Twenty First Century Fox Inc.’s (FOXA) Fox Sports, which holds the exclusive English broadcast rights to the 2018 World Cup, has announced several content partnerships that will expand their coverage beyond the television screen. FOXA announced plans to stream exclusive digital content on Twitter, Inc. (TWTR), including 27 live shows (30 minutes per) and near real-time highlights of every goal scored. On Snapchat (SNAP), the broadcast network will create “Publisher Stories” using video, text, artwork and motion graphics to comprehensively document every day of the tournament. SNAP will also produce FIFA World Cup “Our Stories”, featuring highlights and exclusive fan reactions. The 2018 World Cup, hosted by Russia, runs from June 14th through July 15th.
Howie Long-Short: To boost advertiser interest, Snapchat commissioned a recent study (using internal data and insight from Nielsen) on the company’s “unique audience”; users more active on SNAP than they are on other social platforms. The study focused on a subset of users interested in sports and sports-related content. It found SNAP users are more likely to be sports fans (i.e. watch, attend, stream games) than non-users, are more active on their smartphones at sporting events (important to activate and connect with fans) and “feel a stronger connection to sports” (i.e. spend more on officially licensed products). That sounds like a platform all sports leagues might want to explore.
Fan Marino: Twitter is reportedly exploring the concept of implementing micro-payments that would enable sports fans to watch the endings of close games; think iTunes for sporting events. I don’t see it. Fanatics (or gamblers) who would care about the ending of a close game, already have access to the out-of-market packages. The casual fan will simply continue to catch the highlights as soon as the game ends, for free. Proponents of this idea point to video games and the success in-game micro-payments, but gamers are engaged. I don’t believe that’s a valid case study.
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Last night’s Cardinals-Seahawks game marked the halfway point in Amazon’s (AMZN) season long experiment streaming Thursday Night Football, and according to Jim Lorenzo, head of sports, Amazon Video, the company is pleased with viewership numbers (8.6 million through 5 games), engagement (51 minutes) and the reliability/quality of their cloud-based streaming service. Through the first 4 games, AMZN self-reported viewership figures that surpassed what Twitter (TWTR) drew last season; particularly noteworthy as Amazon requires Prime members to log-in, while TWTR’s stream was free (TWTR also has 330 million users compared to 65-80 million Prime members). Amazon will stream this week’s inaugural Next Gen ATP Finals, but beyond that, Lorenzo says that it is too early to say if the company will pursue future exclusive sports broadcasting rights.
Howie Long-Short: In an interview with Andrew Ross Sorkin at the NYTimes Dealbook conference, Mark Cuban spoke of the “large entertainment media platforms” (i.e. Facebook, Google) and their inability to be “truly effective in recreating audiences”. Cuban says that media consolidation to this point has been “irreverent” and predicts that broadcast rights will continue to skyrocket. You won’t find an argument here. While leagues want to play in the digital space, digital-only broadcast deals aren’t coming anytime soon. NFL Senior VP, Digital Media, Vishal Shah recently confirmed that point saying, “we continue to think some of the best days are ahead [for traditional TV partners] despite some shifts in the media landscape.”
Fan Marino: While Amazon is pleased with their viewership numbers, ESPN (DIS) is less than pleased with the 15% audience decline (to 1.138 million) “NFL Countdown” has seen this fall. You can place the blame on Sam Ponder, who replaced Chris Berman after 31 years as the show’s host, but the audience decline began last season (-10% YOY) after Tom Jackson’s 2015 retirement. The appeal to Countdown was the chemistry between Boomer and TJ. Now, it’s just another pregame show.
Amazon Sports Execs Pleased With Thursday Night Football Quality, Numbers Through First Half of Season
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A study published by the Economic Enquiry, found that Twitter (TWTR) is a better predictor of sporting event results than odds makers. During the ’13-’14 English Premier League season, mathematicians at the University of East Anglia (U.K.) used software to analyze 13.8 million tweets (5.2/second). They compared the results with in-play betting on Betfair (PDYPY) and found that at any given second, a positive “combined tone” about one team indicated that team had a better chance of winning than the odds suggested. The software’s recommendations produced an average ROI of 2.28% on 900,000 bets; particularly astounding when you consider PDYPY gamblers lost an average of 5.41% on those same matches.
Howie Long-Short: The predictive power of social media works if you’re analyzing the right sections of the crowd. TWTR can beat the house. Unfortunately, the average gambler lacks the ability to analyze the tone or crowd worth following; and certainly, not in real time. The “wisdom of crowds” isn’t going to put casinos out of business.
Fan Marino: Speaking of gambling, casinos were illegal in Japan until parliament passed a controversial law last December allowing them to be part of larger resorts. Now American gaming companies are actively competing to gain foothold in a market that can be “bigger than Las Vegas”, according to Chairman of MGM Resorts International (MGM) James Murran. Both Las Vegas Sands (LVS) & MGM have repeatedly stated they would be willing to spend at least $10 billion in Japan, while Melco Resorts & Entertainment (MLCO) has expressed it would be willing to spend “whatever it takes” for the opportunity.
Twitter Could Be The Key to Successful In-Play Sports Betting, Says Study
The NFL is reporting that Thursday Night’s Bears/Packers game, the first to be streamed by Amazon (AMZN), saw 1.6 million people log-in to watch the game. The retail giant averaged 372,000 viewers, who watched for an average of 55 minutes; a significant increase from the 266,000 averaged during Twitter’s (TWTR) first stream last season. The comparison is noteworthy as Amazon required Prime members to log-in, while Twitter’s stream was free. 14.7 million people watched the game on traditional broadcast television (CBS).
Howie Long-Short: Amazon sold ad packages for their streamed broadcasts for $2.8 million. While the company will not state how many minutes are included within each package, they are offering advertisers a unique value proposition; the ability to track sales. AMZN is giving advertisers data reflecting the number of people purchasing or searching for a specific product, during or immediately after the ad streams. It’s a competitive advantage that not even Google or Facebook can match.
Fan Marino: Of course, the television audience destroyed AMZN’s viewership numbers. Size matters. No one is choosing to watch a game on their phone/tablet/laptop if the option to watch on a larger television screen exists.
Amazon’s First NFL Game Draws 372,000, a Fraction of TV Audience
Comcast Spectacor, the sports and entertainment arm of Comcast Corporation (CMCSA), purchased the expansion rights to the Philadelphia franchise of the National Lacrosse League. The team will begin play in December 2018; with home games set to be played at the Wells Fargo (WFC) Center. A fan vote will determine the team name. The NLL has an OTT streaming service with 25,000 paying subscribers. The league’s Game of the Week, which airs on Twitter (TWTR), draws an average of 350,000 views.
Howie Long-Short: Comcast Spectacor, which owns the Philadelphia Flyers, is the 4th NHL owner to buy an NLL franchise. It’s a smart acquisition for several reasons. The league demographics are attractive, with a high percentage of college grads; meaning the team should be able to demand strong returns on advertising and sponsorship opportunities. The digital first business model aligns with Comcast’s broadband business; as the service becomes essential for OTT subscribers. Most importantly, the company’s strength is in hosting events and building businesses around pro sports teams; both on the merchandising and sponsorship side. It’s what they do.
Fan Marino: Historically speaking, Philadelphia has been supportive of box lacrosse. The Philadelphia Wings won 6 championships over 28 years in the city; with the team regularly bringing in crowds of 10,000+/game. I’m bullish on their ability to build a fan base, as I don’t believe they are starting from scratch.
Fans get to vote on team name for new NLL Philly Lacrosse team
The San Francisco 49ers have ended a stadium-wide, in-seat, food delivery service that failed to catch on with fans at Levi’s Stadium. While the team has yet to comment on the decision, it does not make sense to continue staffing a service that was failing to gain traction or generate a profit. Fans sitting in premium sections will continue to have access to the service. It is worth noting that VenueNext (platform that powers the service) does not have another client that offers stadium-wide in-seat concession delivery, as Grubhub (GRUB) and competing food delivery companies look to enter the space.
Howie Long-Short: VenueNext, originally formed in 2013 to help the 49ers develop the mobile application for their new stadium, raised a $9 million Series A round in January 2015. Live Nation Entertainment (LYV) and Twitter Ventures (TWTR) participated in the round. The company raised an additional $15 million in October 2016 to expand its offerings beyond sports & entertainment, having since added clientele within the hospitality and healthcare verticals, and into Europe.
Fan Marino: VenueNext isn’t just a platform to support a food delivery service, but a way for teams to enhance the in-stadium fan experience. Fans can find parking help, their way around the building, mobile ticketing, exclusive team content and merchandise within a team’s custom app. Teams will market these apps as a way to enhance the fan experience, but call them for what they are, a way to gather data on attendees so they can turn around and market to them.
Delivery of food and beverage to all seats off the menu at Levi’s Stadium
Draft, the daily fantasy sports application purchased by Paddy Power Betfair (LON: PPB) back in May, is making its push to compete with DFS market leaders DraftKings and FanDuel, as the NFL season gets ready to kick off this weekend. Instead of burning through cash on TV and radio ads, Draft’s strategy is to reach sports fans on social media, through their favorite athletes. Shaquille O’Neil is hosting a Week 1 head-to-head contest for his 14.6 million Twitter (TWTR) followers, while Chad Johnson, Michael Vick, Richard Sherman and Antonio Brown are also endorsing the DFS app.
Howie Long-Short: FanDuel and DraftKings have a huge lead in the DFS race, but those companies have spent the last year in the courtroom. Draft now has a market leading gaming operator backing it and a user acquisition strategy that makes sense. Expect Draft to become a household name.
Fan Marino: Athlete endorsements are great, but the best way for Draft to acquire users quickly is to promise them an even playing field (i.e. no sharks). During the first half of the 2015 MLB season, 1.3% of players paid 40% of the entry fees while winning 91% of the profits, on DraftKings & FanDuel. The casual player needs to believe they can win.
Floyd Mayweather, Shaq, Richard Sherman are all promoting the same daily fantasy app