OTT: A Sporting Chance To Topple Big Broadcasters?

27th February, 2017 by

As the big streaming video providers like Netflix and Amazon continue to augment their services with blockbuster TV series, movies and original content, an increasing number of people are opting for their all-you-can-eat buffet of streaming delights. The services are typically a lot less expensive than a cable or satellite TV package from one of the big broadcasters, and in recent years we have seen the rise of the ‘cord-cutters’ – people opting to cancel their expensive cable subscriptions in favor of on-demand streaming services.

 

Who’s On First?

Yet one category of programming where the traditional broadcasters still have a massive competitive edge over online streaming rivals, is live sports. They pay big money for the exclusive live rights to the biggest sports and tournaments. And while many people would be happy to ditch the bulk of their cable package, few are willing to consider cutting that cord if it means they’ll be deprived of the chance to see their favorite sports stars strutting their stuff.  

Broadcasters know this, and tend to make people take out vast bundles of unwanted channels in order to gain access to the handful of sports channels they want, as well as charging additional premium rates for the biggest sporting events.

OTT Rounds Third Base

The rise of OTT technology could be set to threaten the broadcasters’ cosy (some might say monopolistic) model. Increasingly, both minority and blockbuster sports are investigating, building and/or implementing direct-to-consumer OTT delivery models. Many sports are currently tied into contracts with the traditional TV companies. These include OTT as well as broadcast rights. Therefore as these contracts come up for renewal it’s a fair bet that many sports will be weighing up the economic advantages of signing another big contract versus selling streaming content direct. This might be on a subscription or pay-per-view basis.

More Sports Coming On Stream

Already, there have been some interesting initiatives among both mainstream and minority sports bodies, predominantly in the US. They include:

  • The US National Football League (NFL) offers a streaming catch-up service and some live streaming games, although TV deals currently limit what can be made available.
  • The PGA offers live streaming coverage of the early rounds of its golfing tournaments for $40 a year or $5.99 a month.
  • Wrestling body WWE offers a monthly subscription service giving viewers access to archive matches and pay-per-view content.
  • NBA offers a range of live streaming packages for basketball fans, from a pass to watch a single game to an all-you-can-watch subscription.
  • FloSports is a live streaming service that brings together a number of less popular sports including swimming, volleyball, hockey and gymnastics.

At the moment, most of these services augment, rather than replace, broadcast sports channels. And, especially for viewers interested in a range of sports, the combined cost of subscriptions could quickly add up to more than they’re currently paying for cable and satellite packages. But as the cost of cloud storage, bandwidth and processing power, central to successful OTT continues to fall, more and more sports will be made available via streaming services in increasingly convenient, customizable and cost-effective ways.

Keep your eye on the ball – and the prize

Business models will evolve and adapt to better fit consumers’ needs, just as they have previously for streaming music and movies. The technology will allow individual sports to leverage their content more effectively, open up new partnership opportunities such as sponsorship and allow them to form closer marketing relationships directly with their consumers.

So could OTT evolution topple the traditional broadcasters? Probably not in the immediate future – there are a lot of pieces that need to fall into place in terms of technology, marketing, changing ingrained viewing habits, steering through the maze of rules governing different geographies, etc. The big boys certainly have enough time to get their OTT act together to avoid being cut out of the loop. But one thing’s for certain – the technology will undoubtedly require a fundamental change to their traditional business model, with individual sports and consumers the big winners.

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