The Future of Sports and Streaming Part 1 (traditional sports)
I will admit to being a sports nut. I will watch basically any game that’s on a screen from college to professional sports, even spending hours on a weekend glued to the television for a tennis or golf match. This is one area of the content world that to date, we cord cutters have only realized a bit of the potential.
Now, it needs to be recognized that the sports world and professional sports are for the most part built on the advertising that comes in through television. This turned into TV contracts that are paid out to the leagues for the rights to their games and / or championships. Each league is different, but all of the professional sport leagues as well as the NCAA have annual contracts that are close to or far eclipse a billion annually.
It also must be recognized that when looking at the top rated shows over the course of the past few years, outside of a few outliers, the top 25 and mass majority of the top 50 are sporting events.
Even more interesting when looking at the charts for 2016, “The Walking Dead” is the only actual television show that cracks the top 20 list. This means that of those hundreds of channels that we are all forced to pay for, no one is really watching. Cable networks have recognized this and have rebuilt the empire of MLB and the kingdom of the NFL. These leagues could literally play in front of an empty crowd for each game and still bring in billions of revenue just from the TV rights alone.
Now you are probably wondering where I am going with this, and I’ll get there, I promise.
When it comes to sports streaming, it has to be recognized that MLB was at the forefront. MLB began offering a package of their games over a decade ago and has actually built a billion dollar subsidiary known as MLB Advanced Media. The other leagues have followed, and funny enough some of them, including the NHL, actually pay MLB to use their technology.
So finally, what is it about sports and steaming that needs to evolve. First and foremost, sports are at the mercy of cable companies as long as their rights are owned by them. This means that even if the NFL said tomorrow that they want their our own streaming network that shows all games, they couldn’t do it. And financially due to the league salaries and revenue breakdowns being based on television contracts they wouldn’t go with this option.
The first steps are already being taken. The NFL has licensed some games recently to the likes of Yahoo and Twitter. In addition, Facebook and others have entered the fray with attempting to win over some of these deals.
The second step is that the leagues are recognizing what almost all others in the content space are recognizing. While they may see an initial drop in revenue, they in turn could build a subscription platform that could offer a series of opportunities to streamers. The first could be a basic SVOD model that allows for streamers to pay for the games of all teams in the league. A second option could soon follow that would allow us to go even deeper and just pay for the games for our favorite team.
Steve Ballmer, formerly of Microsoft, might be one of the first to lead that charge. In June of 2016, Ballmer who owns the Los Angeles Clippers stated that he was turning down a cable deal worth $60 million annually and instead wanted to create his own Clipper subscription network that would be all about the Clippers. While he knew at the time that the league wouldn’t go for it, he did plant the seed that I think in time will grow.
A second coming of sports has already started to emerge to the streaming world and I actually think we are the first to get it. The concept is niche sports. Everyone knows about the NBA and NFL, but there are fans out there that grew up playing other sports or have an interest in sports that while not made for the hundreds of millions of fans, they are made for the hundreds of thousands or just a few million.
An even greater representation of the coming age of Sports is the engagement on social platforms regarding television shows and sporting events that shows the power of sports in the content world. Neilson has recently started to measure these interactions and the numbers are quite clear sports dominate both in viewership and social media engagement.
Entertainment:
- The Walking Dead (AMC): 2,028,000 total interactions
- Empire (FOX): 860,000
- The Bachelor (ABC): 453,000
- This is Us (NBC): 436,000
- Love & Hip Hop: Atlanta (VH1): 406,000
Sports:
- Super Bowl LI: New England vs.Atlanta (2/5): 190,780,000 total interactions
- NFL: Green Bay at Dallas (1/15): 52,878,000
- NFL: Green Bay Packers at AtlantaFalcons (1/22): 26,431,000
- NFL: Pittsburgh at New England (1/22): 24,349,000
- MLB: Los Angeles at Chicago Cubs (10/22): 21,520,000
Individual games had more comments and engagements on social media platforms than entire seasons of the most popular television shows.
We at Odd Networks have been part of seeing this first hand. We have clients that include PBR (Professional Bull Riding) and RideTV (horseback riding). There are other great examples out there such as FloSports. These niche sports channels are built on a different model. If someone were to offer them sixty million a year guaranteed for the next few years, I am sure they would accept it. Instead, they recognize that they can build an SVOD streaming channel that will appeal to the millions of their fans that will pay to watch.
The companies that make up these networks are smaller than the cable networks / pro sports leagues but still see an opportunity. They have a critical mass of fans that exist and are willing to pay to watch. On top of that they see a bigger opportunity.
In conclusion, while cord cutters are being given a first glance at some great content in the niche sports world, we are being deprived of the other half of the established sports community. I hope that in the future I can stay at home and watch all the games of my favorite teams without having to go to a bar.
If you want to see more of what we are up go to https://oddnetworks.com/
Or if you want to hear our story — An Odd Platform — The Story of Odd Networks
https://blog.oddnetworks.com/an-odd-platform-the-story-of-odd-networks-abaf3b8669ef
