Streaming Media
Video dominates the internet, so much so that Cisco has predicted that 82% of all IP traffic will be video by 2022. COVID-19 has goosed that growth. Streaming video, especially to mobile, is globally essential for work, entertainment, and health. At the peak of the lockdown, mobile networks held up remarkably well to the strain of additional data traffic, as work-from-home data usage spiked dramatically. For instance, AT&T reported a 22% increase in its core network traffic and a 30% increase in wireless voice minutes. The new combined T-Mobile/Sprint saw mobile hotspot usage spike 60%, while tethering was up 57% for T-Mobile and 70% for Sprint.
In April 2020, Akamai CEO Tom Leighton noted that global
internet traffic increased by about 30% during the previous month.
"That's about 10 times normal, and it means we've seen an entire year's
worth of growth in internet traffic in just the past few weeks. And
that's without any live sports streaming."
A report from Conviva shows that between Q3 2019 and Q3
2020, the time spent watching streamed video on mobile rose 30%
globally, with video on demand seeing 34% growth and live content up by
16%. Grand View Research calculates that the global video streaming market will
reach $223.98 billion by 2028. That's a compound annual growth rate (CAGR) of
21%, and live video will show the fastest growth.
COVID-19 Accelerates Sports' Digital Transition
Last year's suspended animation exposed the structural
issues that have long plagued the sports and sports broadcast industry. Digital
engagement led by live streaming offers a way out, but at the cost of a seismic
jolt to business models.
The need is dire. According to Pete Giorgio, the U.S. sports
practice leader at Deloitte, NFL teams likely lost an estimated $5.5 billion in
stadium revenue. The company's 2021 U.S. sports outlook says that because the
NBA finished its 2019–2020 regular season and playoffs in a fanless
"bubble," it likely lost about $500 million.
It's imperative to find ways to bring fans back to arenas
and to create alternative sources of revenue in 2021. Deloitte's prescription
is stark: Sports leagues and athletes should move beyond traditional broadcasts
and start interacting directly with their fans. "First and foremost,"
the company says, "it's critical that sports organizations invest in the
infrastructure required to power digital channels, streaming platforms, and
augmented and virtual reality solutions."
Ampere also notes that the suspension of live sports may
have had a long-term impact on fans and claims that it affects their propensity
to pay to access sports on TV. Its Q3 2020 polling shows that in 22 markets,
34% of sports fans are willing to pay to access at least one sport, which is down
from 42% in Q3 2019. This trend is sharpest in Europe and North America.
Reduced incomes and higher unemployment are two reasons for
this shift, but Ampere also points to a greater share of the household budget
going to premium subscription video-on-demand channels. However, Ampere
believes this has not yet translated into widespread premium pay TV sports
cancellations.
"The next twelve months will prove crucial for live
sports," says Minal Modha, consumer research lead at Ampere. "As
broadcasters begin to sign new rights deals or renew current contracts, many
will seek to leverage the pandemic to reduce fees. If consumers do begin to cut
the cord, this will only provide further ammunition and may see a widespread
re-evaluation of sports rights."
It's not as if sports clubs and franchises are
blindsided. A report from MediaKind finds that while most sports
rightsholders still define their direct-to-consumer (D2C) platform as
complementary to broadcast, they now also see it as an essential part of
their future distribution strategy and of building
direct touchpoints with fans. In addition, the report says that the user
experience bar is rising from one of pure entertainment, or presentation,
to one of engagement, or interactivity. It shows an even split between
rightsholders who use their D2C platform as a content hub only and those who
explore a whole range of fan engagement tools to exploit OTT's full
capabilities.
"D2C platforms … now form an essential part of any
strategy for live sport," asserts Raul Aldrey, chief product officer at
MediaKind. "While current D2C services are largely representative of an
emerging market, this sector is ripe for experimentation, exploration, trial
and error, innovation, creativity, and risk-taking—with big rewards for those
that get it right."
Broadcasters Monopolize Rights, but Cracks Widen
So where does this leave the major sports
contracts? Largely, as they were, with the bulk of live games for the
major leagues airing on TV. That includes the NFL, whose contracts with NBC,
CBS, and Fox are due for renewal in 2022. According to a Nielsen
study commissioned by the NFL, Super Bowl LIV in February 2020 was watched by
about 135 million people in the U.S., with most of them
attending viewing parties around a TV. From a TV ratings perspective, the
Super Bowl's viewing figures wrapped up a positive year. The
league had a 5% increase in viewership for the 2019 regular season,
attracting an average audience of 16.5 million viewers per game.
However, the NFL has also continued to experiment with
exclusive live-streamed games, such as the San Francisco 49ers-Arizona
Cardinals game on Twitch and Amazon Prime Video on Dec. 26, 2020. The
viewing experience included interactive features like X-Ray, which lays
stats over the game, and user-selectable alternative audio
options. Similarly, a wild-card game in January 2021 was streamed
exclusively on NBCUniversal's Peacock. The league has also streamed games
exclusively on Twitter and Yahoo.
An article from Deadline suggests that while Amazon is an
NFL streaming partner for Thursday night games, these streams "have
not yielded blockbuster numbers." It notes that while linear ratings
continue to erode, "most analysts expect incumbent rights holders to
retain their rights, even at an expected hike in valuation."
That's certainly the case for MLB, which last year extended
its broadcast contract with Turner Sports for a further 7 years in a deal
reportedly worth $3.2 billion. That averages out to $470 million per season.
The deal will also allow the WarnerMedia-owned group to stream live MLB games
and highlights on its digital platforms, including Bleacher Report.
In a 2018 deal worth $5.1 billion. Fox sewed up
the rights to air MLB games until 2028. And should ESPN re-sign
with MLB in 2021, as expected, the league would see its TV revenue increase to
approximately $2 billion per year, up from $1.5 billion. By comparison,
MLB's separate $300 million agreement with DAZN is small, but ESPN will
take note that its virtual lock on showing an extended package of 16 wild-card
games in 2020 not only won the TV ratings (averaging 1.87 million
viewers per game), but delivered a huge boost for ESPN's digital space.
During the wild-card playoffs, ESPN.com had its largest digital audience
of 2020, with more than 60 million page views of MLB content across
Sept. 30 and Oct. 1.
Notable other live-stream pacts of 2020 included
the WNBA's renewal with Twitter to live stream 10 regular season
games.
Sinclair Broadcast Group, however, wrote down the value
of its regional sports networks (RSNs) by $4.23 billion. It "grossly
overpaid for cable channels hobbled by cord cutting and shrinking subscriber
revenue," according to Bloomberg. These RSNs are former Fox assets
that Sinclair acquired for $9.6 billion in 2019. Sinclair CEO Chris Ripley says
there is still long-term value in sports rights, but hints that returns
might increasingly come from betting. He suggests "reinventing the RSNs
around gamification, around community-based fandom and around
direct-to-consumer [streaming apps]."
Social Broadcasting and Gamification
In 2021, expect to see live-event rightsholders and
broadcasters "gamify" their video offerings with a greater
degree of social interaction and mixed-media experiences. Nowhere has
this crossover been more acute than on game-centric video platforms.
Indeed, the lockdown resulted in particularly explosive growth. Statistics
from StreamElements and Arsenal show that the leading sites all grew
massively year over year from April 2019 to April 2020: 101% for Twitch,
65% for YouTube, and 238% for Facebook Gaming.
The related global esports market, which generated revenues
of more than $1 billion in 2020, is forecast by Newzoo to hit $1.6 billion by
2023. Even if 2020 earnings took a knock while spectator tournaments closed,
the successful experiment that many physical sports took by replacing live
action with video game simulations will be a lasting legacy. For example,
the pandemic led the NBA's Phoenix Suns to simulate games on NBA 2K,
streamed on Twitch. In its debut stream, which was set to mimic the team's
scheduled game against the Dallas Mavericks, the Suns' Twitch stream drew
221,000 views.
Likewise, SRO Motorsports switched real races
to esports, even holding them at their originally scheduled date and time.
SRO Motorsports drivers competed in the game simulation from their
homes. An in-game director team was connected to AWS Elemental
MediaLive, and live commentators were connected directly to the game
server. AWS Elemental MediaLive output streams to social media
channels, while AWS Elemental MediaConnect generated a live stream using Zixi
for delivery to the GT World YouTube channel, Motorsport.tv, Eurosport, and
CBS. Online, the broadcasts earned more than 500,000 live-stream views, and
more than 4.4 million live-stream impressions were delivered across multiple
platforms, including YouTube, Twitch, Facebook, and Twitter. AWS says
that SRO Motorsports was "impressed" at the ability to stream
the games in high quality at 60 fps to multiple destinations, "something
well outside the traditional TV workflow."
In addition, Deloitte claimed in a 2019 report
that "there are more millennials … who have a gaming subscription
than those with a traditional Pay TV subscription—and close to one-half of
millennials and Gen Z pay for both a gaming and video streaming service."
Steve Miller-Jones, VP of edge computing and solutions
architecture at Limelight Networks, says that in 2021, "We can expect
gambling integration and personalised services that provide alternative
commentaries, live audio feeds from the referee's mic, and crowd sounds for an
authentic stadium experience. We will also see more features focused on social
streaming, allowing friends to watch together. These features might be
short-lived, but those that really engage audiences will remain and change how
live streaming experiences are defined. We're not there yet, but we're
approaching a model where the user controls the content experience for
themselves."
It's not just live sports that were trending on sites like
Twitch last year. During the Black Lives Matter protests, the site was
prominent as a hub for airing sit-ins and marches. According to The
New York Times, "Some Black Lives Matter protesters and citizen
journalists have created Twitch channels just to broadcast the protests, while
gamers who were already on the site switched to showing the demonstrations
instead of video games." In addition, "Many said they chose Twitch
because they were familiar with the site from video games and wanted to
leverage an existing tech-savvy audience. Twitch also has some technical tools
for live broadcasting that other platforms lack, they said, like a robust
moderation system to avoid spam in chats."
Video the Killer App for 5G
With video forecast to constitute 79% of all
mobile network traffic by 2022, it's no wonder that mobile operators
consider video to be their killer app. And with 5G as the platform, the
opportunity for telcos is to support the best mobile video and also become home
to a new kind of video experience—something better than what has gone before.
This doesn't mean just enhanced mobile broadband for streaming live events
in HD or UHD; 5G is foundational for more immersive and more interactive video
experiences.
"Our number one priority in 2021 is to expand our
network and the quality of our video streaming with enhanced protocols like 4K
and HDR to deliver a TV like experience over the public internet,"
explains Darren Lepke, head of video product management
at Verizon Media. "Secondly, we're addressing emerging use
cases that we see broadcasters investing in including realtime video and
interactivity, wagering and gamification. We're developing new video
protocols that deliver realtime video at scale and integrating things like
gamification engines and video chat features so you can watch [a Premier
League] match with your mates."
In 2020, operators began to migrate to standalone networks
away from legacy network technology, finally opening up the speed and
latency gains of 5G. The first to reach this mark in the U.S. was
T-Mobile, fueled by the April 2020 completion of its merger with Sprint.
Verizon began moving traffic onto its new 5G standalone core in the second
half of 2020. Both have allied with sports to showcase their services.
T-Mobile partnered with MLB and put mini 5G-powered cameras
on the caps of players and coaches to provide a first-person view of
the action in pre-game practice before the first game of the 2020
World Series. T-Mobile's 5G FieldCams and BatterCams streamed live on
MLB's digital platforms, including the MLB VR app. "A broadcast
like this has never been done before, and it offers a glimpse at how
wireless connectivity is set to transform the way we watch and interact with
live sporting events and more," says Neville Ray, T-Mobile's
president of technology.
Verizon and the NFL have a multiyear plan to enable new fan experiences based on 5G connectivity in all NFL stadiums (13 installed to date). To develop new services required by broadcasters, rights owners, sports teams, and leagues, Verizon is also adding real-time streaming tech from Phenix Real Time Solutions "to enable sub-second latency for live sports at scale."
For example,
multi-camera viewing can make "remote sporting events more like in-venue
experiences with the ability to see plays from any angle," according to
Verizon. "Real-time streaming also provides viewers with brand new ‘watch
together' social experiences, such as co-viewing synchronized live streams,
in-game trivia, and even wagering, allowing fans to host virtual watch parties
with family and friends." Additionally, in the future, fans could
potentially experience post-game player interviews via 360° holograms, Verizon
says.
Yahoo Sports is already using some of these real-time
streaming features. Up to four NFL fans can watch live games together via
the Yahoo Sports app. This "Watch Together" function debuted
during the Kansas City Chiefs season opener versus the Houston Texans on Sept.
10, 2020. It follows similar concepts introduced by U.K. broadcasters Sky
Sports and BT Sport when live Premier League soccer resumed post-lockdown.
Having played second fiddle to AT&T and Verizon for
years, T-Mobile is making the most of its current position as the nation's
biggest mobile network. With 5G, for example, it argues that it is not just
serving more people (its 5G network was "live" in more than 210
cities as of November 2020), but doing so in a better way. "The fact is
that fewer than 1% of Americans can even find Verizon Ultra Wideband
5G … because it doesn't scale," contends Mike Sievert, T-Mobile's
president and CEO. "The bottom line is this: they simply bet on the wrong
technology. Mid-band is the Goldilocks 5G band. It has massive,
transformational capacity. AND it can reach for miles. T-Mobile is the
ONLY one with big swaths of mid-band dedicated to 5G. … Where customers
have both our low-band and mid-band 5G, we're seeing transformational
speeds [of] 300 Mbps average, with peaks up to 1Gbps."
Let's park that there and leave them to slug it out.
Automated Sports Production
AI-driven live production is spreading like wildfire among
college and high school sports. Israel's Pixellot has a deal with the National
Federation of State High School Associations (NFHS) and PlayOn! Sports
that will allow it to install 20,000 automated video production systems into
U.S. high schools by 2026 and to produce more than a million live-event
broadcasts per year. "The automatic production field is causing
the entire sports industry to rethink its approach," explains Yossi
Tarablus, Pixellot's director of marketing. "COVID accelerated the
automated content creation evolution."
According to Lepke, "The most deployed use of AI/ML
[machine learning] is for video analytics to enhance metadata generation and
improve what is otherwise a very manual process. As we advance AI/ML we
will see more use cases in live content such as being able to detect in a live
stream if a goal or pass or shot was blocked. This will enable smarter user
experiences though on-screen graphic overlays."
Olympics Return and 8K Rises
One result of the delayed sports seasons in 2020
will be a bumper 2021, with international events such as the Tokyo
Olympics and 43rd Ryder Cup back in business (with or without spectators). FIFA
World Cup soccer qualifiers are also scheduled for 2021 ahead of the
Qatar tournament in 2022. "The next two years will be a marketer's dream
because of the very rich pipeline of sports events," says Paul Gray,
Omdia's senior research manager. In addition, he notes that sales of 4K TVs
will be boosted, and 2021 will be a "tremendous" year for
broadcasting 4K content.
Despite the dearth of live sports content, TV sets were
popular sellers during the lockdown, as consumers upgraded their entertainment
experience. In the U.S., unit sales of TV sets 65" or larger
increased by 52% in the first half of 2020, and sales
of sets larger than 65" grew 77% in Q2 2020. Gray argues that 8K
will play a growing role as a professional performance format (for acquisition
if not yet for distribution) and that the 2024 Olympics Paris will see a
big leap in 8K sets sold.
A few high-end smartphone models offer 8K
video capture, including Samsung Galaxy S20, Xiaomi Mi 10, and
RedMagic 3. This number is likely to increase during 2021 and beyond.
"Most owners today may only dabble with 8K video, partly because of its
large storage requirements (600MB per minute) and because of the slower frame
rate relative to 4K and HD capture," according to Deloitte. "However,
consumers who do shoot videos in 8K capture could share this content via online
platforms such as YouTube or Vimeo. Over the course of 2021 and the
coming years, the volume of 8K videos captured on a smartphone should steadily
grow as smartphone memory capacity increases and frame rates go up."
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