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July 5, 2023

Editor Note: Andy Marston takes the controls on Wednesday mornings. You will find his latest Sports Pundit column is below. I'll be back tomorrow.

Showtime Fights Back Against Piracy With Marquee Events

Errol Spence Jr. recently declared his July 29th matchup with Terence Crawford ‘the biggest fight in boxing'.

A boxer expressing hubris at a pre-fight press conference is typical. Spence’s subsequent appeal to fans to purchase the Showtime pay-per-view clash, as opposed to illegally streaming it, was not.

“Support us because we’ve got to show these people in suits, and these other fighters, that there is a reward in taking risks,” he said.

Spence-Crawford has long been amongst the most anticipated fights in boxing. Stephen Espinoza (president, Showtime Sports), one of the so-called ‘suits’ the WBC, WBA and IBF Welterweight champ was referring to, explained that illegal streaming has been a factor in keeping it from being made.

The challenge is accurately “projecting revenues given the unpredictability of piracy,” he said. “If what the fighters view as fair is not what any of the businesspeople think can be generated because of [illegal streaming], then fights do not happen.”

Just how much revenue is being lost to digital theft?  

“Our best guess is [that] buys are being depressed by at least 30 to 40%,” Espinoza said.

The piracy problem is not unique to boxing. It poses a threat to all sports organizations, broadcasters, and content providers.

“Piracy is attractive to consumers [as it] effectively removes many barriers that prevent customer development, most prominently discovery and cost,” Yannick Ramcke (head of OTT, One Football) said.

Synamedia and Ampere Analysis estimated in March 2021 that illegal streaming was costing the industry at large as much as $28.3 billion per year.

And the trend shows no signs of slowing down, either.

The cost-of-living crisis has made it even more challenging for fans to afford expensive subscription packages and pay-per-view events. As household budgets have tightened, fans are increasingly turning to illicit streaming as an accessible and affordable alternative to enjoy sports content.

It may make sense for some rights holders and broadcasters to increase the ease in which fans can legally consume content. In theory, growing distribution could result in more advertising dollars that would off-set lost pay TV revenues (see: big four teams signing OTA distribution deals).

“Increased free-to-air availability can help widen the top of the funnel audience, to be converted into paid,” Ramcke said.

But that approach is less viable in boxing than it is in other sports. Fight sports have historically been forced to rely on pay television and PPV to make up for a relatively limited sponsor pool.

“There are simply some brands who do not want to be associated with something that violent or bloody,” Espinoza said. 

The premium cable network is trying to combat the growing threat in other ways, including prompting action from hosting services, deploying dynamic injunctions, and investing in manual and automated detection tools.

Espinoza said that each of those methods were found to be increasingly effective when paired with an increased understanding of human behavior; there is social pressure to consume marquee events legally.

“We see that [for big fights], people get together in large groups to watch it,” Espinoza said. “The last thing you want to do is invite ten of your buddies over to the house to watch the fight and you've got a stream which is dropping out or lagging every few minutes. It’s not a good experience.” 

The Showtime exec cited the April 22nd Gervonta ‘Tank’ Davis- Ryan Garcia PPV, which overperformed projections, as evidence. That fight reportedly generated more than 1.2 million PPV buys.

Spence-Crawford is a marquee event that will spawn similar viewing parties. It should also draw more casual fans than the average PPV, which bodes well for buy totals.  

“We had a lot of first-time casual fans who didn't want to take the time, or weren't interested in taking the time, to figure out how to illegally stream,” Espinoza said about the Davis-Garcia card.

Piracy is not going away. But by staging marquee events that appeal to fans outside hardcore boxing circles more frequently, stakeholders can spur the social pressures needed to limit it.

Showtime PPV will broadcast the Canelo Alvarez/Jermell Charlo bout on September 30th.

About the Author: Andy Marston leads growth and marketing at Zone7, a proprietary AI platform committed to helping sporting organizations unlock greater performance data insights. Based in London, he founded Sports Pundit in 2020. In addition to this column, he publishes a ‘Highlight Reel’ newsletter each Friday breaking down key stories from across the industry. You can find him here.