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Are Global Sports Streaming Rights Shifting?

Are there tectonic shifts afoot in the ultra-competitive and lucrative world of sports streaming licensing and rights, particularly in Europe, and how long can early entrants continue to lose money and still stay relevant? Evan Shapiro, CEO, ESHAP, discusses this topic with Ophelie Boucaud, Senior Analyst, Dataxis, in this clip from Streaming Media Connect in November.

Shapiro begins by mentioning that Disney failed to bring cricket to the streaming market in India because they did not understand the market there. He notes that in regions such as Europe, the Middle East, and North Africa, sports are a public service media and people are accustomed to watching games without paying any fees or seeing ads, but he thinks there is going to be a shift. He asks Boucaud if she sees a shift towards paid sports programming in those markets.

“It's already shifting in some markets,” she says. “If we take Europe, for example, sports rights are fragmented across different typologies of factors. So it's not just public service broadcasters, but you have telcos also investing in sports rights. So from their TV platforms, you have Sky, which has soccer rights in the UK and in other big markets. Canal+ in France used to be a big actor, but they actually stopped buying soccer rights due to the price. So telcos were very much engaged, and now they're retracting from the sports rights industry. You also have Pure Player on the OTT market. Amazon Prime also invested in soccer rights in France. They're also present across other Europe and the top five territories. You have DAZN, which is a really big actor in the German-speaking markets, and they're also quite active across the region and other dedicated services and smaller territories and smaller sub regions. In MENA (Middle East and North Africa), you have beIN, which is one of the two biggest TV platforms in the region. They also launched a service right before the soccer World Cup named TOD, which gained a lot of traction because they had the sports rights for the whole competition. So it's definitely a very interesting premium content to leverage and to gain reach, and what we see mostly with sports is it's not sustainable by itself because the rights are just crazy expensive.”

Shapiro says, “If you look at the United States, football is basically moving piece by piece to big tech: NFL Sunday ticket on YouTube, Thursday night football on Amazon. Even Peacock is going to have an exclusive playoff game in the first quarter next year. Apple's supposedly going to pay billions of dollars for Formula One here.” He asks Boucaud if she believes that the smaller paid television streamers will be able to compete against the giant tech companies.

“In the short term, likely not,” Boucaud says. “And that's why we've seen telcos going out of the market. We see also that broadcasters are not necessarily able to follow the hike in prices, but sports rights are very special in the way that they're quite disconnected from the real value of content. The way that you can monetize and make money out of sports content is completely disconnected to the price of rights. So usually it's leveraged as an incremental source of reach. You bring the fans on your platform and those will pay more. So you take your Revenue Per User (RPU) higher, but ultimately, it's always considered in a bundle with connectivity or with other types of content. And players like DAZN really killed the market for the established players. So we used to have sports packages on Sky that would be around 40 pounds. Now you have DAZN, and you can just take a monthly subscription for 15 pounds.”

Shapiro asks if DAZN is profitable, and Boucaud says that it’s not. “I just don't understand how they stay in business, to be blunt,” he says. “Just because they're spending all this money for sports rights. I can't imagine they're profitable. Someone's going to buy them at some point, right?”

“That’s the big question,” Boucaud says. “Not if, but rather when, exactly.”

Watch full sessions from Streaming Media Connect November 2023. We'll be back in person for Streaming Media NYC on May 20-22, 2024. More details here.

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