Video: How Rights Complicate Sports Streaming
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Read the complete transcript of this clip:
Mo Goyal: What challenges do today's sports productions face? First and foremost, it's about the cost of getting broadcast rights.
One of the studies that was done recently has shown, over a 12-year period, the increasing cost of accumulating or acquiring those rights. So we see in 2006-2018 for example, the Premier League, the cost of getting those rights or the content rights has increased enormously. $7.7 billion is what BT and Sky paid for the current set of rights.
Rights themselves are actually starting to become the more significant number, or revenue generator for the sports leagues themselves. Up until 2018, gate revenue was probably the leading contributor to sports revenues, but now it's media rights.
In fact, based on the study that was done by PwC, the media rights will continue to grow at about 5% annually over the next 5-10 years. The other challenges for those big companies is not so much the cost of getting these digital rights or these content rights but it's the new players. The competition's getting a little bit busier.
Now you have what they call the FAANGs--Facebook, Amazon, Apple, Netflix, and Google--getting into the game. In some cases, they’re directly competing for those rights; in other cases, augmenting the already-existing offerings for the traditional linear broadcaster by presenting another platform to present that content.
In some cases, they’re working in parallel with the existing TV broadcasters. The NFL is a great example where for Thursday night broadcasts, which they've given to the NBC or NFL Network, they've also given access to YouTube last year to present live games in parallel. They see a trend in which viewership is moving from one to the other and they are trying to monetize it as well.
You can see the other platforms are either going to directly against those big broadcasters or they're providing an alternative stream.