand these social media channels since they will evolve from serving as promotional platforms to becoming distribution outlets. The NFL-Twitter partnership for this season is only the beginning. Our research looked deeply into this and found some compelling findings:

When asked “What social media channels do you use to get sports-related content and information?” the top five were: Facebook (67 percent), YouTube (44), Twitter (34), Instagram (26) and Snapchat (10).

Facebook is the dominant player across all age demographics. But Snapchat is demonstrating surprising strength for a relatively new entrant among Generation Z (45 percent) and young millennial (23 percent) audiences. That said, Snapchat drops precipitously after age 28.

There are interesting findings when you cut the data by particular sports, ethnicity, income, age, fan intensity and geography. Every league’s fans, for example, exhibit different behavioral tendencies on social. One cannot employ a one-size-fits-all strategy.

Meeker’s data on the slowing of growth rates of internet and smartphone penetration is not an issue for the American sports industry. If anything, it represents an opportunity. Growth is slowing because we are nearing mass saturation. Everyone who wants connectivity has it. Everyone who could use a smartphone has one. The challenge today is to understand what fans need and build products that satisfy demand at a fair price.

Multibillion-dollar decisions are being made today that will affect how fans access sports content for years to come. Yet it is clear from the research that younger fans have different preferences, behavior and spending patterns. Leagues, teams, TV networks, technology companies and advertisers need to adopt a data-driven approach to understand the shifting landscape. The process is no different than building a stadium. Before you can add the suite levels and scoreboards, you need to make sure your architects and engineers understand the geology upon which the structure sits.

David Katz (david.katz@thepostgame.com) is founder and CEO of ThePostGame, a leading digital sports lifestyle content company and co-sponsor of the #SCORE 2016 Report. For more information on the #SCORE 2016 Report please contact Phoebe Schramm at pschramm@digitalcenter.org.