THE SPORTS STREAMING ECOSYSTEM: How sports are going over-the-top and eroding the last bastion of pay-TV
This is a preview of the Business Insider Intelligence Sports Streaming Ecosystem premium research report. Purchase this report here. Interested in getting more content like this from us? Check if your company already has BII Enterprise membership access.
Live sports content is one of the strongest and last-remaining drivers of value for traditional pay-TV — for both viewers and advertisers alike. But like entertainment programming, live sports content is migrating over the top (OTT) to streaming services — meaning that sports fans can increasingly access sports programming without the need for a pay-TV subscription or watching on linear TV channels.
Streaming access to sports programming has been led by a diverse range of platforms and services, including:
Skinny bundles (e.g. Sling TV, YouTube TV) that carry live sports programming distributed by traditional TV networks; Media-branded OTT services (e.g. ESPN+, CBS All Access, NBCUniversal's Peacock) that feature live sports where respective networks hold rights; League-branded services (e.g. MLB.TV, NBA League Pass, NFL Game Pass); Digital startups like DAZN that typically cater to more niche fan bases; Tech platforms (e.g. Amazon, YouTube, Facebook, Twitter, Twitch) that have each acquired live game rights; Social media platforms (e.g. Facebook, Twitter, YouTube, Snapchat, TikTok) that are increasingly partnering with both leagues and broadcasters to to develop and distribute highlights or original short-form programming around live sports events.
So far, the majority of prior dealmaking with digital players has been limited and experimental — there's too much value still tied to the status quo for leagues to hand over exclusive rights to digital partners just yet. But we expect that leagues will increasingly look to form partnerships with tech and social platforms for opportunities to reach young people, who are more likely to be cord-nevers or cord-cutters. In the meantime, OTT platforms that carry sports offer incremental, new-in-kind opportunities to reach sports fans in more targeted, interactive, and hyperengaging ways that complement or even surpass the typical capabilities of linear broadcast. In The Sports Streaming Ecosystem, Business Insider Intelligence examines how the OTT sports landscape is expanding and fragmenting, and how the fan experience is evolving on digital services and devices. We discuss how and why traditional TV relies on live sports content; how some sports rights packages have been allocated to digital platforms; and how digital players are expected to vie for live sports rights packages as current rights deals are set to expire. We further lay out the expanding range of OTT video services and platforms that currently distribute live sports and other sports programming. In each section, we explore the evolving roles of existing and emergent players within the OTT sports landscape across both free and paid services, live and on-demand streaming, games or matches and ancillary content. Additionally, this report features a section on how we expect the coronavirus pandemic to impact live sports programming and advertising spend through 2020. In it, we discuss how the unprecedented lack of live sports programming will impact US ad spending this year — in particular on TV — by examining how sports advertisers have responded to the crisis so far, and how they anticipate changing their spend over the next 12 months. Second, we discuss early strategies that leagues and broadcasters have taken to fill the programming void — and how we expect these changes to familiarize consumers with digital, on-demand access in ways that could accelerate longer-term shifts to sports streaming. The companies mentioned in this report are: AB InBev, Amazon, AT&T, Bleacher Report, DAZN Group, DirecTV, Dish Network, English Premier League (EPL), FaceBank Group, Facebook, Fox, International Cricket Council (ICC), Major League Baseball (MLB), Major League Soccer (MLS), NASCAR, National Basketball Association (NBA), National Collegiate Athletic Association (NCAA), National Hockey League (NHL), NBCUniversal, NFL, PGA Tour, Procter & Gamble, Snapchat, TikTok, Twitch, Twitter, The Walt Disney Co., WarnerMedia, World Wrestling Entertainment (WWE), YouTube. Here are a few key takeaways from the report:
While sports fans are the stickest pay-TV subscribers — and therefore the least likely to cut the cord — streaming platforms are gaining favor among some sports fans. Among US internet users who regularly watch sports, 79% subscribe to traditional pay-TV, compared with just 61% of sports nonviewers, per Altman Vilandrie & Co. But sports fans increasingly view streaming alternatives as valuable complements or cost-effective substitutes. Among US sports fans who use a streaming service to access live sports, 57% do so to get access to sports that aren't available on TV, and 38% do so because "it's less expensive than pay-TV," per Verizon Media/Sapio Research. The indefinite cancellation of live sports due to the coronavirus pandemic could exacerbate cord-cutting in the US in 2020. While pressure on consumer discretionary spending will be the most likely factor causing people to ditch pay-TV, the prolonged absence of live sports programming in 2020 could have at least some influence on cord-cutting in the near term: 11% of respondents who had either already cut the cord or were planning to do so said their most important reason was the postponement of live sports, according to Business Insider Intelligence's Coronavirus Consumer Survey, conducted on March 31, 2020. US live digital sports viewers have nearly doubled since 2018 and will become a growing proportion of total live sports viewers in coming years. This year, there will be 36.5 million digital live sports viewers in the US, up 97% from 18.6 million in 2018, according to eMarketer's first forecast for US live sports viewers and digital live sports viewers. Further, digital live sports viewers represent 11.0% of the US population, and are set to grow to 14.2% by 2023 — that's compared with total live sports viewer penetration of 46.3% in 2020, which will grow only slightly to 46.9% by 2023.
In full, the report:
Analyzes the market forces, consumer preferences, and changing consumption habits that have led pay-TV and traditional TV networks alike to depend on live sports programming. Discusses how leagues could reallocate sports rights to digital players as existing rights deals expire starting in 2021 — and presents complete grids displaying existing US broadcast sports rights deals as well as digital sports rights deals (including some global digital rights deals). Identifies and examines the key players in the OTT sports landscape, including skinny bundles (or vMVPDs); media, league, and startup pure-play OTT services that offer sports programming; tech giants; and social media companies — and presents complete grids displaying the existing players and offerings within each group. Explores how digital platforms are enhancing or changing sports broadcasts and the overall fan experience through new features. Contains 77 pages and 40 figures — including 9 landscape grids.
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THE AVOD ECOSYSTEM: As cord-cutting shifts the revenue model of media companies, the ad-supported streaming space is poised to take off — here are the key players brands need to know, and how to work with them
Summary List Placement Insider Intelligence publishes thousands of research reports, charts, and forecasts on the Media,...Summary List Placement Insider Intelligence publishes thousands of research reports, charts, and forecasts on the Media, Advertising, and Marketing industry. You can learn more about becoming a client here. The following is a preview of one Media, Advertising, and Marketing report, the AVOD Ecosystem. You can purchase this report here. The video streaming marketplace has expanded to include a widening set of ad-supported OTT video platforms, across both free and hybrid (subscription-based and ad-supported) offerings. And, as these services grow, ad-supported OTT will become an increasingly important channel within media plans as a way for ad buyers and brands to add incremental reach to their linear TV campaigns. A wave of new movement in the ad-supported streaming video space has accelerated over the past 12 months: In 2019 and early 2020, media companies including ViacomCBS, NBCUniversal, and Fox Corp. have each acquired free, ad-supported TV services, including Pluto TV, Xumo, Vudu, and Tubi. Meanwhile, after Disney gained majority ownership and full operational control of Hulu last May, NBCUniversal and AT&T's WarnerMedia each announced plans to launch their own ad-supported SVOD services — Peacock and HBO Max, respectively — which are each forthcoming. (At launch, HBO Max will be ad-free, but will have an ad-supported tier sometime in 2021.) Further, CTV device-makers including Roku, Samsung, and even Amazon have increasingly emphasized their own advertising inventory. The majority of ad sales that go to each company come from CTV inventory sold on other publisher apps carried on their devices: Roku and Amazon each take a 30% cut of ad sales from inventory sold on partner apps. But a portion of advertising revenue has also resulted from increased viewership on their own free AVOD platforms that are integrated into and prominently displayed on their devices, including The Roku Channel, Samsung TV Plus, and to some extent, Amazon's IMDb TV. OTT video advertising offers some benefits over linear TV to advertisers looking to reach audiences on premium video content — but brands and media buyers still face several frustrations with advertising on ad-supported OTT. OTT video advertising is considered to be more efficient and less wasteful compared with traditional TV because it's more addressable — meaning it has more granular, audience-based targeting capabilities. But advertisers must also navigate several challenges that will impact their strategies in this area. These challenges include considerable fragmentation in the long tail, low service differentiation among some AVOD services, a lack of standardized measurement, and a confusing assortment of different ways to buy the same or similar inventory. In The AVOD Ecosystem, Business Insider Intelligence examines the expanding range of major, growing, emergent, or forthcoming ad-supported OTT services in the US. We look at how ad spending is growing on ad-supported streaming, based on the rise of connected-TV advertising, and why cord-cutting is likely to drive additional spend. We further assess the state of consumer interest in AVOD in the US, in terms of the share of time spent with streaming video and user growth, and identify how multiple factors including the coronavirus are boosting usage. Finally, we discuss how ad buyers and brands are approaching these services, and outline emerging opportunities for advertisers as well as ongoing challenges. We focus our discussion of AVOD on the free AVOD services (e.g. Tubi, Pluto TV), hybrid SVOD/AVOD (e.g. Hulu), and CTV services (e.g. The Roku Channel). Given its size and importance, this report also includes discussion and figures about YouTube. For the purposes of this report, we exclude analysis of other platforms that fall under the technical definition of ad-supported OTT, including: social platforms that feature ad-supported digital video like Facebook, Twitter, Snapchat, and TikTok; livestreaming video platforms like Twitch; and skinny bundles (or vMVPDs) like Sling TV and YouTube TV. The companies mentioned in this report are: AB InBev, AT&T, Amazon, Capital One, Disney, Eko, Facebook, Fox Corp., General Mills, Hulu, L'Oreal, NBCUniversal, Netflix, PepsiCo, Procter & Gamble, Quibi, Roku, Samsung, Snap, State Farm, Taco Bell, TiVo, TikTok, Twitch, Unilever, Verizon, ViacomCBS, Vizio, Walmart, WarnerMedia, YouTube. The ad-supported OTT platforms mentioned in this report include: CBS All Access, Crackle, ESPN+, HBO Max, Hulu, IMDb TV, Peacock, Plex, Pluto TV, Quibi, STIRR, Samsung TV Plus, The Roku Channel, TiVo+, Tubi, Vudu, WatchFree, Xumo. Here are a few key takeaways from the report: A large part of video advertising that goes to ad-supported OTT platforms is driven by connected-TV advertising sales, since the majority of viewing on these platforms happens on TV screens. In 2020, US advertisers will spend $7.99 billion on CTV advertising, up from $6.38 billion in 2019 — and that spending will surge to $13.62 billion by 2022, according to an eMarketer forecast updated in June. Of total ad spending on CTV, the overwhelming majority of spend comes from video ads, with a small remaining portion going to display ads that appear on CTV platform interfaces. To reach a growing population of cord-cutters and cord-nevers, agency ad buyers and brands will increasingly need to supplement their TV ad campaigns with OTT video inventory. The vast majority of advertisers are already using digital video to add incremental reach to TV ad campaigns: 78% of US marketing and agency execs surveyed in October 2019 said that they buy digital video inventory to TV ad campaigns to add reach, according to a FreeWheel survey conducted by Advertiser Perceptions in October 2019. That incremental transfer of ad dollars into OTT will grow in 2020 and into 2021, particularly as TV advertisers expect to dramatically reduce TV ad spend and shorten upfronts commitments. As ad buyers prepare for a significantly disrupted TV upfront market in 2020 amid uncertainty around the return of live sports and the availability of other premium programming, half (50%) indicated that they believe they can make up necessary GRPs from TV — or gross ratings points — using OTT, CTV, or digital video advertising inventory, according to a recent Advertiser Perceptions survey of media-buying executives. In full, the report: Analyzes consumer usage and preferences around ad-supported OTT services. Discusses how ad spending is growing on ad-supported streaming platforms, alongside the rise of connected-TV advertising. Identifies and examines the outlook for key players and purveyors of ad-supported premium video, including hybrid AVOD/SVOD services (e.g. Hulu, CBS All Access), free AVOD services (e.g. Pluto TV, Tubi), and connected-TV platforms (e.g. The Roku Channel, Samsung TV Plus). Explains how advertisers are approaching AVOD services, and how they can navigate ongoing challenges in the buying process. Contains 54 pages and 19 figures — including 3 landscape grids. Interested in getting the full report? Here's how you can gain access: Join other Insider Intelligence clients who receive this report, along with thousands of other Media, Advertising, and Marketing forecasts, briefings, charts, and research reports to their inboxes. >> Become a Client Purchase the individual report from our store. >> Buy The Report Here Are you a current Insider Intelligence client? Log in and read the report here.Join the conversation about this story »
Despite challenges, the N.B.A. continues to build its e-sports program, saying it generates sponsorship revenue and...Despite challenges, the N.B.A. continues to build its e-sports program, saying it generates sponsorship revenue and provides valuable data on viewing habits of cord-cutters.
This story was delivered to Business Insider Intelligence Digital Media Briefing subscribers earlier this morning. To...This story was delivered to Business Insider Intelligence Digital Media Briefing subscribers earlier this morning. To check to see if you already have access to Business Insider Intelligence through your company, click here. Last week, the NBA and Microsoft announced a new multiyear partnership aimed at transforming the digital fan experience through a new direct-to-consumer platform. Microsoft and NBA Digital will create a Microsoft Azure-powered streaming app that delivers personalized game broadcasts and could contains a range of social and gaming-like reward opportunities (e.g. personal achievements, loyalty points) for fans. And as part of the partnership, Microsoft will become the marketing partner of the NBA Draft Combine beginning next season, and an associate partner for future events, including NBA All-Star, MGM Resorts NBA Summer League, and the WNBA All-Star. Two forces are likely motivating the NBA and Microsoft's development of the new AI-driven direct-to-consumer streaming platform: A need to tailor the viewing experience to an increasingly global NBA audience. The NBA's popularity outside of the US brings with it a diverse fanbase: For example, more than 35% of visitors to NBA.com come from fans outside of North America, per Forbes. While this creates plenty of opportunities, it also presents a challenge as the NBA must account for a more diverse array of interests, preferences, and habits in order to properly serve fans across different markets. Microsoft's AI and machine learning expertise should help the league more easily achieve its goal of personalizing the fan experience at scale. In particular, Microsoft's Azure platform should be able to leverage the NBA's vast array of data sources and its video archive to create a more personalized and localized experience for fans worldwide. A need to match the shifting viewing habits of younger basketball fans. Most fans under the age of 30 watch significantly less linear TV than older groups, and the digital programs they do watch are often shorter in length. To adapt to those shifting consumptions habits, not only is the NBA increasing its investment in a medium that appeals to younger people, but it's attempting to create an experience that surfaces the exact content a given fan is interested in, whether it be fantasy basketball content, sports betting content, or gaming content, as fast as possible. The surging popularity of short-form content on social platforms like Snapchat and TikTok could provide the NBA with a model of how to appeal to this younger demographic. The NBA and Microsoft may be looking to create an experience that resembles gaming platforms — and if the recent esports successes of other pro leagues are any indication, that will excite fans. The NBA first experimented with a gamified approach to live game broadcast during last year's NBA finals, when ESPN tested a Twitch-like digital telecast in its app, which featured on-screen hosts and emojis-like symbols flashing on the screen. And with the coronavirus sidelining live sporting events, leagues have had to dive deeper into gaming to replace traditional sports. For instance, the NBA hosted a 2K Player tournament in April, which aired on ESPN, ESPN 2, and various social channels with a decently strong reception with 387,000 viewers. Similarly, NASCAR, the MLS, and the NHL have also launched esports programming in recent weeks. And given that NBA fans skew male, young, and are known to spend money to support their teams — qualities shared with most esports fans — the group could be particularly receptive to the integration of gaming-like features into their broader NBA viewing experience. Want to read more stories like this one? Here's how to get access: Business Insider Intelligence analyzes the media and marketing industry and provides in-depth analyst reports, proprietary forecasts, customizable charts, and more. >> Check if your company has BII Enterprise membership access Explore related topics in more depth. >> Visit Our Report Store Current subscribers can log in to read the briefing here. Join the conversation about this story »