Is direct-to-consumer sport the future?

19.02.20

by Ben Tobin

As an increasing number of sports organizations and federations introduce a direct-to-consumer service, we explore why this is happening – and what is vital for the industry to consider

19.02.20

by Ben Tobin

As an increasing number of sports organizations and federations introduce a direct-to-consumer service, we explore why this is happening – and what is vital for the industry to consider

As viewing habits continue to evolve, it’s predicted that direct-to-consumer (DTC) services will transform the way sports, media, and other rights owners appeal to their fans. Deltatre’s Where the Money Is Going: The Future of Sports Entertainment report, published last year, revealed that sports operators worldwide are now spending 15% of their total budgets on OTT, meaning that by 2021 more than $6.8 billion will be invested in the OTT tech stack in North America alone.

Recently, for example, NBA TV became the first linear sports league network to launch a direct-to-consumer subscription product to the U.S. market. What’s more, there has been lots of speculation about the direction the English Premier League may take in years to come.

With many major U.S. sport’s engaged in media rights negotiations (across both linear and digital, globally) there are tremendous opportunities to both launch a direct-to-consumer OTT platform - to create direct relationships with customers and own valuable data - as well as forge creative partnerships with distributors.

One of the primary goals here is to achieve the most extensive reach with casual fans and who may not be daily core users of such content or product.

So, we have to ask ourselves is this something we are going to see more of? And if so, how can key decision-makers, rights owners and rights holders - indeed all members of the industry - maximize their value and benefit within this ecosystem?

A shift in content consumption

We are witnessing what could be the beginning of a significant shift in content consumption. Media rights owners and rights holders will need to understand how they can extract the maximum value out of their distribution strategy.

Ultimately, this starts with using technology to build a loyal audience across linear and direct-to-consumer OTT, not just one or the other.

Of course, using a DTC service enables sports organizations to appeal to and engage with their fans all-year-round – not just on game days - and wherever they are in the world. It means that content, such as behind-the-scenes, highlights, exclusive interviews, and archived historical moments, can all act as an engagement driver.

“What’s particularly critical is for operators to consider how they collect, manage, and use consumer data across all viable touchpoints,” said Jeff Volk, Head of Business and Revenue, Americas at Deltatre. “More and more, they need this data to truly understand their audiences and to deliver unforgettable, multi-screen experiences that are personalized, curated and focused on what their customers have demonstrated that they want. Refining this experience based on what their users are telling them is crucial, and more tools exist than ever to assist with best practices.”

A move away from the traditional

Of course, the advantages for the user of a direct-to-consumer service are clear - greater freedom, choice, and flexibility in terms of the content they want.

Some sports properties may, for the time being, continue with a distribution strategy that they have pursued for years. However, there’s no doubt that OTT streaming will only continue to rise in popularity.

Regardless of the way that these strategies are implemented, one thing that has become abundantly clear is that sports organizations are evaluating where and how they can begin to make a move to D2C. Failure to do so leaves too much uniquely unlockable value on the table. Those who have long-term, legacy deals with more traditional services may have to be particularly clever in the ways they do this, of course.

At Deltatre, we have long anticipated this global trend. We have invested in building proprietary products and services that can serve as both end-to-end solutions and as systems integrators that leverage and integrate existing partners, vendors or relationships.

We are ready for this transformative shift in both viewing behaviour patterns that allow fans to consume content on their terms - when, where, and how they choose.

Great opportunities for not only the major sports but also the next tier

This is where sports leagues, including newer or niche organizations with smaller fan bases, can grasp the opportunity and potentially grow their following around the world. Lesser-known sports without major broadcasting deals would naturally be free from the need for linear broadcasters to fit the sport into a packed evening schedule, for example.

Therefore, they can be more creative in how and to who they present the sport on many levels.

This also gives greater control of the viewing experience and gives a sense of depth that under-covered sports may not have previously received. Naturally, this also greatly increases any potential monetization and marketing possibilities.

For example, following on from the successful Women’s Football World Cup in 2019, the Football Association launched an OTT service aimed at capitalizing on the increased exposure the women’s game has experienced (12 million people in the U.K. viewed the semi-final). It will show more than 150 live WSL games during the 2019/20 season.

Similarly, in the U.S., NWSL has made great strides with its new rights deal, which has capitalized on the U.S. Women’s World Cup win, with particular emphasis on star players and personalities.

On this topic, Steve McCaskill writing for Broadcast Sport earlier this year highlighted the success the WWE has had in turning away from pay-per-view and towards OTT, which has meant the federation no longer needs to worry about fluctuating significant usage/viewing event sign-ups, and cable partner promotional support. It has also been able to have greater oversight of its core user acquisition and retention strategies.

Whatever happens, the future of sport will be transformative to the way the world consumes content.

What do you think? Join the conversation on Twitter or LinkedIn over on @deltatre.

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