Frisco Texas: Most sports rights holders perceive OTT as an essential part of their future distribution strategy for live sport and building direct touchpoints with fans, while still considering their direct-to-consumer (D2C) platform as complementary to broadcast coverage, according to a new study by MediaKind
The MediaKind 2021 Sports D2C Forecast, which analyses the D2C OTT platforms owned and operated directly by sports rights-holders, explores a wide range of trends in the D2C sports space, including the use of live content, fan engagement, and monetization.
Almost three-quarters of the rights-holders analyzed offer some form of D2C service to their fans today through subscription packages, utilizing one or more of six entry points.
The findings reveal a 50-50 split between rights-holders. Half use their D2C service purely as a supplementary content hub, focusing on delivering high-quality video. The other half concentrates on making full use of OTT’s interactive possibilities, embedding fan engagement features into their services. In terms of distribution, 58% of the rights holders analyzed have a standalone D2C web domain, with the remaining 42% providing D2C services via a sub-domain of their main website. Just over a third of the total rights-holders offer their D2C service through a standalone mobile app.
MediaKind also highlights how current standalone D2C sports services are under-utilizing secondary monetization tools. None of the rights holders analyzed offer an integrated betting service. At the same time, features such as ticketing (utilized by 3% of rights-holders), merchandising (5%), and advertising (8%) remain rare, with greater priority placed on delivering a high-quality viewing experience and user interface. However, many rights-holders expressed concerns about how their future streaming service will stand up when faced with a high volume of concurrent live streams despite recent technological advances.
MediaKind Chief Product Officer Raul Aldrey said: “The results of our study are clear – rights-holders cannot afford to be without a D2C service moving forward. All 40 of the rights-holders have recognized how D2C services offer crucial, data-driven touchpoints with their fans and provide unique opportunities to enhance fan engagement and tap into new monetization streams. But the performance of these D2C platforms remains table-stakes and fundamental to attracting and retaining audiences long-term. Future D2C services must guarantee stability at scale, and the overall delivery must be at least as good as the broadcast-quality linear services that sports fans have been accustomed to and enjoyed for decades.”
Other key conclusions from the MediaKind 2021 Global Sports Forecast include:
- Subscription models dominate: The majority of rights-holders who operate a D2C OTT service make it available as a subscription service. The subscription model is likely to be the dominant long-term business model.
- The UX bar is rising from entertainment to engagement: There is an even split between rights-holders who use their D2C platform as a content hub only and those who are exploring a whole range of fan engagement tools to exploit OTT’s full capabilities.
- Focus is on maximizing recurring revenues: The rights-holders analyzed provide six different types of entry points for fans. There is a clear need to generate guaranteed revenues in a subscription culture where immediate cancellation is made easy – for example, heavily discounted annual passes to tie fans to the service long-term.
- Opportunity for secondary monetization is mostly untapped: However, rights-holders must resolve the dilemma of whether to integrate secondary monetization verticals – such as betting, ticketing, and merchandising – on their D2C service to reach engaged fans behind a paywall or to put these features on their main website to reach wider audiences.
Aldrey added: “Streaming is a major part of sports media, with internet-based delivery now very much the present, as well as the future of media content distribution. The growing ubiquity of D2C platforms means they now form an essential part of any strategy for live sport – regardless of whether they are a complementary service to broadcast coverage or the primary means of distribution. 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.”