Can a Customized, Interactive Viewing Experience Solve Sports’ Existential Threat?

Caffeine

Sports broadcasts have remained virtually unchanged over the last 50 years – 2-3 guys in a booth, a long shot, a bunch of replays and some commercial interruptions. But fundamental shifts in the behavior of digital natives has forced rights holders to offer a more customized, interactive viewing experience. ESPN has announced that “portions of the X Games Aspen 2019” will be available on Caffeine (a social broadcasting platform) and the G-League announced it has extended and expanded its streaming pact with Twitch; both platforms will give viewers the chance to “host their own interactive streams” with commentary free broadcasts. The NFL has yet to make the leap into user generated content, but Amazon Prime Video has announced that Hannah Storm and Andrea Kramer will return to call Thursday Night Football games on a secondary streaming feed in 2019 (Joe Buck/Troy Aikman have the call on the main feed).

Howie Long-Short: Tom Richardson, a former media exec at the NFL, NHL and AOL, is the head of strategy and development for Mercury Intermedia (a leading mobile and connected TV app developer) and a professor at Columbia University, where he teaches digital media in the Sports Management grad program. To give you a better idea of what a customized interactive viewing experience would entail, Tom says “envision private viewing rooms. Essentially a Skype or Zoom-like experience where you and your friends can take the party. The environment would enable you to see everyone’s faces, offer real-time commentary, share content and post emojis.”

It sounds like you’re describing Caffeine and Twitch. Are one of those companies (or another social streaming platform) the future of live sports broadcasting?

Tom: There have been various attempts throughout digital media history to create alternative digital consumption environments for content, but aside from the big social platforms, the only one that has really had success at scale is Twitch. The TV outlets realize that to appeal to and attract younger millennials and Gen-Z digital natives they’re going to need to provide customization elements – we’ve raised a generation of viewers who’ve had the ability to dictate how they consume media. So, the question is, even with new viewing options and user experiences, will it be enough to attract and retain young fans. It’s an unprecedented challenge for the business.

Doesn’t the fact that Caffeine and Twitch have 21st Century Fox and Amazon, respectively, backing them, create an advantage?

Tom: Yes, but there are no guarantees. Looking back, there’s a fair amount of roadkill – startups that came in with the expectation that the property – because if its promotional reach and clout – would be able to change user behavior. But alas, there have been very few examples of success. 

If viewership for live sports programming is declining, how can any rights holder justify additional broadcasts?

Tom: It’s about evolving the core product. We can’t assume millennials, Gen-Z, with a very different mindset about media, are going to sit in front of the TV and watch a 3-hour broadcast with 70 30-second commercials – especially with so many grazable highlights, GIFs and memes available.. Rightsholders need to look at it as a marketing challenge vis-à-vis audience segmentation – and to draw this young crowd you need to give them more options. Choice is an essential ingredient in modern media.

So, you would continue to throw good money after bad (as it relates to a declining audience)?

Tom: I would think of it as an investment in audience development. If you are a major sports league and you’re thinking about the future, then the answer is you absolutely put money into it. What other option do you have? Do you want to look at a potential barren wasteland of significantly fewer fans 10, 15, 20 years from now? Because it will be if you don’t actively develop the millennial/Gen-Z fan. I think we’re looking at a serious maybe even existential threat, at least for some sports – over the next couple of decades; especially with sports that don’t translate well to modern media or are relatively unpopular with young people. Remember, another huge factor is the rapidly growing competition from native digital sports – most notably video gaming.

Don’t these alternative platforms pose a threat to traditional broadcasters – and ultimately to the billion-dollar TV deals the leagues have with them? (lower ratings = lower media value)

Tom: If the viewers are not there in the first place – which is the case with certain leagues and demographics now – then, what is there to lose? It’s not like they’d be siphoning off existing users. Maybe you appeal to a percentage of millennials or Gen-Z that aren’t currently tuning in. I don’t want to be overly glib about it, but if young fans are not watching your games and they’re disengaging from your sport – forget about TV ratings, you need to be proactive in warding off a future disaster scenario.

Fan Marino: While on the topic of rights agreements, Sports Illustrated recently announced it has inked an agreement with Liverpool FC to carry matches on the subscription streaming service SI TV. However, with NBC holding the exclusive rights to broadcast Premier League games in the U.S., Liverpool game broadcasts on SI TV will be subject to a 7-hour delay. The premise of taking a club that has among the biggest audiences in the U.S., buying their broadcast rights and building shoulder programming around them is logical. “Like all skinny bundles, the primary way they can have any success is to get exclusive or semi-exclusive third-party content, but broadcasting on delay doesn’t make much sense. Serious fans will purchase Liverpool TV and casual fans seeking out highlights, can find them on social.”

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Author: John Wall Street

At the intersection of sports & finance.

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