Market Analysis from SportBusiness Consulting
The last decade and a half has seen an explosion in value of sports media rights, with pay-television broadcasters using live sport as a vital way of attracting subscribers.
In the last five-to-six years, developing technology has seen pay-TV providers start to offer phone and internet services, bringing them into direct competition with telcos. In response, telcos have likewise diversified and evolved into content providers, targeting premium sports rights and driving values up further.
More recently, new direct-to-consumer digital operators have emerged, acquiring sports rights for delivery on an over-the-top (OTT) basis, adding to the competition and changing the way consumers watch sport entirely. These new players have been joined by tech giants such as Amazon and Facebook, who have begun to use sport to drive consumers to their wider bundle of services.
Finally, many sports broadcasters have made their channels available online to their pay-TV subscribers, with some – such as ESPN and Turner – developing standalone digital services available to consumers without a pay-TV subscription.
This report looks at the impact of this digital broadcast revolution on the sports media rights industry, including the largest deals made by digital players, the markets are seeing the most impact and case studies of some of the leading players.
While the vast majority of global media rights revenue continues to come from traditional pay-TV broadcasters, revenue from non-linear players has increased threefold in the last two years, from two per cent of all spending in 2016, to six per cent of all spending in 2018.
The diversity of sports and territories featuring the top-10 deals by digital players in recent months is an indicator of how these players are still in a phase of testing the waters. As yet, there is no clear pattern of any of the major digital players looking to dominate either a particular sport, territory, or combination of the two.
A defining characteristic of the emerging digital streaming revolution is that there is no one clear formula driving the changes being witnessed. Speculation has focused for some time on when one or more of the ‘FAANG’s (Facebook, Amazon, Apple, Netflix and Google) will make a major global play for sport media rights. However, to date none of the established tech giants has made such a move. Rather, they have largely tested the waters, picking up rights opportunistically and implementing them as proof-of-concept test cases.
The biggest moves to date, as our data demonstrates, have come from relative newcomer DAZN, whose deals for Serie A and the J League still represent the only examples of a digital player taking premium sports media rights in the property’s home market. This has led to some dubbing DAZN the ‘Netflix of Sport’, however this seems premature as even DAZN’s trailblazing moves are still a drop in the ocean in the context of the $50bn global sports media rights market.
We conclude our analysis with four case studies, where we profile DAZN – the digital-only, specialist sports broadcaster – alongside three other important digital models:
- ESPN+ – the digital streaming extension of an established pay-TV sport channel
- Facebook – the social media tech giant adding live sport to it’s streamed content offer
- F1 TV – the rights holder going truly ‘over-the-top’, with a direct-to-customer offer
The data and analysis in this report was compiled and carried out by SportBusiness Consulting.
For market-leading strategic and commercial advice, based on data-driven insight, contact the SportBusiness Consulting team.