The broadcast game is changing. In the pursuit of growth, streaming platforms are turning their attention to grabbing sports rights from traditional broadcasters.
Having already bagged the rights to Friday Night Baseball games in the US, Tech giant Apple recently announced a partnership with Major League Soccer (MLS) to show every MLS match exclusively live from 2023.
The deal, which runs for 10 years, is described as an “historic first for a major professional sports league,” allowing fans to watch via a new streaming service hosted on the Apple TV+ app.
“For the first time in the history of sports, fans will be able to access everything from a major professional sports league in one place,” said Eddy Cue, Apple’s senior vice president of Services. “It’s a dream come true for MLS fans, soccer fans, and anyone who loves sports. No fragmentation, no frustration - just the flexibility to sign up for one convenient service that gives you everything MLS, anywhere and anytime you want to watch.”
“Apple is the perfect partner to further accelerate the growth of MLS and deepen the connection between our clubs and their fans,” said Don Garber, MLS’s commissioner. “Given Apple’s ability to create a best-in-class user experience and to reach fans everywhere, it’ll be incredibly easy to enjoy MLS matches anywhere, whether you’re a super fan or casual viewer.”
The growing trend for streaming sport
The Apple/MLS partnership is part of a growing trend, where streaming platforms are looking to retain viewers by expanding beyond their core entertainment content. According to research by Ampere Analysis, the proportion of total spend on sports rights coming from subscription OTT services in the UK, Italy, Germany, France, and Spain will reach 20% in 2022, up from 12% in 2021.
“Serie A’s landmark rights deal with DAZN means that Italy leads the way in Europe with more than half (53%) of the country’s sports spend generated by subscription OTT services by the end of the year,” says Ampere’s Ben McMurray.
If more proof were needed, Amazon was involved in the bidding war for the rights to broadcast the Indian Premier League (IPL). While the streamer ultimately dropped out, it has already spent big on European football and tennis rights. In addition, it has dropped $1 billion a season to broadcast US Thursday Night Football until 2033 and is reportedly eyeing up the rights to show Formula 1 in the US, looking to challenge current broadcaster ESPN along with Netflix and NBCUniversal.
“Highlights, in-play clips and off-field content are worth less than $5 billion, but are growing so rapidly they could eclipse the value of live rights in the 2030s.”
Elsewhere HBO Max has an eight year deal to broadcast the US national team, while Netflix is already diversifying into video games - turning shows into video games (led by the mobile game Stranger Things: 1984) and video games into shows (League of Legends inspired the popular animated series Arcane).
As IBC 365 reported previously, Netflix posted its first drop in subscribers for 10 years, saying that its “relatively high household penetration, combined with password sharing and competition with other big streamers is ‘creating revenue growth headwinds’.”
Anticipating a change in viewing habits
The pursuit of sporting live rights could become the new gold rush for streaming platforms looking to keep hold of subscribers (as well as attract new ones), Delaware North’s ‘Future Of’ report makes an interesting forecast. Having previously predicted the rise of over-the-top TV, esports and legalised sports betting, the latest report suggests that the value of short form video rights (e.g. clips and highlights) could overtake live broadcasts for Gen Z fans.
The Future Of report claims that only a small percentage of Gen Z “will watch a three-hour live sporting event, preferring video highlights on YouTube, TikTok and other outlets, usually curated by social media stars. Live rights are now worth about $50 billion and are forecast to surpass $60 billion in the mid-2020s. Highlights, in-play clips and off-field content are worth less than $5 billion but are growing so rapidly they could eclipse the value of live rights in the 2030s.”
This quote from Ted Leonsis, owner of the Washington Capitals (NHL), Washington Wizards (NBA) and Washington Mystics (WNBA), sounds a warning: “Big sports leagues are nervous: Could we lose a generation because we didn’t give them access to what they want?”
What do they want? “Gen Z will erase the distinction between the real and the virtual,” says the report, “and successful entertainment and hospitality companies will have to learn to seamlessly integrate both worlds.”
So, the broadcast game is changing. It aims to become more personalised, more interactive, and with the switch to streaming platforms, perhaps more accessible and immediate too. After all, what’s the best way to reach fans? Today it might be via a traditional broadcast subscription tied to a living room TV and a set top box. But tomorrow, how about a multi-device streaming service that millions of people already subscribe to?
As the Apple announcement said: “No fragmentation, no frustration - just the flexibility to sign up for one convenient service that gives you everything… anywhere and anytime you want to watch.”
Streamers have been rapidly acquiring sports rights as part of an aggregation strategy focusing on quantity of content. Find out more about this trend in the IBC365 exclusive webinar: The enhanced TV sports experience.