|
Contributors | Messages | Polls | Resources |
|
Are Sports Economics to Blame for Declining Viewership?Offering further evidence that sports content is no longer seen as the remedy for declining ratings, Sky CEO Jeremy Darroch said last week that the broadcaster will be far more selective about bidding for sports rights moving forward, as it prioritizes entertainment content. According to Darroch, "Sport is very important, obviously football is very important, but relatively, every day it is less important than it was and that allows us to make more choices about how much we spend, where we invest and where we choose not to." This is a remarkable statement from a company that has built its empire on sports rights, from its licensing of English Premier League soccer in 1992 for what was then the princely sum of £304 million ($380 million.) But Sky is now confronting viewership declines for Premier League matches and is also facing competition for those rights from new competitors, such as BT Group plc (NYSE: BT; London: BTA). (See Is Sports Programming Losing Its Edge?.) BT's economic reasoning is different; the operator's goal is to drive subscriptions for its broadband product by using exclusive content, so it is willing to spend more than just ratings would justify. But whether it will continue to match its share of the record £5.14 billion ($6.4 billion) for Premier League rights bid last year is questionable. BT CEO Gavin Patterson has already said that "if the price becomes too rich, we'll have to walk away." This year has had the Olympics, Brexit and the US presidential elections, so typical viewing patterns were always going to be affected. But it does seem that changes in sports viewership are indicative of a more fundamental shift. According to Sky's Darroch, younger viewers are less willing to invest in watching an entire game, and more likely to track scores on smartphones. Content has to be delivered to multiple devices to reach these viewers, but it's more complicated than just putting everything everywhere. Broadcasters now have to figure out how much content they need to distribute to different devices, and in what form. New research released earlier this month from Ampere Analysis found that younger audiences were abandoning sports coverage in favor of scripted entertainment from Netflix Inc. (Nasdaq: NFLX) and Amazon. The study surveyed more than 30,000 consumers in the US and Europe. Just 14% of those aged 18-24 said they loved sports, while 22% said they loved TV shows. A mere 10% selected sport as their favorite genre across age groups, and of those, 11% were in the 18-24 age group. Analysts also pointed out that audiences for live TV are in decline, and while live streaming is an important part of this trend, even games that are not streamed or shown on social media are dropping viewers. The "Thursday Night Football" games on Twitter Inc. , for example, have made up less than 2% of the overall audience, but corresponding TV ratings have dropped substantially. Ratings fell nearly 20% for Sky Sports' football coverage while BT's Champions League coverage was down 40% for some matches, compared with the previous year. Nor is football the only sport to experience this: NFL ratings are down 11% in the US, and the US Formula 1 Grand Prix attracted just 1.8 million viewers, which was the lowest rating for any Grand Prix in more than a decade. In fact, sport after sport is showing the same trend: the Olympics, baseball, NASCAR, UFC, tennis and college basketball have all registered notable declines in ratings this year. Yet eye-popping figures are spent on television rights for sporting events. Most major sports leagues can charge essentially whatever they want for exclusive rights to broadcast their events, and TV rights have been funding major sports leagues and clubs for at least two decades. Unfortunately, ticket prices have also been rising, making live attendance of events increasingly unaffordable for middle-income families. Could this push for growing revenue have created a generation of children for whom sports just isn't that important? Is it time for TV broadcasters to stop spending so much on sports rights, and for leagues and teams to cut expenses, particularly for top players? Lower ticket costs and TV rights fees might drive greater involvement with the sport within a new generation. At a minimum, leagues and broadcasters might have to consider that they cannot take demand for granted among younger viewers. At the same time, it is important to consider that 2016 has definitely not been a typical year. Apart from the Olympics, it has been an extraordinary year politically, particularly for the US and UK, where most of these figures are coming from. No doubt this has affected viewership, driving greater consumption of news and less of other TV genres. According to Fox Sports, total sports viewing this year is actually up 17% and live sports are still best at drawing big audiences. In 2005, 14 of the top 100 shows were sports shows while in 2015, the equivalent figure was 93. Still, the ratings decline does seem to be affecting even the top sporting events, and it has come in 2016, not 2015. Plus, the volume and availability of OTT content, particularly scripted drama, have increased substantially in the past 12-15 months, and the impact is only just being felt. It will take a few years to recognize if this year's falling ratings are just a blip, or if the sports industry really needs to take a hard look at its economics in a new digital era. — Aditya Kishore, Practice Leader, Video Transformation, Telco Transformation |
Contentious issues that are likely to fuel lawsuits and angry blogs in the coming year.
Content producers are unhappy with the advertising approach and revenues they are getting on Facebook Watch.
OTT video usage is driving the penetration of various Internet connected devices to help view online streams on the larger TV screen.
Major Hollywood studio to trial 'virtual' movie theaters using head-mounted displays.
Network technology vendor Sandvine has found that piracy isn't only hurting network operator profits – each pirated set-top box is also using up 1TB per month in 'phantom bandwidth.'
On-the-Air Thursdays Digital Audio
ARCHIVED | December 7, 2017, 12pm EST
Orange has been one of the leading proponents of SDN and NFV. In this Telco Transformation radio show, Orange's John Isch provides some perspective on his company's NFV/SDN journey.
Special Huawei Video
Huawei Network Transformation Seminar The adoption of virtualization technology and cloud architectures by telecom network operators is now well underway but there is still a long way to go before the transition to an era of Network Functions Cloudification (NFC) is complete. |
|
|
||
Telco Transformation
About Us
Contact Us
Help
Register
Twitter
Facebook
RSS
Copyright © 2024 Light Reading, part of Informa Tech, a division of Informa PLC. All rights reserved. Privacy Policy | Cookie Policy | Terms of Use in partnership with
|