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For Sports Rights Holders, the Future is Digital


When professional sports resumed over the summer following a COVID-19 induced hiatus, the games had quite a different look and feel. The absence of in-person fans left stadiums eerily quiet, which resulted in commentators overcompensating to fill dead air. Some leagues tested with virtual and cardboard fan stand-ins, though neither were particularly effective in replicating the energy of an excited home crowd nor stifling poor television ratings, which have been down across the board. While the sports sector will eventually bounce back, media rights holders will have to reckon with a global audience whose lives and media consumption habits have largely shifted digital. And with a record-high 6.6 million American households expected to cut the cord by year-end in favor of free and low-cost streaming video alternatives, now is the time to embrace digital and deliver new offerings to engage modern fans.

The good news is that the sports media ecosystem is ripe for innovation. As media rights owners reassess content plans for a post-pandemic world, a diverse digital content strategy will be paramount in unlocking new IP value and discovering new revenue opportunities. What might a winning strategy look like? To start, perhaps a recognition that a 2+ hour sports broadcast product is not necessarily suitable for everyone all the time. That’s not to say that a sports version of Quibi should be at the forefront of rights owners’ minds — we saw how that worked out — but rather, that there are audience subsegments that prefer more tailored offerings. The NBA’s end-of-game offering, which enables fans to purchase and stream the 4th quarter of games for $1.99, is a great example of curating an a la carte offering for both cost-conscious and time-conscious consumers. It will certainly be a case study worth following going forward and may very well pave the way for more micro transaction-based viewership models. 

For traditional broadcasters, a content strategy that includes more live sports on digital over-the-top (OTT) services could be a key differentiator for audiences deciding between streaming platforms. NBC Sports announced that all non-televised Premier League soccer matches would be available on its Peacock streaming service in 2021, which along with its 2021 Olympics coverage will certainly broaden NBC’s diversity of content offerings and should extend its digital audience. Similarly, Disney-owned ESPN has been rumored to push for more NFL rights, which would supplement both its ESPN+ digital offering as well as bundled package options with Disney+ and Hulu.

And with several studio networks in financial disarray due to stalled summer productions and decimated box office revenue, expect to see more fragmentation with non-traditional players emerging to capitalize. Newcomer DAZN’s recent expansion to 200 countries and remarkable 2019 growth is a great example of how unrealized IP value can be unlocked by identifying underserved sports media markets and delivering premium digital experiences. Technology giants have also been rumored to augment their subscription video services with larger sports offerings. Amazon’s recent upping of its NFL “Thursday Night Football” digital programming on Prime Video and subsequent announcement that it would be streaming its first playoff game will serve as a pivotal proof-of-concept for potentially broadening its sports footprint ahead of the NFL’s upcoming media rights tender, which is expected to surpass the current $39.6 billon rights deal.

Beyond the live broadcast, a number of sports content categories could see major growth in the years ahead. Game highlights, an asset class traditionally reserved for pre- and postgame shows, have seen an enormous increase in consumption on social channels in recent years with some insiders suggesting the value of sports highlights will eventually eclipse live rights. Similarly, other IP assets such as documentaries, behind-the-scenes stories, and training sessions all represent opportunities to bring fans closer to players and teams while expanding the media ecosystem. This past summer, Philadelphia 76ers rookie Matisse Thybulle partnered with YouTube to provide an in-depth view of life in the private NBA bubble via his 9-episode self-edited video blog, which amassed millions of views and an active subscriber base in the process. And with college sports beginning to allow amateur athletes to exploit their likeness for commercial gain, expect to see a new wave of media partnerships in the near future. 

Last, as leagues grapple with social distancing measures and compromised in-person fan attendance, now is the perfect time to reimagine what it means to watch a game at home and on the go with next-generation technology. Augmented reality overlays can deliver amplified and immersive viewing experiences and align nicely with adjacent fan interest areas like fantasy teams or esports. Amazon’s interactive X-Ray feature and Twitch offerings could offer a glimpse into the future of sports broadcasts where the viewer is in control of what they see and hear. And with sports betting gaining more favor across the country, that future may be closer than we think. For now, the challenge posed to the sporting world is clear: How do we make our product more attractive and attainable to an increasingly digital-first audience?

For years, live-sports flourished on linear television and commanded premiums as the last reliable appointment viewing option for consumers. And while tier one sporting properties like the NFL, NBA, and Premier League will continue to be on the receiving end of lucrative TV rights deals for live-event coverage, sports media rights holders must diversify their product offerings in order to capitalize on digital tailwinds and curb the financial impact of continued cord-cutting.

Alex Akers leads technology transformation projects for KlarisIP, working alongside media and entertainment professionals to define digital media supply chain needs for the next generation.