SPORTS MEDIA LANDSCAPE DISRUPTION (TREND #5)
Dear Sports Business Community!
Over the past weeks, we at Nielsen Sports & Entertainment have presented the key Commercial Trends for 2020. The least we all can do in these difficult times is gain more insights, to propel our post-C19 resurgence. The third part in this series concerns the media landscape in 2020 and the disruption of its contents:
The explosion of direct-to-consumer offerings is shaking up the sports content industry, offering providing wider choice and personalization opportunities than ever before, and also impelling any organization which carries or produces sports content to rapidly evolve.
The sports media industry is in a state of flux, with its new technologies and changing consumption habits ─ creating fresh opportunities for content providers and new platforms, but also presenting major challenges for traditional or ‘legacy’ media companies.
Going into 2020, there is an inherent uncertainty as to how the landscape will evolve, something which even major players acknowledge. As Peter Hutton, Director of Global Live Sports Partnerships and Programming at Facebook, puts it: “The rules aren’t really clear yet. There is plenty of uncertainty about where the industry will go and at what pace”.
Despite any possible changes, the obvious constant is that sports will remain a driver of all kinds of media businesses. In the near term:
- Competition for the live rights for top-tier sports is likely to remain high (if not intensify)
- Different types of bidders will have differing business models, with live sports valuable or integral to each
- For free-to-air networks, live sports will increasingly be the only way to garner mass audiences, drive advertising revenue and cross-promote additional programming
- For pay TV networks and pure play OTT services, live sports will be the best way to acquire subscribers, maintain ARPU, arrest churn and add additional sources of revenue
- For nascent subscription services, having top-tier live sports will be the best way to build meaningful scale
- For digital conglomerates, such as Amazon, it will drive take-up of profitable core products and services
- For social media networks, sports will help to engage the user base and drive advertising revenue
- For telecommunications providers, sports will help to add and retain connections in highly competitive markets for mobile and or broadband
- Broadcasters with a presence across multiple platforms, including free-to-air and subscription, can be expected to seek exclusivity spanning both linear and OTT outlets
These trends will lead to a number of consequences for rights holders and broadcasters. In short-term future, rights holders will have to seek complete understanding of the exact audience segments and how to engage with them instead of just looking to maximize rights fees. Traditional linear broadcasters will have to embrace OTT as an opportunity instead of just a threat.
Looking for further insights?
Consider joining our current Webinar Series: State of the Sponsorship Landscape
On June 2nd, we will discuss SPORTS MEDIA LANDSCAPE DISRUPTION including the following topics
- Proliferation of OTT
- Evolving pay TV
- Telcos and Sports
- Investment by FAANGs
- Changing Rights-Holders Strategies
Please PM me if you want to participate.
My best wishes go out to all of you, stay safe!
Lars Stegelmann | +49 171 645 3311 | [email protected]
#nielsensports #sportsbusiness