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Spotlight Asia - Part 3 (Sports Media & Broadcasting)

Competitive sport has become a global billion-dollar industry due in large part to intellectual property rights and ever closer cooperation between the media, sponsors and sports authorities. Alongside traditional TV, Radio, Newspapers, and Digital Media, new business models in sports by companies such as Amazon, Facebook in rights ownership has increased. It has steadily become an important part of their overall business strategy and has contributed to the growing sports business landscape. Fueled by technological developments in broadcasting and communications more generally, this repackaging of sport as a commodity has expanded into a global business that effectively functions as a specialised division of the entertainment industry.


Rapid Evolution of Sports Media Rights and Broadcasting


The beginning of the connection between sport and the media can be traced back to (at least) the 1890s, when newspapers began covering local sports events. Against the backdrop of industrialisation, towards the end of the nineteenth century, professional sport and the popular press developed in parallel and both evolved into mass phenomena, at least in part, due to their mutual support. Over the last couple of decades, one of the most significant trends in the global audiovisual market has been the growth of sports coverage. This has gone hand in hand with the general commercialisation of sport and has developed at an ever increasing pace since the worldwide liberalisation of audiovisual markets. The expansion of sports media, television in particular, has made sport omnipresent in most, if not all, countries. Just as significantly, the ever increasing demand of broadcasters for sports programming has produced a ‘sports– media– business’ nexus that is largely built upon the widespread appeal of sport.


Below figure illustrates the advertising revenues generated by Indian Premier League from Season 7-12 and how it has evolved during this period.

 

Rise of OTT and Streaming Sports in Social Media


Younger generations are looking for a niche within the niche and sports media are catering to that need. Eg: ESPN Football, CricBuzz etc. There has been a steady growth in football viewership in Thailand and Indonesia, Basketball League in Philippines. Sports Rights owners will be increasingly focused on owning the entire supply chain, even if they sell the rights to the content, they will ideally own the customer journey throughout. OTT platforms like Dazn, Amazon Prime, are testing the waters at the moment. Their ideology is to wait until the market really opens up, and start investing at the ideal time.


OTT consumption pattern for the age groups 18 and 29 has stabilized, and more generally it is showing the first signs of slowing. The Netflix model has overwhelmed key players in the market, and sports right holders have long been considering the idea to replicate the same. For a prolonged time, the industry leaders have thought about replicating a Netflix model in live sports. However, challenges are aplenty. The first one is that a sporting event, conversely to a movie, almost always involves watching an event live. This changes the perspective from a technological standpoint: if you are watching Game of Thrones, and the connection falters, it doesn’t really matter, because you know the show will resume briefly. But if you are in the middle of the Wimbledon final, you would be absolutely furious to miss the winning point


The Premier League under the tutelage of Richard Masters has ideated to create their own streaming service. Masters confirmed that the Premier League had considered launching its own digital service – streaming live games and other content directly – in some countries during the TV bidding process for the 2019-22 seasons. In a recent interview, Peter Hutton (Head of Sports, Facebook) said that they will not compete directly with the broadcasters, instead they will help amplify the content in their space. However, Facebook hasn’t ruled out rivaling them completely. The social network has bought rights to show big sports, whether it’s La Liga in India or the Premier League in Thailand, Vietnam, Cambodia and Laos. It’s been in emerging markets where the cost of acquiring the rights is outweighed by Facebook’s ability to reach the largest audiences in those markets.

 

Key Facts & Figures


  • The pandemic will impact 35% sports media revenues in the Asia pacific region, as data suggests from renowned media research firms.


  • Australia, China, Hong Kong, India, Indonesia, Japan, Malaysia, New Zealand, Philippines, Singapore and Thailand expect sports-related media revenues down to $2bn from $3.7bn in 2020, which will decrement the sports rights industry by 35% in the Asia-pacific region due to the pandemic.


  • Sports television and OTT revenues are projected to have a 6.7-per-cent CAGR until 2024, to reach $7.2bn, and sports rights cost a 3.8-per-cent CAGR, reaching $6.6bn in Asia.


  • In 2017, Facebook made a bid of 600 mn USD to gain the digital rights of the Indian Premier League.


  • Facebook got ahead of BeIN Sports and Fox Sports Asia to finalize its largest deal a few months ago, securing about £200M worth of exclusive rights to broadcast live Premier League matches in South-East Asia from 2019.

 

References

(2020, October 19). Why you need a newly fluid business model. SportsPro Media. Retrieved from https://www.sportspromedia.com/from-the-magazine/amazon-reach-learfield-img-college-covid-19-business-leadership-strategy


(2020, February 8). Premier League’s new Chief says Netflix-style overseas service is on cards. The Guardian. Retrieved from https://www.theguardian.com/football/2020/feb/08/premier-league-netflix-tv-sports-rights


(2019, November 12). Netflixing the Sport: The DAZN model. The Consultancy Group. Retrieved from https://medium.com/@theconsultancygroupswitzerland/netflixing-the-sport-the-dazn-model-dd1466e34790


(2019, November 1). Tech platforms like Facebook and Twitter cool interest in broadcasting live Sports. Digiday. Retrieved from https://digiday.com/future-of-tv/tech-companies-cool-on-live-sports-broadcasts/#:~:text=Facebook%20has%20no%20plans%20to,a%20big%20rival%20to%20them


(2019, April 17). Why Sport is still waiting for the great Facebook rights grab. SportsPro Media. Retrieved from https://www.sportspromedia.com/opinion/facebook-live-sports-rights-strategy-review


This information has been compiled by Rounak Majumdar.


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