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Fans Remain Inside Bundle, Top Sports Properties Should Too

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Fans Remain Inside Bundle, Top Sports Properties Should Too

The NBA is awarding the bulk of its next national broadcast rights package to Disney/ESPN and Warner Bros. Discovery/Turner Sports or Comcast/NBC. It’s smart for the league to re-up with the established pay TV networks, and not just because they’ll collectively pay it north of $5 billion a year for the next decade plus.

A proprietary ‘voice of the customer’ research panel commissioned by JohnWallStreet and Betting Hero confirmed that pay TV continues to be the primary way the majority of fans consume live sport.

And the reality is, the percentage is likely even higher as the data does not reflect those who believe they’ve cut the cord but subscribe to a vMVPD, which is just a digital Pay TV bundle.

“If a league thinks it can quickly pivot to digital and abandon linear it’s mistaken,” media consultant Patrick Crakes said (see: MLS and Apple TV). “People may follow you there eventually, but today, most fans are still inside the bundle.”

Many will supplement their subscription with DTC services that show some/all their favorite teams’ or leagues’ games. 50% of our panelist said they use at least one property-specific streaming offering.

But general market fans do not want to be in a situation where each league is exclusively behind its own expensive paywall and they’re forced to decide which they can afford to do without.

Rights owners ought to “be careful with the idea that they are going to control all the rights and still get access to the same number of consumers for the same economics as they get now,” Crakes said.

They just might find themselves fading into irrelevancy in an increasingly crowded attention economy.


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Sports leagues still need to be inside the pay TV bundle because that’s where their fans are.

“That’s counter-narrative,” Crakes said. “The general assumption is that no young people have pay TV bundles.”

The average age of our panelists was 38.

But sports fans are sticking with the pay TV bundle because that’s where most of the games still air. Content discovery is also easier there, and the value proposition is strong (think: subscribers get a lot of content for one digestible price).

That is critical for rights owners to understand as sports rights are increasingly segmented out.

“A common Wall Street narrative over the past five years is that DTC is the future, rights owners have to get to digital, and they must control the access once there exclusviely,” Crakes said. “Well, that may be true someday, but you’re probably going to be very early if you do it now.”

That’s not to say rights owners should ignore what comes next. Allocating some rights to a streaming platform makes sense.

Particularly since sports fans have shown they “will buy your DTC service,” Luke Jurat (analytics consultant, Betting Hero) said.

62% of our panelists said they have a streaming service that they use to watch sports on, and only 37% of those individuals do because it’s the only way to see the games.

Sports fans are “getting a lot of value out of pay TV being supplemented by a streaming service,” Crakes said.

Or services. 39% of those surveyed said they use at least four.

That makes sports “a great place to market streaming platforms because fans over-index on consumption of DTC products,” Crakes said.

It’s logical that a panel comprised largely of ‘passionate’ or ‘super’ fans (60% self-identified as such) would have several streaming services. Sports rights are increasingly fragmented, and those individuals want to watch all their favorite teams’ and leagues’ games.

“The media companies figured out the smaller but highly engaged ultra segment will pay for this,” Crakes said. “In many ways, some of these streaming platforms are being built on the back of these ultras.”

Rights owners would be wise to launch and market DTC as an incremental offering inside of the pay TV bundle, as opposed to as an alternative to it. Doing so would allow them to continue reaching the general market sports fan, and better monetize the super fan.

“Carving out the ultra-fan from the general market makes sense, especially as the pay TV bundle becomes more sports-centric,” Crakes said.

Or at least some of the super fans. A portion are simply not subscribing to pay TV or DTC services.

26% of respondents said they stream sport via offshore websites. Another 7% admitted to using someone else's passwords to watch.

“More than a few fans are basically stealing signals,” Crakes said.

That nugget should not be ignored. Young fans are telling sports properties there isn’t enough value in the way rights are currently packaged.

Pricing is a key factor. 51% indicated they would be willing to subscribe to a league-owned DTC service that had exclusive live rights–up to a certain point.

That is problematic for leagues thinking about leaving pay TV’s economics behind and putting all their content behind a streaming paywall.

“To launch an exclusive DTC product and replace existing revenues a major property is likely going to have to charge $80 or $100 a month,” Crakes said. “That’s where you start and then you have to grow revenues 5-10% a year.”

And at that number, there is going to be a price-scale elasticity issue.

Remember, the pay TV bundle gives fans the bulk of their sports content for $100/mo. Most aren’t going to pay that much for a single league’s service.

“When consumers have to start choosing on price, that’s when they start making hard choices and can end up eliminating you,” Crakes said. “You don’t want to put fans in that position. Bundling can help prevent it.”

Similar logic exists for teams thinking about going exclusively down the DTC path.

“If fans have to do league DTC for national games and then team DTC that’s just going to make [the need to choose between properties] worse,” Crakes said.

Sports fans are still inside the bundle. Top rights owners should stick around too–or risk losing relevancy while waiting for the demo to cut the cord.

Editor’s Note: The proprietary research panel consisted of 275 sports fans (55% male). 150 of the respondents self-identified as sports bettors. Those individuals answered questions as part of a study for NASCAR in early April. The other 125 individuals, some of which have wagered on games, responded to a series of media-focused questions.

Please reach out to [email protected] to request the balance of the study’s findings free of charge, to coordinate a call to review the balance of our analysis, and/or to commission a custom focus group or research project. We’re here to help you make smarter decisions!