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The OTT report | Chapter two: Audiences and data

2: Audiences and Data: Not Just a Number

For many niche and minority sports that are under-served by mainstream broadcast coverage, OTT platforms are already able to compete for rights-holders’ attention on the measure of quantity: audiences that are too small to attract a television fee can be viable online, and make a positive contribution to revenues if a property can aggregate and monetise them across a number of territories. As European Hockey Federation general secretary Angus Kirkland explains: “The one advantage we have [in going DTC] is if we can’t get a broadcast deal in a territory we have the flexibility to say the content is available through the platform and maybe you have to pay to watch it. I’m not saying we will do that in the near future but it’s a good opportunity for us because it means we don’t have to accept a bad deal any more.”

That is a view seconded by David White, president of media at Lagardère Sports and Entertainment, who says: “If a federation, for example, cannot achieve a fee for their media rights, they haven’t really got a lot to lose by going DTC. They know where their fans are and they can work with their sponsors to make sure they can achieve delivery to the number of people they need to form the basis of an audience.”

In the very highest tiers of the rights pyramid, however, it is significantly harder to make the OTT numbers add up in the same way, with incumbent broadcasters (especially those going free-to-air) still able to reach larger audiences than those delivered by emerging digital alternatives to date. But OTT platforms here are much better able to compete with legacy linear TV on audience quality than they are on quantity: digital delivery enables rights-holders to gain a much fuller picture of their viewership than simply how many people are watching, allowing them to drill down demographically into who these consumers are, where they are from and a whole range of further detail around their behaviours and preferences that can have a profound impact on business strategy stretching far beyond media rights.

Craig Niven, lead consultant at data-driven marketing agency Two Circles, which works with OTT products including NFL Game Pass and the ATP Tour’s Tennis TV, says of the platform’s key point of appeal: “A big difference between OTT and traditional, broadcast television is the ability to track true viewership volume. Monitoring engagement on traditional, broadcast TV is primarily achieved through BARB or Nielsen, who will attach consumption tracking software to a representative sample of the population, track what that sample watch and then extrapolate that number to present total viewership. This means traditional broadcasters struggle to get a true read of whether 13 million people were watching something – it’s an estimate.

”Not only can OTT get you a true figure of the total viewership volume, but you can also build a greater understanding of your audience’s consumption habits at a user level. For example, OTT allows you to track how many users watch a live match, and then help you understand other types of content they watch on your product. Some might primarily watch live content, others would watch replay or highlights of a specific player or team … but ultimately you can see exactly what a user’s viewing preferences are. This gives you a much more rounded view of what people are doing with your content, which is incredibly interesting and powerful insight that can drive both editorial and commercial strategy.”

2.1: Viewers in close-up

So who is watching? OTT may have been around for more than a decade but is still an emerging technology in the sports media market and, as such, has seen its general user base exhibit the expected characteristics of early-adopter demographics. Consumer research carried out by market intelligence agency Mintel in October 2016 found use of subscription services among British adults was skewed towards men, younger generations (particularly Millennials) and more affluent household income groups.

Use of pay-TV and streaming services to watch live sport, by generation, October 2016

Base: 940 internet users aged 16+ who have watched live sport at home/someone’s home/outside of home on personal devices in the last 12

Source: Mintel

However, that picture is beginning to change as digital literacy becomes more widespread, helping older groups in particular gain confidence in using these types of online services. Sportradar OTT managing director Rainer Geier explains: “The digital audience is 80 per cent male and 75 per cent are aged 20-35. They are much younger than a classic linear audience. But now older audiences are coming to OTT too because there are many more offerings, and in many cases also because there is no other way to get access.”

The on-boarding process is ironically also being helped by the restrictions on content that pre-existing contractual commitments have imposed on rights-holders, so that many proprietary DTC offerings are based around more traditional media formats that are familiar to older audiences but which digital platforms were expected to render obsolete. Matt McKiernan, director of StreamAMG, which provides online video platforms to 16 of the 20 Premier League football clubs, says that these teams’ lack of live video rights has had a positive impact on the broadening of their viewing base: “We see a good spread age-wise now because the football fanbase is very broad and the older generation are used to audio commentary, which is the only live coverage a [Premier League] club website will typically have available.”

The point about the demographic breadth of football’s fanbase is an important one that applies across sport more widely and which means the industry’s digital development focus will quickly expand beyond the default technology targets of Millennials. Reaching people born into this generation between 1980 and 1999 has become a priority for sports properties as a view has taken hold that recent declines in live television ratings have been driven in large part by Millennials deserting traditional platforms in favour of other types of video consumption on mobile devices and social media. In this context much recent interest in OTT services can be seen as an effort to fish where the fish are.

A study published by McKinsey’s Global Sports and Gaming Practice in October 2017 underlines the importance of Millennials’ streaming habits to the growth of OTT sports services, but also highlights the potential of older demographics – particularly the sports-friendly segment of Generation X (born 1965-79) – to make the same jump. Analysis of research in the US showed that Millennials and members of Generation X have broadly similar levels of sporting interest, particularly around soccer, college sports, MMA and the NBA, and of digital media consumption too, with both groups spending 2.7 hours a day on mobile devices.

Committed fans*, by sport and generation, June 2017

* Fans who identify as average, committed or avid (excludes non-fans, casual and very casual)

Source: McKinsey&Company

The big difference between the two was in terms of the forms that digital media consumption takes, with Millennials reporting using streaming websites and apps at twice the rate observed within Generation X (and even more so for illegal streams). The gap, however, is closing and is likely to continue to do so as streamed sport moves ever further into the media mainstream.

2.2: Capturing the audience

The profile of OTT services has gained in recent years from the parallel rise of interest in data as a driver of marketing strategy, in sport as elsewhere. This has led rights-holders to take a more evidence-based approach to their own commercial planning and in supporting the pitches they make to potential sponsors, and has heightened awareness of all technologies that can offer new insight into the behaviours of fans. As a result, the ability of digital OTT platforms to mine a rich and deepening seam of viewer data is making them increasingly attractive to more and more properties. “If you can go back to the rights-holder and say 75,000 people watched and here are their names and addresses, that is more valuable than a blanket figure that says 250,000 people watched but you don’t know who they are,” says Lagardère’s David White.

What makes that level of data capture possible is the nature of the technology underpinning OTT platforms. NeuLion executive vice-president and co-founder Chris Wagner explains: “It’s first-party data when you deliver DTC. It’s not like satellite and cable – it’s not one-to-many. The internet allows delivery one-to-one so you can create a conversation with the viewer, which creates a large volume of watch data we can aggregate with billing and consumer data. All that significant information allows the rights-holder to run a dashboard that can tell them who is their best viewer and show where they can find similar. You just don’t get that with linear TV.”

Typical OTT service metrics include:

•    Content viewed

•    Watch duration

•    Device used

•    Network

•    Location

•    Purchases made

•    Trial conversions

•    Churn rate

Open-access content can capture many of these data points, but it is subscriber information (whether paying or free) that opens up the more granular levels of detail that can be most valuable. StreamAMG’s Matt McKiernan observes: “What we generally see is most clubs will lock everything behind a registration wall so any unique session will tell you more about that user.”

2.3: Making the numbers add up

The knowledge that rights-holders and OTT providers are able to gain from the data they harvest through their DTC platforms is now being put to work in two important ways: in improving the media experience for the consumer, to retain their interest and extend the time they spend with the brand; and in using that strengthened engagement to generate more revenue, both from the individual customer and from commercial partners for whom these new levels of knowledge and access can add value to their own campaigns.

On the first measure, Two Circles’ Craig Niven says: “Once rights-holders have the right measuring tools and analysis platforms in place, they can use the data to evolve and improve their content because they know what drives value and can therefore focus on making more of it.

“To take an example from outside sport, it is very interesting to look at The Grand Tour and understand the way it has evolved over two series; there’s no doubt this has been guided by Amazon’s understanding of what the customers are watching within each episode, and this has enabled Amazon to give them more of what they want.”

As well as informing the longer-term elements of content development strategy, data is also beginning to drive more immediate processes of content signposting and discovery, with technologies such as AI and machine learning becoming more and more able to personalise automatically a widening range of elements of the viewing experience, from homepages and menus to elements of the video stream itself, such as overlaid statistics and even the advertisements served up on screen. UFC.TV, for example, allows fans of the mixed martial arts property to ‘create’ their own channels and collections by filtering a selection of preferences that allows the platform to re-order its stock of highlights in an interest-relevant, linear-style format that is understood to deliver a significant uplift in viewing time.

Sportradar’s Rainer Geier says of the process behind this type of personalisation: “The user gets new features and really relevant content based on their behaviour but the intelligence behind the knowledge of the user means I can create that content automatically. It is not people sitting behind a screen editing the game, it is done instantly.”

The next step on this road, Geier anticipates, is for contextual advertising, based not just on viewer preferences but also responding to the live action itself. He says: “There will also be new products for sponsors and the advertising industry. The advert appears in relation to the content so Ronaldo scores a goal and his shirt is advertised or there is a foul and the ad is for a painkiller. These are all new techniques, all based on video and data and only possible with OTT.”

Influencing purchasing habits and intent is not just for advertisers and sponsors but is also an important part of rights-holders’ OTT considerations. Bruin Sports Capital executive vice-president and principal David Abrutyn observes: “Data has never been more valuable and when you have a direct one-to-one relationship with a consumer and understand how frequently they are watching or engaging with your programming, that enables you to move them along the spectrum to buying a licensed product or attending a live event.

“When you have that direct relationship with the consumer, it enables you to monetise in other ways beyond that basic subscription.”

Browse the sections of the OTT report and download the full PDF version here.

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