Sports broadcasting has entered a pivotal moment in time where failure to keep up with technology and the movement of viewers to OTT services could see the industry on the losing side of the never ending war for viewers' attention. Consider the recent agreement between the NFL and Twitter to stream 10 out of the 16 Thursday night games on the social media powerhouse (after a failed first bid from Amazon none the less). This is a significant move for both Twitter and the NFL, and a good indicator of how sports broadcasters plan to finally join the OTT revolution.
Twitter has the engaged followers sports broadcasters and franchises need, but is just now really exploring how to make a splash with video. It's an equally big move for the NFL given sports broadcasters have notoriously shied away from streaming services outside traditional cable packages. For the NFL, it's the first season-long streaming deal the league has ever made. Only time will tell if this is ultimately the right game plan for the NFL and if other franchises and sports broadcasters follow its lead, but here's how it could play out.
The shift to OTT is inevitable
Broadcast television in and of itself is experiencing a revolution right now and that means adapting to this brave new mobile-first world is a must for all industries that play on the medium. Research shows the OTT market expanding to $32 billion in revenue by 2019 - no one can literally afford to miss out on this particular opportunity. The WWE Network is a good example of another broadcaster making the shift and seeing results. The network boards more than 1.2M subscribers paying $10 a month for the service with a reported $150 million in revenue a month and quarter of the company's top total line. From news to sports to entertainment, each sector is now tasked with finding the perfect combination of interactivity, immediacy and engagement with its content to keep viewers' engaged as this shift toward OTT services unfolds.
The sports industry as a whole is in an unusual position in regards to this transition, where it's stuck between providing immediacy and delivering high quality content for fans. If someone scores a game-winning touchdown, it needs to not only be accessible on the web immediately but also via smartphones and tablets especially with one in two sports fans watching coverage online. In these particular instances, immediacy will always trump quality. However, if viewers are watching a full game from start to finish in comparison to one particular play, are they willing to sacrifice high quality coverage for instant gratification? In this case, when more content is consumed for a longer period of time, especially as it relates to sporting events, high quality content reigns supreme. Sport fans will only continue to become more social in how they engage with their content and the NFL wants to be at the forefront for when that happens. In fact, they are already ahead with their announcement to stream 10 games on Twitter this year, which provides a glimpse into the future of what sports broadcasting may look like.
Sporting events are still one of the few programming options that are consistently watched in real-time. When viewers are unable to tune in live, they typically head to Twitter for play-by-play posts, making the social media platform the most logical next step for this transition to OTT in sports broadcasting. Not only does it reach a highly sought after demographic, but it is also where live events already unfold, making it a natural partnership for live sporting events. Video has also become increasingly popular on Twitter. In fact, Twitter's own research suggests that 82 percent of their users watch video content on the platform, and more than 90 percent of those video views come via mobile devices. Those two trends alone would suggest that the NFL deal is a perfect fit, giving viewers a new way to connect with popular content. However, some are viewing this partnership as more of an experiment, especially since the games will still be shown on their traditional network TV channels. Without actually seeing it in action, it's difficult to gauge how successful this deal will be, but we will definitely be following along.
The Challenges OTT Presents
According to a recent study by Parks Associates, sports networks like MLB TV and WWE Network ranked number four and number five behind the three big OTT providers (Netflix, Amazon and Hulu) in terms of subscribers. Beating them is a huge challenge. Hulu's recent announcement to stream live TV in 2017 is an even bigger move for the service and if executed properly the rest of OTT services that don't offer live content will need to follow. However, this move does underscore there is value to be added in live viewing. Live streaming has come a long way in the past few years, broadcasters even managed to get the past year's Super Bowl game to millions of online and mobile viewers. But, providers are still looking to solve program delays in streaming delivery, a challenge that Hulu will have to overcome in order to be successful. These delays can last anywhere from 30 seconds to as long as two minutes with viewers hearing about a play on Twitter before it's streamed on their laptop or smartphone. In fact, according to a study conducted by IneoQuest and Research Now, two-thirds of respondents rated their frustration with buffering video a seven out of 10 and two out of five would wait less than 10 seconds before presumably giving up and switching to broadcast. In order for sports networks to truly surpass the big OTT providers, they must first solve this issue.
The sports revolution is here, but one of the most significant challenges facing the industry today is how to successfully transition from the existing high definition world of broadcasting to the brave new world of OTT. In certain situations people are willing to forgo the quality of picture for the immediacy of a replay, but only time will tell if immediacy will eventually become more important. There is no doubt that sports broadcasters are losing valuable ground, and should therefore begin building the right OTT strategy fast. Only the future will tell us how fast.