As the ultimate live experience, sports are a driving force behind many subscribers’ decisions to choose between cable TV and OTT. Every time a household cancels cable service, ESPN loses about $8 a month1. As streaming video has continued to rise, ESPN has seen a decline from 100 million households in 2011 to 87 million households in 2017. Which is why it’s not surprising the Walt Disney Co., the company that owns ESPN, is offering an OTT video streaming edition for ESPN fans at $4.99 per month for the app.
Coveted Live Sports OTT Markets: North America & Europe
For live sports, the United States is a coveted market. For example, the massive U.S. population combined with multi-cultural sports fanaticism has made it a battle ground for coverage of the English Premier League, Tour de France, rugby, and motocross, to name a few. In fact, loyalty to live sports viewership in the United States is one of the primary reasons customers have not cut the cord, with 81% of sports fans subscribing to pay TV and 91% stating they subscribe to pay TV for access to games2. However, the relationship pay TV operators have with sports fanatics is tenuous. 82% of pay TV subscribers stated they would cut their subscription if they did not need it to access live sports and the average sports fan is willing to pay $23 per month to access live sports.
The European linear OTT pay TV market reached 7.4 million subscribers at the end of September 2017 with an impressive 13% growth over the previous quarter. According to research firm Dataxis, sports fans represent 25% of the total linear OTT subscribers with Germany as high as 35% being sports subscribers. France and the U.K. fall not too far behind at 25% and 15%, respectively, suggesting that Western European countries are dominating the sport OTT market3.
Recently, there has been increased activity in the European sports streaming market. In 2016, Discovery Communications (the owner of Eurosport) partnered with streaming specialist BAMTech to integrate premier content to deliver to more users and their devices across Europe. BAMTech also has long-term deals with sports organizations such as the Olympic Games and the National Hockey League (NHL)4. A few of the most popular European OTT sports platforms include Bein Sport Connect, Eleven Sports, and DAZN. DAZN, an OTT subscription video streaming service headquartered in the UK, has recently entered the Italian market to provide multi-platform broadcast rights to 114 Serie A matches for the next three years. This deal is labeled as the first occurrence of a live and on-demand streaming service being granted private Serie A rights in Italy5.
To make the switch to OTT, live sports applications and services must be comparable to pay TV on quality, ease of access and the content being offered. Niche content is becoming more accessible because of the reduced cost and complexity of delivering multiple versions of OTT. While the Superbowl carries the highest bounty for advertising, costing $7.7 million for 30 seconds (an increase from $2.7 million in 2017), it is mobile where the true gains in advertising can be made. Mobile will contribute $72.6 billion to the global ad economy between 2017 and 2020 which is more than the total amount to be spent due to the cannibalization of desktop internet.
Recent Highlights and Advancements in Live Sports OTT
- Amazon agreed to stream Premier League matches in the U.K. with 10 matches shown to Amazon Prime members on two separate days for three seasons beginning next year. Amazon also secured the rights to broadcast the US Open Tennis Championship in a five-year deal starting with the 2018 US Open
- Formula 1 launched its own OTT service to show races to more than 20 markets priced at $8-$12 per month. F1 TV will offer commercial-free live streams for each race along with multi-language commentary plus access to 20 driver on-board cameras
- Disney launched ESPN+ which includes live games from MLB, NHL, MLS, golf, cricket, rugby and tennis for $4.99 per month. Notably, the application is not a full service option for cord cutters as it does not offer highly publicized games
- CBS launched CBS Sports HQ, which offers 24-hour streaming coverage of sports news, highlights and analysis for smartphones and tablets
- Turner Sports launched its own direct-to-consumer live sports service, Bleacher Report Live, which offers pay-per-game access to a variety of live sports, such as basketball, soccer and lacrosse
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2018 Global Overview of Live Sports OTT White Paper
This report covers the live sports OTT markets in North America, Europe, India and China including statistics on the increase in viewership and which companies are capitalizing on this opportunity. Also discussed are the challenges and opportunities in scaling for millions of synchronistic viewers including support for large throughput, potential latency issues, content protection, delivery and media monetization.