What is the business case for launching an owned over-the-top (OTT) service? It’s a question sports executives from across the industry continue to ask themselves, while there are many rights holders that have already brought a streaming product to market.
It doesn’t matter whether it’s a major league monetizing live-game broadcasts, or an International Federation (IF) boosting subscriptions by making live and on-demand (VOD) video available to global audiences, the streaming sector is changing both the way fans consume sports online and how rights holders market their core product to their fan base.
Among the most notable recent examples, last year, the National Football League (NFL) integrated its NFL+ streaming service into its digital ecosystem, including access to live regular-season and postseason games on mobile devices. Similarly, football’s world governing body FIFA launched its dedicated FIFA+ streaming channel, which also connects subscribers to the federation’s other ecommerce and ticketing platforms.
Meanwhile, local-market, regional sports entities are also capitalizing on the OTT opportunity by rolling out their own streaming products. For example, Handball-Bundesliga (HBL), the organizing body for Germany’s top two handball leagues, is among several leagues to launch a global OTT service in recent years. Frank Bohmann, HBL’s managing director, said HBL TV will “aim to develop more reach and visibility beyond our core and licensed markets in order to […] achieve a sustainable increase in sponsorship revenues”.
In February 2022, USA Gymnastics launched its proprietary streaming platform, FlipNow, featuring both live and VOD content, and is made available as part of a tiered, premium subscription model. The national body is among a flurry of IFs and Olympic committees to launch an owned or licensed OTT product and/or streaming capability during the past 12 months (see map below), recognizing an opportunity for global and national bodies to widen their audience reach and boost their audience retention between Olympic and Paralympic Games and other major events.
TREND TOWARDS DATA OWNERSHIP KEY DRIVER FOR VIDEO ADOPTION
Owning a diverse direct-to-consumer (D2C) product inventory is a vital component for building audiences and generating revenue opportunities. While there is an operational-cost benefit to integrating technologies inside an evolving sports business, customer-facing products provide platforms for delivering fan experiences which boost subscription numbers and lay the foundation for driving customer relationships.
According to Research and Markets projections, cited in our latest 2023 Digital Trends in the Sports Industry report, the global software-as-a-service (SaaS) customer relationship management (CRM) market is predicted to grow by US$59.4 billion between 2023 to 2027 at a compound annual growth rate (CAGR) of 13.43 percent. Meanwhile, a survey commissioned by Redpoint Group, conducted by The Harris Poll, suggests that two-thirds (66 percent) of customers are willing to share personal data with a brand if it would help to improve their user experience (UX), highlighting the role of a digital inventory to strengthen customer relationships.
This is demonstrated by N3XT Sports’ ongoing work in partnership with United World Wrestling (UWW), which included the launch of the IF’s own customer relationship management (CRM) solution and two new digital touchpoints for collecting fan data. As well as a dedicated mobile app, the federation also added a video-streaming function to its digital asset portfolio and offers free live-streams from its major international events.
Since adopting a mobile app and video hub into its content distribution strategy, the federation has seen significant engagement growth via its digital inventory and social media channels, helping to foster its relationship with individual subscribers and customize performance-marketing campaigns based on individual user data.
“Data is key to delivering digital experiences that fans want,” explains Hisham Shehabi, N3XT Sports Chief Operation Officer (COO). “Therefore, a diverse digital ecosystem helps augment a sports organization’s fan-intelligence capability.
“Our team at N3XT Sports is dedicated to delivering digital transformation and innovation strategies. As demonstrated by our partnership with UWW, the key to digitalization begins with a thorough assessment of the organization’s digital maturity to identify areas where innovation can have the biggest impact.”
OTT GRANTS RIGHTS HOLDER BROADER AND FLEXIBLE AUDIENCE REACH
Amidst the proliferation of D2C media in the age of modern sports viewing, OTT services continue to take a greater share of the broadcast market. According to Ampere Analysis research cited in our Digital Roadmap 2030 report, streaming services will make up close to 15 percent of the major broadcast rights markets in Europe and the US in 2023.
That number has grown from 0.6 percent recorded in 2016 and will likely increase at a rapid pace as media companies and notably rights holders continue to launch dedicated sports streaming offerings via mobile. While OTT ownership is changing the sports media landscape, it is also seeing Big Tech companies leverage unique partnerships with digitally focused sports entities, presenting another incentive for federations and organizing bodies to invest in their digital content offering.
For example, the Portuguese Football Federation (PFP) collaborated with Amazon Web Services (AWS) on the delivery of its dedicated Canal 11 linear-TV cum streaming service. Meanwhile, Major League Soccer’s (MLS) ten-year partnership with Apple this month rolled out a new MLS Season Pass offering via the US technology giant’s Apple TV mobile app ahead of the 2023 MLS campaign.
While offering increased visibility of the MLS brand in more than 100 countries, including exclusive access for Apple TV subscribers to every MLS regular-season and postseason matches, the move represents an “enormous undertaking” which MLS Commissioner Don Garber says will “capitalize on [Apple’s] entire ecosystem of brand, subscription, design and technology, and engineering experts”, adding: “I’m really proud of our clubs, who in a very short period of time produced some really compelling content.”
WHAT’S N3XT?
The burgeoning streaming market offers sports properties not only with the opportunity to develop their own OTT offering but also a digital content package which is appealing to popular streaming aggregators whose audiences watch sports. Before this can happen, every league and/or federation requires a digital infrastructure that advocates data ownership and the ability to scale a digital inventory that develops their data acumen.
It’s important therefore to recognize that, without a digital and data framework tailored for building and retaining audiences via quality content, owning an OTT service does not serve the rights holder in any meaningful way other than to generate brand exposure.
According to N3XT Sports Chief Executive (CEO) Mounir Zok, as rights holders continue to take ownership of their customer data, we can “expect to see others expand their direct-to-consumer (D2C) offerings via their owned mobile and OTT platforms”, adding: “Sport can be an enabler for innovation – both as a reliable platform for the organization’s technology partners, but also as a tool for building the rights holder’s own value-proposition.”
Our team at N3XT Sports works tirelessly to develop and implement digital strategies across a multitude of sports properties at federation level, competition level, and club level. To learn more about how digital transformation can support the growth of your organization and optimize your digital inventory and fan engagement strategy, fill out the form below and we’ll be in touch. Our goal is to drive the digitalization of the sports industry and our clients.