nScreenMedia OTT multiscreen media analysis

CandW discuss if sports rights are worth it to operators

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Fox has picked up the broadcast rights to the NFL’s Thursday night games. Is the $3B five-year deal worth it, and what is the real value of professional sports is to operators?

Chapter 1: New free report from nScreenMedia (1:30)

If you have video customers in Europe or are a provider to online video providers serving EU customers you download the new free white paper Global Media: Dealing with EU travel portability and the Digital Single Market.

Chapter 2: The Fox NFL deal (2:10)

Fox purchased the broadcast rights to Thursday Night Football for the next five years for over $3 billion. Will says this shows television providers still believe premium sports are its best defense against cord-cutting and eyeballs migrating to digital.

He questions the wisdom of the investment keeping in mind that the TV football audience is declining. MoffettNathanson published data earlier this week showing that viewership across all games over the past two years is down 13%. He says the competition for viewer time has never been fiercer, and this is finally impacting major sports.

Chapter 3: Not just the US affected (7:45)

Declining viewership and increasing license costs are not just a U.S. phenomenon. In the UK the cost of sports rights is also escalating while viewership is declining. For example, BT paid almost £1 billion ($1.4 billion) in 2015 for the rights to deliver 42 Premier League soccer matches per season for three years. At the same time viewership has been falling. Sky channels carrying Premier League games saw a 17% drop in viewership in the 2016-2017 season, with BT seeing a much smaller 2% drop. In the US, NBC saw its Premier League game coverage in the US suffer a 17% drop as well. So far, however, the 2017-2018 has seen a partial recovery. Sky viewing is up 9% and BT up 8%.

Chapter 4: Sports are still a hedge against competition (10:40)

Despite the fact that sports rights costs are going up while their monetizable value is going down, Will thinks they are a good hedge against competition. He thinks the rights are a scarce resource and that makes them valuable to operators.

It’s clear that operators certainly believe this. Verizon’s Tim Armstrong said earlier this month at CES:

“I would argue a five-year deal for NFL is money really well spent to drive Verizon and its core strategy.”

Seeing how Comcast is leveraging Olympics coverage in the X1 platform, it’s clear why. Comcast is integrating web streams with broadcast channels in a seamless experience unmatched by any other operator. If you are an Olympics fan, X1 is the service you want to have. Seeing how Comcast lost 188,000 video subscribers last year, it could use any help it can get.

Chapter 5: Broadcasters aren’t doing enough with ads online (16:00)

Will is surprised that broadcasters don’t do more with ads in cross-screen environments. I reminded him that Fox did trial inserting local ads into the digital stream in last years Super Bowl.  That said, broadcasters have been very slow to leverage fully multiscreen ad opportunities.


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