Consultants like Allied Market Research forecast that the global OTT market will grow by an annual minimum of 17% until 2025 to reach an approximate turnover of 330,000 million dollars. The growth in Internet broadcasts and television has been associated with a decline in cable television customers. Analysts have unanimously found that the consumer is rejecting subscriptions to packages and prefers to contract fewer but more personalised services that are more in keeping with their requirements. OTT (over-the-top) services are online broadcasts that dispense with traditional operators for both the control and distribution of content. In the United States, CTV (Connected Television) audiences are already as high as 45.7 million among Generation Z; 56.5 among millennials; 48.5 among Generation X and 32.8 among baby boomers.
Digitisation has had a strong effect on many sectors, such as Airbnb on tourism, and Uber for urban mobility. The entertainment industry has also undergone major changes, particularly in the music industry, but until now sports have remained on the side-lines of such transformation, although cable television had been detected to mainly be sustained by live broadcasts of sports and other specific events like the Academy Awards Ceremony, two products whose audiences are decreasing year by year as traditional providers have lost subscribers and hence their ability to make their content profitable.
At the same time, major Internet television companies such as Amazon Prime and HBO+ have joined the battle for sports broadcasting rights in order to increase their subscribers. A recent example is Amazon Prime and its negotiations with the NFL. Even actual athletes are launching their own OTT platforms to offer their content as part of a trend that began with the big clubs but has quickly spread to all levels and federations. In the United States there is a rising phenomenon whereby amateur teams have made it so their fans can watch all their games and even achieve new sources of revenue.
However, the arrival of OTT has begun to paint a new picture that may affect not only the media sector that covered such events, but also the organisation of the competitions themselves, as well as re-launch of minority sports or coverage for market niches. The paradox has arisen that, as the sports rights market fragments, opportunities for growth continue to emerge. According to a 2019 report by PwC, the broadcasting rights sector had grown more than any other in the entire industry since 2017. It is precisely the ownership of these rights that has caused a slower shift than in other areas of the economy, but in ten years’ time nothing is likely to be the same. The change suggests that quality viewers who are focused on a single product will be sought more than mass audiences.
The vast majority, 80%, of people who cancel cable subscriptions in the United States say they do so because of the high price they pay. With a decrease in the number of subscribers, these companies can no longer afford the prices they were paying for rights, which will lead to a shift in the source of broadcasts, which will most likely be in the hands of the leagues or organisers, or maybe the actual clubs through new associations or competitions. The point is that, in the United Kingdom, a Quantum Market survey showed that 96% of football fans are willing to pay more for OTT broadcasts that will give them a more personalised experience. Until now, cable television companies have grouped content into packages to raise the price of the product, but users have not been watching all of the channels they pay for. ESPN, one of the most established channels, has lost more than 10 million subscribers in the last decade.
However, this company itself is a paradigmatic example of the shift in trends. These losses of traditional subscribers are being compensated by the twelve million that ESPN+ has gained since it launched its streaming service in 2018.
These circumstances, added to the technological progress that allows access to broadcasts anywhere and from any device, have led to such a paradigm shift that analysts are now directly using the term revolution. Digital interfaces are simpler and offer more features than conventional television. Audience measurement is accurate and user interaction, as well as data, can be used to personalise both content and the advertising that helps to generate profits. Many clubs have already segmented the content they offer. There are always going to be big events, but aspects related to the athletes, news, documentary and archive footage have also found a place in OTT services that can be used to control their narrative, giving the fan a more refined and specialised product while also making them even more loyal to the club.
2020 has been a key year for the promotion of OTT sports broadcasting. The holding of events behind closed doors as a result of the pandemic means these services have been the only way to reach the homes of fans whose interest has remained intact despite the circumstances. In this context, Pixellot have been key drivers of these new broadcasts. In Scotland, all games in the second tier Championship are broadcast internationally using Pixellot cameras, thanks to an agreement signed before the pandemic. Another agreement has also been reached to show all games in the Irish men’s and women’s top flights, the SSE Airtricity. In Argentina, the 176 games in the National Volleyball League, from which teams are promoted to the top league, were broadcast en masse in a tournament being played behind closed doors and more leagues in Poland, South Korea, the UAE and Africa are to follow.
Another Example of a large-scale OTT operator who also works with Pixellot technology is FloSports. Its first live broadcast was in 2006, and since then it has secured the North American rights to several International Cycling Union (UCI) competitions, gymnastics, athletics, horse racing, rugby, professional bowlers, the NBA Junior League and wrestling. These are all niche sports. Analysts so not expect this strategy to be an immediate success, but in the long term they consider it to be the best way to gather loyal, active fans who will become their much sought-after loyal subscribers. The data on such market behaviour is already available for the World Surf League, which since it began to broadcast its competitions on Greenfly has witnessed a one million increase in engagement with the content shared by professional surfers.
The only obstacle preventing this new kind of market from taking off is the reliability of platforms. When CBS broadcast the Super Bowl it was watched by 5.7 million users per minute, 65% more than the previous year. But there were technical problems with the application, which ruin the whole experience of a live broadcast. The big challenge is to reduce latency and buffering.
However, thanks to AI and machine learning the changes in the market for the broadcasting and consumption of sport seem irreversible. The new spectator will have all sport within their reach and will be able to watch it in a totally personalised manner from the lowest to the highest levels, using the same kind of technology both to follow the big stars and their friends and relatives who compete in amateur sports. The technological revolution is heralding a new era that not so long ago seemed like a utopia: that all sporting events of any level held anywhere in the world are available for live viewing from anywhere on the planet.
CATEGORY: MARKETING, COMMUNICATION AND MANAGEMENT
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