Move over Netflix. Why TV sports rights are the new Streaming Wars.

It’s happened again. A tech giant has tried to hijack the streaming rights to a big sporting code.

This time it was Facebook who tried to buy the streaming rights to the Indian Cricket League - offering 600 mil for the next 5 years.

It didn’t work. Not this time anyway.

Indian TV broadcaster Star India (owned by 21st Century Fox) stepped in and blew them out of the water with a whopping 2.55 billion offer for the combined television broadcast AND streaming rights.

Phew! Traditional networks can rest easy for a little while longer. But the tech giants won't be giving up anytime soon.

Recent overview of tech giants bidding on sporting rights:

In the US:

• In the first big splash by a tech giant - Twitter struck a deal to stream a selection of NFL games for the 2016 season. Amazon outbid and won the rights this season, paying over 5x what Twitter did a year ago.
• Facebook have also jumped on the American sport bandwagon- recently winning the streaming rights to a selection of MLB baseball games this season.

In the UK:

• Amazon shocked traditional incumbent Sky UK to secure the UK streaming rights for the ATP Tennis for the next 5 years.
• The big one to watch is with Sky UK again - the current rights holder of the Premier League which expires this year. Bids from Facebook and Google are believed to be at the ready.

In AUS:

• A big coup back in 2015 - Optus shocked the AU landscape by outbidding Fox Sports for the streaming, and the broadcast rights to the Premier League up until 2019.

*Important to note that the above deals are for online/digital streaming rights - not TV broadcast rights (with the exception of Optus...I still can’t believe that happened). So it’s not totally doom and gloom.

Comment:

Realistically - it’s unlikely that we’ll see any of the big sporting codes, in Australia or abroad, hand over the full broadcast rights to a digital giant such as Apple, Google, or Facebook anytime soon. The tech giants don't have the TV scale, or the right user experience to fit just yet.

But the streaming and digital rights are a totally different story. The sporting codes know this and are playing it smart - entertaining all offers and reaping the rewards from all the new entrants. Prices are going up..way up. It’s little wonder that here in Australia, traditional broadcast executives from both Seven and Nine networks talked publicly about a price cap on sporting rights..

This isn't going away. What was recently a no-fly zone for the tech giants is now an open runway - with good reason.

It's time to move over, Netflix. This is the new streaming wars.

Why?

1.    The rise of the OTT

When Optus bought the rights to the English Premier League here in Australia in 2015 – people said they were crazy. As a casual soccer fan, I also went literally crazy when I had to watch it on my stupid small phone screen. What a joke.

But the tide is turning, and quickly. The IAB released an Australian study just last week which is quite important to this narrative – around the explosion of growth in people streaming on their OTT (Over The Top) TV devices.

According to Nielsen, over a 15-month period, connected TV streams has increased by 351% to a total of 17.6 mil (January 2016 - March 2017) across the four major FTA broadcasters in Australia.

A huge increase in such a short amount of time – and it doesn’t even include the usual streaming players of Netflix, Amazon Prime, Stan etc. So, what’s driving the growth?

As seen below, it’s the likes of Apple TV and Telstra T-Box.

Source: IAB - Connected TV The New Era of Television.

The crucial part here is that a device like an Apple TV (albeit in lower scale) is starting to enter the median household of Australia. According to eMarketer, in the US this is even more mature - with over 50% of Americans currently owning a connected TV, and 13% of them owning the Apple TV device.

So when I get home and turn on the TV - instead of seeing the normal TV channels, boom – I see apps instead. These apps are Netflix, Facebook, and Apple.

Then, if I want to watch something on Facebook, like their newly produced broadcast shows, or a sporting code like the MLB in the US - I’m not forced into watching it on my tiny mobile screen.

Instead, I’m watching Facebook on the 60inch plasma TV through an OTT device.

This is a game changer for all parties - especially the consumer, and a big worry for the traditional broadcasters.

2.    Whats better than one screen? Two screens.

We’ve been talking about the amount of people multi-screening when watching TV for a while now. But most of the time, the screens never connect.

There will be always be one experience playing on TV, and then you’ll be looking at your phone occasionally, viewing something totally different at the same time. But if a digital giant like a Facebook, or Amazon is providing the experience across BOTH screens, does this change?

In that new experience, I’m watching soccer through the Twitter app on my TV screen. I'm also using Twitter on my mobile - checking scores, commenting and watching highlight reels in real-time. Social chatter is never higher than during live sporting games, so eventually – maybe my commentary or social posts are broadcast from my small screen, to the big screen for the whole world to see. At the half-time break I use my mobile to play an interactive game on the big screen against people around the world. Hey, I've heard that e-Sports will kind of be a big deal soon...

In another experience, you are at home watching the NFL through the Amazon app on your TV screen. A series of NFL products pop up on the screen which are exclusive to Amazon customers. Fortunately, you are also on your Amazon mobile app too – which is synced up, logged in and instantly driven to the purchase page on Amazon.com.

Now that would be a true multi-screen experience.

Final word:

Too much future-gazing? Hmm, maybe.

However, the threat posed to TV broadcasters by the tech giants isn’t just me looking into the future. It's right now.

TV isn’t dying and it's certainly still king.

If the above trends of OTT and multi-screening continue - it will always be king too. I’ll still be watching my favorite sport each week on the TV. Just maybe, i'll be watching it through my Facebook app, or Amazon, or Google, or Twitter, or (insert yet-to-be created tech start-up) app instead.

Let the new streaming wars begin.