Sport has a real dilemma, a kind of Catch 22. Millennials are abandoning sports, where TV gives them to the choice to do so. That’s seems to be clear from research published this week from US management consulting firm LEK.
LEK’s advice is to take sport where the Millennials are – online and into eSports formats, including fantasy leagues. Of course, if sports like NFL, MLB and Nascar, and networks like ESPN and Fox Sports, go down this route, then that will further undermine viewing of sport by non-Millennials on the TV.
“The old model is under pressure,” says Alex Evans, Managing Director in LEK’s Sports practice and a co-author of the study. “Traditional sports organizations rely on TV, especially cable TV, to attract new fans and to generate revenue now through ownership of regional sports networks. But they will likely come under increasing pressure to change their model, especially 5 to 10 years down the road. We are already seeing authenticated streaming in many local markets, and we are seeing leagues at different stages of developing their own direct-to-consumer platforms. There is likely a need to accelerate these efforts in order to stay ahead of the curve.”
LEK is drawing very flimsy parallels between eSports and real sports, and offers no real evidence that taking an established sports network down this route will make any difference at all.
It argues that growth is impossible to find among millennial because they don’t ever watch sports on TV. In the past, newcomers to sports viewing, first discovered their favorite sport on TV, then became hardcore fans over time. But if they never watch TV, this can’t happen.
When asked to list key reasons why they became sports fans in the first place, 30% of respondents cited “watching games on TV growing up” as their top reason. That was equal to the number that cited “playing sports as youngsters.”
This paints Millenials as nerds who don’t play sports, and who don’t want to accept the TV that their parents watch, as having any validity. And yet somehow, they are fascinated by video games viewing on eSports channels.
LEK says that non-millennial sports fans report spending 41% of their media time on TV, but just 9% of it on online TV, while millennial sports fans report spending 33% of their time on TV and 20% online. But they aren’t really measuring the same thing, as LEK is measuring eSports fans, not sports fans.
This was all based on a survey of 1,500 US sports and eSports fans, conducted in the third quarter of 2016. The reasons LEK took eSports fans as a Millennials base is because they showed at least a “little bit” of interest in real sport.
The whole thing is an advert for LEK’s sports practice and its head Gil Moran, said, “For years, sports programming has been part of basic cable, and more has been available via premium cable TV sports tiers. TV has been the historical conduit for sports fandom. So the decline in legacy viewership points to a decline in sports fandom going forward.”
We think LEK is partly right. Sports has a dilemma. If it takes the LEK advice traditional sports will a) create a direct to consumer offering b) Create fantasy leagues because 46% of millennials which watch sport, joint these leagues and c) Present traditional sports like an eSport. That in turn will shift traditional viewing slowly off TV, and the first thing that any operator will do if they see the content elsewhere is move that sport from the basic cable package to an add on. And that will mean even less traditional viewers will view it. Catch 22.
The global eSports market generated $493 million in 2016 – a drop in the ocean compared to traditional sports.