There has not yet been a Netflix of live sports but fears of disruption have been growing amid evidence that premium assets may be being dragged down by the malaise affecting linear pay TV, especially in the US. It is in Europe though where one of the biggest sporting leagues, Spain’s La Liga football, is trying out an OTT service that it hopes can feed off its brand to nurture niche and grassroots sports with at least indirect revenue generating potential in future. Although the new service, LaLigaSportsTV, will support live as well as on-demand viewing, there is no immediate suggestion La Liga has any intention of going towards Direct-To-Consumer (D2C) for its live matches in the top divisions.
Even so the news will send a chill among pay TV operators because it underlines the potential of less popular sports to prize open the linear pay TV armoury and undermine the primacy of the premium assets. This at least has been a tendency in the US, where viewing figures for the three major sports of baseball, basketball and American football, have been in decline for several years. For example, the totemic Superbowl, the country’s most viewed event, has seen linear TV audiences decline each of the last 4 years and in February the total of 103.4 million was a further 5% off the 2018 total and the lowest for 11 years.
Various factors are at play but there is acceptance that while premium sports have held linear pay TV together over the last few years as the only content people are willing to pay excessive fees to view live, they are merely postponing the inevitable streaming migration. In Europe that postponement is longer with the decline in linear viewing numbers that showed up on Sky UK in 2017 for association football, or soccer if you like, turning out for now to be just a blip, attributable more to an unfashionable team winning the English Premier League that year. Such is the pulling power of soccer in the leading European nations that it distorts the whole pay TV market.
The persistent slight decline in viewing numbers for premium sports that has set in for the US is attributable to younger and less well-off viewers refusing or unable to stump up the subs and has had the side effect of boosting audiences for a number of niche sports, or lower leagues of major ones. OTT is tailor made for boosting such audiences anyway with its potentially global reach and effectively infinite content scale not confined to set channels. OTT may not be capable of generating audiences out of nowhere for a new sport but is very good at propagating established roots and aggregating those interested in viewing them.
La Liga has picked up on this and realized that investment in streaming niche sports other than football is good for the brand and has potential to stimulate the grass roots indirectly. The cloud service has a user interface designed to ease navigation around non-live content, with top division football represented just via summaries of games and post-match interviews, to avoid infringing existing rights, which for pay per view are shared between Telefonica’s Movistar and beIN Sports. There is a recommendation service based on usage patterns designed to encourage viewing of new sports, as well as a scroll-based guide of available sports ordered according to user preferences built up over time.
Content is free, apart ironically from football itself from the lower three La Liga divisions, which is available on a separate subscription for €14.99 a year or €2.99 a month. Other sports covered include motorsports, badminton, basketball, handball, boxing, American football, Futsal, gymnastics, hockey, table-tennis, triathlon and water polo, with cycling, petanque and fencing to follow later.
At present, events in these sports will not mostly be shown live, but that is not a handicap in most of these cases where many viewers will be unaware when the events took place in any case. The interesting aspect is that La Liga views this as part of a larger project on two fronts, both to evolve with OTT with a view to increasing its commitment later, possibly even for its crown jewels of top league football in at least some capacity – and also to exploit its brand and marketing cloud to reach out across the whole sporting spectrum. Over time there is the ambition to help smaller sporting federations understand more about their spectators and also the viewing consumption their events generate, so analytics will become of the service La Liga offers.
Inevitably, success of this service and others, if La Liga has set a precedent here for major sporting leagues, will create more momentum for OTT sports viewing and exert pressure on pay TV operators as rights deals come up for renewal. We have seen the EPL launch iFollow in the UK, which is quite different, allowing clubs to stream all their live games overseas apart from those for which rights have already been sold, for a yearly fee of £110 ($140). This has a huge potential audience given that the EPL claims it is watched in 643 million homes worldwide, although of course in some cases via an existing pay TV service. Nevertheless, this is also a step towards going D2C.
In truth, major leagues like the EPL and La Liga, or BBL, NFL and MLB in the US, are some distance from cutting the cord themselves, because they will need persuasive evidence this would yield more revenues than it loses. They would need convincing that large numbers of casual viewers could be persuaded to subscribe to an OTT service delivering games and they also need to determine what form of package would work. They would need to know how many would pay a given amount for a certain package and ascertain for each territory whether this would generate more revenue OTT than via the traditional broadcast model that has so far held subs at a high level. There is a gamble going D2C and so it will happen when the risk of not doing so has become clearly greater than of losing pay TV revenue.