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Social media platforms battle traditional TV broadcasters for the multi-billion-dollar sporting media rights


  • Overview of the global sports market
  • Analysis of the growing dominance of social media platforms in sports media rights acquisition
  • Road ahead for the sporting media rights and viewers’ viewing habits

 

Sports industry as a business has evolved fundamentally over the years from the modest food and collectable stands at stadiums to multi-billion-dollar sponsorships and media rights. And like most industries, technological advancements and cultural changes have brought in a major transformation in the economics of the sporting industry. Few of the digital trends that have pushed the boundaries of the sporting industry are the rise of over-the-top (OTT), the evolution of social media, the emergence of eSport, mobile device domination, the battle of augmented reality and virtual reality. Hence, with all these advancements and new trends in the industry, the global sports market has also grown into a multi-billion-dollar industry and is estimated to be worth approximately $182 billion in total as of 2018, registering a growth rate of approximately 3.3% between 2017 and 2018.

The growth of digital technology is steadily shifting the broadcasting of sports away from the traditional mode of TV broadcasting to new modes like live streaming, over-the-top delivery (OTT), mobile applications and on-demand. These along with the emergence of smartphones, social media and improved internet connectivity has changed the way spectators consume sport content. This shift in trend to new modes of distribution for content is reflected on the battle between stadiums and television screens to grab spectators’ attention. Additionally, the projections as per a PWC’s report states that the media rights revenue will surpass the gate revenue by 2020.

Tech giants like online streaming sites and social network channels are the latest entrants in recent years. The platforms like Amazon, Facebook and Twitter are expanding beyond their respective core businesses and are moving to sign up for media rights for the major sporting events, this is done in a bid to increase user engagement and thereby, attract greater advertising revenue. The deals between sporting leagues and tech giants are surging both in terms of value and frequency. Big deals and moves from tech companies will come in the next few years between 2021 and 2025 (as per reports by Variety on details for expiry of major rights in the sporting world) when most of the major sports broadcasting contracts expire and are up for renewal.

Moreover, some of the notable streaming deals signed by the three tech giants; Twitter, Facebook and Amazon in 2017 are mentioned below.

In 2018, Facebook may have lost its bid for a five-year media rights on the Indian Premier League (IPL) with its $610 million bid, but, on the other hand, it signed an exclusive three-year media rights for the top Spanish football league La Liga for the South Asia region for an undisclosed amount. In addition, one of the biggest sporting leagues, the English Premier League soccer matches has been secured by Amazon. It signed for the rights to broadcast 20 live Premier League football matches from 2019 to 2022 on its Prime services for an undisclosed amount. The tech giants Amazon, Facebook, Twitter and YouTube with their huge subscriber base and deep pockets can easily bid for a multi-billion-dollar price tag on media broadcasting rights. The tech giants have generated much hype and interest in the sports media communities and are revolutionising the well-established model for sports broadcasting.

Technology and connectivity have shifted our assumptions on how entertainment and media work. The fact is, a majority of the cable companies are fighting on their decline of viewership (a report by Business Insider suggest that cable companies on an average are losing 3% of their subscribers annually), even those that are not losing viewers in millions will not be viable in the long-run. This trend is not just because of price, competition or programming, but is more than that. There is a paradigm shift and viewers want to access only their preferred programs on their mobile devices and are not interested in paying for channels that they do not want to watch. Social media has educated users on a customised experience, and they have been able to deliver through the generation of user behaviour data from their platforms. The same customised experience is also expected by viewers from other broadcasting and streaming platforms. The truth is that audiences are still in plenty, but the demographics are changing with the rise of all-important millennial viewers. How the broadcasters embrace the viewing habit of this new generation, while also embracing the viewing habits of the previous generation? This will be a challenge for both the traditional TV broadcaster and social media platforms.

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