Cable TV on the ropes as live sport strikes OTT
Learning from the future: How the viewing habits of younger generations are driving change in entertainment
On a regular day in early October in Europe, a devoted millennial sports fan will wake up, fetch their mobile and open their preferred sports score app. Following American sport means recognising that the live action often takes place at an inconvenient hour for them. After scrolling through NFL, College Football, MLB and NBA pre-season results from the previous evening, they hop out of bed.
During breakfast, another app will give them personalised news on their favourite sports, teams, and players. Usually, a short video or article will grab their attention, which they will share directly with a friend or post on social media.
Before their commute, a podcast app has already automatically downloaded new episodes, from which the fan will pick one to listen to while travelling. The choice lies between a single or general-sport podcast, and may include deep commentary and analysis on the most interesting recent scores and news.
Once lunch hour comes, they will have a good idea of what highlights, sport talk-show clips, and even post-game press conferences, they must watch. Throughout the day, they will check social media for more sport-related updates, memes and GIFs to share on their personal channels, engaging with other fans by offering their own insight on trending topics in sport.
The journey home is when they start to unwind after a day’s work, so they will opt for some easy-to-digest content, as opposed to serious analysis, immersing in fan-made podcasts and YouTube channels, mixing sport with comedy and pop culture.
Arriving home, preparations begin for the most important upcoming European football matches, with particular interest in the Champions League and their own country’s main league.
But how will this fan watch a live match? The answer is hinted at in the fan’s routine.
Live streaming is making it to the big leagues
Younger fans, namely millennials (people born between the early 1980s and mid-1990s) and Gen Z (those born between 1995 and 2015), constitute the age groups with the highest percentage of ‘cord-nevers’: viewers who have never signed up for a cable subscription and prefer over-the-top (OTT) entertainment — in simple terms, film and television distributed over the internet via streaming platforms.
According to a 2018 report by the Video Advertising Bureau, OTT-only households have nearly tripled since 2013, and the heaviest concentration of subscription video on demand (SVoD) usage, as well as the highest number of OTT video subscriptions per user, are dominated by the above two generations.
A casual fan might prioritise other interests over sport and therefore accept watching highlights of a big game the day after it airs, but the same doesn’t apply to the devoted fan referred to at the top of this text. For them, a sporting event is always best watched live.
The unpredictability of a live event means possibly witnessing historically remarkable moments, thus creating lifelong memories they will cherish and share with others. The emotional impact of watching highlight videos on the train can never equate to celebrating with friends and family. Sharing real-time reactions on social media is entirely different to posting a response after an event has finished.
Entertainment is ceding home advantage
ESPN is consistently among the most watched cable networks in the US but it is still battling subscriber and audience losses like the rest of cable TV, which is facing ‘cord-cutters’ — consumers who grew up with traditional cable TV but are searching for alternative online sources of TV content. Plenty of studies and reports hold the high cost of cable responsible for cord-cutting, yet the highest-rated programmes last year were all sport-related.
Looking at these ratings, the conclusion is that most US audiences pay for TV primarily to watch live sporting events. In fact, a reported 82% of them would even cut their cable subscription if they didn’t need it to watch sport.
Another report from last year shows evidence that younger people are consuming sport just as much as those who are older (with the added bonus of more women tuning in nowadays) but where they watch it has changed.
While the costs of cable may be to blame for millennials and Gen Z being cord-nevers, the slightly older Gen X (born between 1965 and 1980) is dropping it because they also want to watch content on multiple devices, whenever and wherever.
The devoted fan above will probably browse Reddit for live streams, in all likelihood ending up on an illegal streaming site — that is, unless they find a suitable and affordable SVoD service. Sports fans are willing to pay for the content they want, but aren’t interested in paying for a plethora of channels they don’t watch — much like every other viewer who doesn’t want to pay for sports channels.
Tech giants are setting a new pace in live sport
So what are media organisations and streaming services doing to meet young sports fans’ digital needs? What alternatives to traditional pay-TV are actually giving us glimpses of the future of live sport?
Novelties such as Playstation Vue, DirecTV NOW and Sling TV in the US currently offer bundles with a lower number of live TV channels (‘skinny bundles’) at a reduced price, allowing content to be watched on different streaming devices.
Other OTT services have been bringing in viewers in the UK, such as Sky’s Now TV, which has resulted in record transactional sport revenues with its Sky Sports Pass. OTT sports channel Eleven Sports has hit several European countries with its monthly offers to live stream all Serie A and La Liga matches, even streaming weekly matches for free on their Facebook page.
Internet retailer Amazon has been paving the way by competing for rights to major sports, such as the members-only Prime Video offering of NFL’s ‘Thursday Night Football’ and the upcoming streaming of 20 Premier League season matches from 2019 to 2022.
Social media platforms aren’t lagging behind: Twitter’s renewed decision to live stream MLB and WNBA games weekly, YouTube TV’s partnership with a Major League Soccer team, and Facebook Watch’s bet on college sports are all particularly appealing to younger generations, whose social media dependency keeps growing.
Sports media need to get their head in the game
For now, the most expensive sports leagues will continue to sell their rights to broadcasters. Sports media organisations, such as ESPN, are still far from leaving cable behind to invest in OTT apps. The recent launch of ESPN+ confirms this, with its offer of combat sports, rugby, tennis and Major League Soccer matches.
This isn’t quite the alternative viewers want when they’re looking for big live sporting events. Instead, this (still early) shot at OTT sports is benefiting non-mainstream and amateur sports with growing exposure, cultivating new fans, thanks to more affordable streaming.
Go ringside with your audience
Social media and streaming apps have been spearheading the notion of curated content experiences, and younger audiences will expect nothing less in the future.
Having content packages determined for them, the way cable TV does, won’t be good enough. Younger audiences still want to follow live sport but request new content models. From stats, data, and multi-camera angles to integrated chats, the 24/7 fan wants the gourmet product with the convenience of YouTube.
Not all devoted fans are going to behave the way we’ve illustrated in the beginning of this post (or at least not every day) and certainly no millennial or Gen Z person has the same needs as the next, but the most passionate young fans are the core target for OTT services with live sport in the future. They have several overlapping needs.
All of this is why Ostmodern makes it a priority to understand how user habits and intelligence can help us design and develop better digital products. Knowing where younger fans are consuming content is only the first step in creating a fitting product.
Broadcasters and digital media groups are now competing for sports fans’ attention. Traditional live linear TV will continue to suffer as more streaming and social media tycoons achieve early success, but we’re starting to see some signs of improvement.
Ideally, the fan at the start of this text will get home, open up their laptop, log in to a digital subscription service with an affordable plan and watch the most coveted sporting events in the world. And if they want to leave the house, they can keep watching on their mobile.
Loyal fans will remain loyal — that is the way of the sports world. They only need to be found first.
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