Who will score next in the sports streaming arena?
Sports streaming, as with any streamed content, can be a volatile and fast-changing sector. Sustainable profitability is elusive, and evidence of what works and what doesn’t often seem contradictory. What is clear is the Covid-19 lockdowns saw an exponential growth in the popularity of streaming across the globe with current indications that the switch to streamed products is here to stay.
What trends, then, can we see in the market currently and what can we understand from them?
Five key trends
- Mergers mitigate losses: profitability in sports streaming can be tenuous. Several major players are looking to offset the impact of losses by merging with competitors. For example, Warner Bros and Discovery have already merged and are now looking at a joint venture with BT Sports in the UK.
- Third-party betting: standalone betting is becoming less profitable. Integration of third-party betting partners is one way forward. The advantages of this approach include reducing regulatory burdens, lowering cash and time costs and exploiting the efficiency of specialised betting providers. FuboTV is among the latest to have closed its subsidiary betting business.
- Over-the-top (OTT) platforms: are becoming increasingly popular, particularly for ‘tier-one’ major sports leagues. 2022 saw FIFA launch its FIFAPlus platform and the NBA create its integrated NBA App.
- Big Tech leads the way: Amazon is the top tier example, with an ample sport offering on its headline Amazon Prime Video platform. It has secured deals with the major NFL and MLS sports leagues in the US but has failed to exploit the market for complementary daily content to satisfy devoted sports fans. Google remains a key player through YouTube with Apple looking to gain a foothold too.
- ‘Tier one’ sports pull ahead: the rights to broadcast traditional ‘tier one’ sport and sports leagues (such as the Premier League in England and the MLB and NFL in the US) are becoming increasingly lucrative while lower-tier sports and leagues’ rights remain relatively constant in value. This doesn’t mean a niche provider can’t operate around lower-tier sports – it just requires a different model to that of the big players. The gap between the tier one and lower-tier markets looks set to widen.
Keys to future success in sports streaming
These trends lead to several conclusions:
- Newcomers need to innovate – the market is volatile and careful planning is required to establish profitable operations.
- OTT platforms are the future, providing a comprehensive on-demand service.
- Big Tech will shape upcoming developments and provide an indicator for future trends.
- Ensuring your business model reflects whether the sport is ‘tier one’ or ‘lower-tier’ is essential.
Ultimately, a comprehensive, integrated consumer experience and quick adaptation appear to be the keys to success. The success of broader OTT platforms like Netflix and Amazon Prime Video provide a useful indicator of how to develop a profitable business model in the often volatile sports streaming market.
If your business operates a sports streaming service, Hamlins can provide advice and support on your commercial, digital and media contracts and ensure your operations are in line with global legal and regulatory requirements. We have an established track record of working with sports clients on many of the most recent cutting-edge technological developments.
If you would like a conversation to find out how we might be able to help you, please contact Matthew Pryke.