Enrique Dans
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Enrique Dans

The Big Match: tech companies challenge traditional TV’s hold on sports rights

Amazon has secured the exclusive rights to broadcast 20 British Premier League matches in the upcoming season, wresting them from traditional television players like Sky and telecommunications companies such as BT, which have dominated the sports broadcasting panorama for several years. The three-year deal with the top flight of English football, will be included in Amazon Prime subscribers package in the United Kingdom, and is the result of a strategy designed by Premier League CEO Richard Scudamore aimed at attracting new competitors to bid, focusing particularly on technology companies.

The auction confirms my predictions a while ago that, in a very short time, traditional television channels will lose the transmission rights for major sports competitions and live events to technology companies, which are willing to pay more based on higher monetization expectations. Google, Netflix and others have invested in 8K video so as to be able to compete with the traditional companies, and they are able to offer high quality programming adaptive to bandwidth conditions, without advertising and that can be watched anytime, anywhere, their efforts look like paying off.

Traditional television is now only watched by the over-sixties. Just about everybody else has moved away from the traditional, scheduled model: millennials watch live TV on demand. The idea of ​​watching television when a programming executive decides to broadcast what we want to watch, with advertising breaks we don’t, no longer makes sense. Within this evolutionary process, only content such as news bulletins and live events such as sports can get us to sit down at a given time and put up with advertising breaks. Amazon, which has embarked on a strong growth strategy to position its audiovisual content, has already broadcast competitions such as the US Open and several ATP World Tour tennis events, along with a number of NFL games. The company’s strategy is to obtain worldwide rights, something that has not been possible in the case of a Premier League that has negotiated very lucrative agreements country by country, but this now looks set to change.

This is only the beginning, a question of time and logic. Soon, we will see similar deals related to content capable of guaranteeing a reasonable level of interest among the subscriber base of these companies, agreements for territories where the previous rights holders no longer see a profit, along with billion-dollar mega-auctions beyond the means of local competitors to buy proven content or that can attract a global audience. For traditional broadcasters, the profitability of these type of contracts is increasingly in doubt; the progressive decline in their viewing figures and revenue as people grow tired advertising breaks will only make matters worse. Meanwhile, Jeff Bezos is looking for every means to increase the value proposition of Amazon Prime, which is increasingly being taken up in in middle-income households and not just the wealthy. What’s more, Amazon Prime subscribers spend twice as much in the platform as other Amazon users. With loyalty like that, little wonder that the company is going out of its way to hold onto them.

What next? The broadcasting rights of the Champions League, Six Nations, NBA or the EuroLeague Final Four being bought by Amazon, Netflix or Youtube? If I were a betting man, I know where my money would go…

This article was previously published on Forbes.

(En español, aquí)



On the effects of technology and innovation on people, companies and society (writing in Spanish at enriquedans.com since 2003)

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Enrique Dans

Professor of Innovation at IE Business School and blogger (in English here and in Spanish at enriquedans.com)