Live sports will drive a $4.9bn opportunity for 5G/OTT content bundling

Reports from Wireless Watch’s sister service, Rethink TV, and from Ovum, both highlight the opportunity for telcos in bundling 5G with over-the-top video and live streaming, especially driven by live sports.

Live sports streaming will represent 53.2% of a $4.9bn 5G telco/OTT bundling revenue opportunity by 2024, according to Ovum, rising from 20.5% in 2019. SVoD will be the second largest market for 5G telco/OTT by 2024 at 31.9%, an increase from 25% of the 2019 5G telco-/OTT market which figures place at just $6m today.

Surprisingly, the rise of live sports means the cloud gaming market is forecast to account for a substantially smaller share of the pie by 2024, shrinking from 25.7% to 6.9% over five years. Of course, total revenue growth is still significant, rising from $1.5m in 2019 to $336m in 2024. Similarly, music subscription services will be largely drowned out by the rise of live sports and SVoD services, although still music subscription services will soar from $1.6m in 2019 to $290m in 2024 – but specifically for the 5G telco/OTT opportunity.

Ovum’s 5G Media Bundling Opportunities report supports these figures on the premise that live sports streaming services will enjoy superior quality video over 5G and increased reliability, while the premium nature of sports rights makes it a perfect fit for hard and soft bundling.

One caveat is that the dedicated bandwidth and network slicing required by live sports streaming will not be “immediately on tap” amid 5G network roll-outs.

A whole host of upcoming OTT video service launches look destined to be bundled with 5G when those networks are switched on, namely WarnerMedia’s HBO Max (spring 2020) with reports claiming AT&T will offer a discounted bundle with a wireless package.

Verizon has inked a deal with Google to bundle a YouTube TV subscription into its 5G wireless home and FIOS Internet, telephony and TV packages. Details are scarce, other than offering “unique, high value promotions to customers across platforms,” so we’ll have to wait until later this year before Verizon reveals pricing and launch date.

In the UK, BT is betting big on 5G infrastructure investments, not least with the aim of sustaining a competitive presence in the premium sports market.

The report also shows that 5G will boost telco/OTT media bundling revenue to the tune of 81% between 2019 and 2024, reaching around $11bn, while 3G and 4G media bundling revenue will plateau over the forecast period, from about $4bn in 2019 to $6bn in 2024. Ovum forecasts that rapid 5G network roll-outs won’t even give 3G and 4G media bundling a chance, overtaking its predecessor networks instantly this year.

“Business development execs at carriers have over the past two years or so been asking where the next ‘killer apps’ in telco/OTT bundling partnerships will come from, beyond the current staple of premium video and music streaming services such as Netflix and Spotify. That question has gained more urgency with the advent of 5G,” said Guillermo Escofet, principal analyst of media and entertainment at Ovum. “Partnership options in the live- sports streaming space are multiplying, as more OTTs join the fray, including the FAANG [Facebook, Apple, Amazon, Netflix and Google) giants, and more rights holders go direct to consumer.”

“For carriers with no broadcasting ambitions or not able to secure broadcasting rights, bundling deals with live sports-streaming OTTs will be the next best thing. And many of the roles that 5G carriers see themselves playing around live sports, such as team/event sponsor, team owner, or event organizer, will be complementary to such partnerships,” added Escofet.