Amazon and Facebook waking up to the value of live sports content, as EPL bidding starts
It is now more than a quarter of a century since Rupert Murdoch vowed to use premium sports content, specifically from the newly-formed English Premier League (EPL), as a “battering ram” to sell Pay TV subscriptions in the UK. It worked, and since then TV providers around the world have built huge paying audiences on the back of exclusive sports content.
Now, on the day that the auction for the next tranche of EPL rights spanning 2019/20–2021/22 opens, the sports rights industry is heading for another revolution. This is one in which the major Internet players – Google, Amazon and Facebook – are waking up to the value of live sports content, and are starting to chase the same distribution rights as established broadcasters.
Since new technology and changing consumer behaviour are driving a shift in how video content is created, delivered and consumed, sports fans now expect flexible options for viewing; broadcasters, rights holders and brands need to create more content and viewing options than ever before.
Comcast Technologies, in a white paper with Akamai, suggests: “The winners will be those most able to acquire, deliver and generate value from premium sports content for a new generation of fans.”
The value of EPL rights this time will probably smash the £5.14 billion which Sky and BT paid between them for the previous round in 2015. Some commentators predict that bids could double and break the £10 billion mark – that is without taking into account the additional international rights which in the last round (2016-19) netted the EPL a further £3bn.
Such an income will far exceed that of the most lucrative league in the world, the NFL. U.S broadcasters, including NBC and CBS, paid $27 billion (£20bn) for NFL matches but that was over the eight-year period 2014-22.
Interest from large OTT players has helped inflate the EPL price. Amazon, in particular, is widely tipped to pick up at least one of the packages the Premier League is offering. Eurosport (reinventing itself as a digital-first service) has also been linked to a bid, although it will not have CEO Peter Hutton at the helm. He has been lured by Facebook, which wants more live sports properties to build communities around its ad-supported premium content platform, Watch. If you want to watch World Surfing, then Facebook is the exclusive home for it.
Media analysts at German investment bank Berensberg believe Amazon will be prepared to take a loss if an EPL deal ultimately puts it in a better position to increase Amazon Prime Video’s share of the global SVoD market.
The linear OTT Pay TV market in Europe had reached 7.4 million subscribers at the end of September 2017 (according to Dataxis) – a growth driven by specialised sports (and kids) content. Subscribers to OTT sports platforms account for a quarter of the total, Dataxis found, and the digital services are proliferating as rights holders and sports properties look to counter flagging linear TV ratings.
The direct-to-consumer approach has been embraced by sports-centric aggregators like Eleven Sports and DAZN and leagues or federations with the MLB.TV, WWE Network, NFL GamePass and NHL TV services.
“They offer fans the flexibility to watch live away from TV, whilst offering rightsholders the ability to own each fan’s personal, shopping and behavioural data, using this to advertise and cross-sell with regional, targeted messaging – a relationship which is missing from linear TV,” suggests Gareth Capon, CEO at Grabyo, which creates and publishes content for sports clients on social media.
Broadcasters are looking to give customers the same flexibility in viewing while also keeping them within the live Pay TV product with their own online services: Eurosport Player, beIN Sport Connect, Fox Sports Go, Sky Go and NOW TV.
The daddy of the them all is about to launch in the U.S. – Disney’s ESPN-branded OTT sports offer will feature Major League Baseball, NHL and Major League Soccer, as well as events not currently featured on the main ESPN channels like rugby and cricket.
With the technical back-end, including customer authentication, under the command of BAMTech, the technology outfit Disney bought from the MLB for $2.5 billion, and a new base for BAMTech Europe in Amsterdam, Disney has a launching pad for the service on this side of the Atlantic. Having already dabbled in EPL broadcasts in 2010, when it picked up the pieces of the failed Setanta operation, ESPN may well be preparing to try again.
After all, if sports rights are a proven battering ram for building a premium business then the EPL is unarguably the best property to do it with in Europe. On the verge of buying Fox, and with it potentially Sky (and its digital products) Disney could do worse than asking Rupert Murdoch.