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Micro management | Why the NBA has launched fourth-quarter live streaming

Micro management | Why the NBA has launched fourth-quarter live streaming

Posted:
28 Mar 2018
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  • NBA will allow fans to watch portions of games from next season
  • Tests over price and 'moments' to continue over next few months
  • Commissioner Adam Silver confident other sports will follow suit

The NBA has confirmed it will become the first US league to allow fans to watch portions of games for a small fee. 

These micro-transactions – for non-national League Pass games only – will officially be made available at the start of next season.

Tests are being carried out on price points and 'moments' for the remainder of this campaign. As leaked on social media, the fourth quarter of a recent game between the Miami Heat and Oklahoma City Thunder was made available for 99 cents. 

Other fourth quarters have been sold for $1.99 and $2.99 to gauge interest. Entire single games are currently available to stream for $6.99 on NBA League Pass.

The announcement was made at the launch of Turner Sport's new OTT streaming service, Bleacher Report Live, which will launch this summer following a free trial from April 7. Included in the app will be an updated NBA League Pass, for both single and partial games. 

NBA commissioner Adam Silver spoke to reporters, including SportBusiness International, at the B/R Live launch in New York City to discuss the thought process behind micro-transactions.

What has been the response since news of the tests leaked on social media?
We weren't looking to create a story but the response is very positive. We're a little bit limited from a technical standpoint on the trials, in that we can only do it in the fourth quarter but I'm more focused on the entire game.

There is no doubt that people will see on social media that there is an exciting finish to a game so might be more inclined to watch the last five minutes. But I also think there is going to be an audience for people early in the evening who know that for whatever reason they only have time during the first or second quarter to watch a game but don't think it's a good consumer proposition to buy a whole game. 

So I'm looking forward to experiment in the first half of the game as well.

It's given fans more options, which has been received positively. When we had the League Pass on television we were limited by cable-box infrastructure with what we could do. OTT gives us a lot more opportunities to create more packages for games.

Are micro-transactions particularly conducive to the NBA – and do you think other sports will follow suit?
I don't think micro-transactions are any more conducive to the NBA than to other sports. What is interesting about our telecasts – and it's the same for other sports – is that we have a two-and-a-half hour window but on TV the average viewer watches 50 minutes. So we know most fans are not watching an entire game and I'm sure they have similar statistics for other sports. 

We recognise that attention spans are shorter and that is something that we are all focused on. We reduced this season the number of time-outs by four and we continue to experiment with our format because we recognise that when we go to commercial breaks or half-time that we lose viewers because they have other options and we have to bring them back. I think this concept of micro-transactions will catch on with all programmers.

Do you think these micro-transactions could hurt NBA League Pass subscriptions?
I don't. It is part of the reason why we test these propositions. The advantage we have online is that we can test and respond in real time. We can set price points and experiment with different ones. If we get a higher yield from a different price point, whether it's higher or lower then we can readjust.

What is the thinking behind the current price points?
We are experimenting with $2.99, $1.99 and 99 cents. It shows what I know – I would have priced the 99 cent pricing at $1, but the research and consumer testing shows that 99 cents makes a big difference in consumer behaviour. I think there is something to be said for a 99-cent price point. What exactly you get for that we have to figure out but I think there is something magical about that number.

In certain cases [different prices were] for the same length of game and we wanted to see what the yield would be. But it's not just overall yield – part of our focus is on the engagement of the fans so we can see numerically how many fans will take advantage of the offering, not just the revenue yield.

We didn't begin this just as a business opportunity – it is also an opportunity to engage more fans. Part of it is the hope that fans who might not be willing to commit to a full season will test the proposition and like it so much that rather than buying several individual games they decide it’s a good consumer proposition to buy the all-you-can-eat package and get the full season. 

Part of it is the same way a retailer would sell you something just to get you into the store: that is a little bit of the notion behind micro-transactions.

What other types of micro-transactions do you think will follow?
Micro-transactions begin with portions of the game but presumably we can offer different data fields, we will see where sports betting goes for fans, odds for fans, merchandise that you can acquire...

I think this is a situation where we can go the opposite direction of what is happening in the virtual world where you are virtually buying jerseys and add-ons for your players. Here in the real world you can do the same type of transactions. 

And I think you have a generation that is used to being up-sold throughout a [video] game and that creates more opportunities for people. You have a captive and engaged audience so why not give them more options the same way you would in an arena?

I'm not in the food-delivery business but presumably you could have an arrangement with a local provider and someone could order a pizza while they are watching the game, too.

In Europe where sports betting is legal, people can watch streams of games and bet as they are watching them. That could conceivably be another form of micro-transaction.

Much of the sports betting has moved to in-play, which is why people want to watch live feeds. People want to watch for particular transactions: how many points a player will get in a particular quarter or whether a player will make the two free throws. These are all potential additional forms of engagement for viewers.

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