The State of Live Streaming in 2021
Video dominates the internet, so much so that Cisco has predicted that 82% of all IP traffic will be video by 2022. COVID-19 has goosed that growth. Streaming video, especially to mobile, is globally essential for work, entertainment, and health. At the peak of the lockdown, mobile networks held up remarkably well to the strain of additional data traffic, as work-from-home data usage spiked dramatically. For instance, AT&T reported a 22% increase in its core network traffic and a 30% increase in wireless voice minutes. The new combined T-Mobile/Sprint saw mobile hotspot usage spike 60%, while tethering was up 57% for T-Mobile and 70% for Sprint.
In April 2020, Akamai CEO Tom Leighton noted that global internet traffic increased by about 30% during the previous month. "That's about 10 times normal, and it means we've seen an entire year's worth of growth in internet traffic in just the past few weeks. And that's without any live sports streaming."
A report from Conviva shows that between Q3 2019 and Q3 2020, the time spent watching streamed video on mobile rose 30% globally, with video on demand seeing 34% growth and live content up by 16%. Grand View Research calculates that the global video streaming market will reach $223.98 billion by 2028. That's a compound annual growth rate (CAGR) of 21%, and live video will show the fastest growth.
COVID-19 Accelerates Sports' Digital Transition
Last year's suspended animation exposed the structural issues that have long plagued the sports and sports broadcast industry. Digital engagement led by live streaming offers a way out, but at the cost of a seismic jolt to business models.
The need is dire. According to Pete Giorgio, the U.S. sports practice leader at Deloitte, NFL teams likely lost an estimated $5.5 billion in stadium revenue. The company's 2021 U.S. sports outlook says that because the NBA finished its 2019–2020 regular season and playoffs in a fanless "bubble," it likely lost about $500 million.
It's imperative to find ways to bring fans back to arenas and to create alternative sources of revenue in 2021. Deloitte's prescription is stark: Sports leagues and athletes should move beyond traditional broadcasts and start interacting directly with their fans. "First and foremost," the company says, "it's critical that sports organizations invest in the infrastructure required to power digital channels, streaming platforms, and augmented and virtual reality solutions."
Ampere also notes that the suspension of live sports may have had a long-term impact on fans and claims that it affects their propensity to pay to access sports on TV. Its Q3 2020 polling shows that in 22 markets, 34% of sports fans are willing to pay to access at least one sport, which is down from 42% in Q3 2019. This trend is sharpest in Europe and North America.
Reduced incomes and higher unemployment are two reasons for this shift, but Ampere also points to a greater share of the household budget going to premium subscription video-on-demand channels. However, Ampere believes this has not yet translated into widespread premium pay TV sports cancellations.
"The next twelve months will prove crucial for live sports," says Minal Modha, consumer research lead at Ampere. "As broadcasters begin to sign new rights deals or renew current contracts, many will seek to leverage the pandemic to reduce fees. If consumers do begin to cut the cord, this will only provide further ammunition and may see a widespread re-evaluation of sports rights."
It's not as if sports clubs and franchises are blindsided. A report from MediaKind finds that while most sports rightsholders still define their direct-to-consumer (D2C) platform as complementary to broadcast, they now also see it as an essential part of their future distribution strategy and of building direct touchpoints with fans. In addition, the report says that the user experience bar is rising from one of pure entertainment, or presentation, to one of engagement, or interactivity. It shows an even split between rightsholders who use their D2C platform as a content hub only and those who explore a whole range of fan engagement tools to exploit OTT's full capabilities.
"D2C platforms … now form an essential part of any strategy for live sport," asserts Raul Aldrey, chief product officer at MediaKind. "While current D2C services are largely representative of an emerging market, this sector is ripe for experimentation, exploration, trial and error, innovation, creativity, and risk-taking—with big rewards for those that get it right."
Broadcasters Monopolize Rights, but Cracks Widen
So where does this leave the major sports contracts? Largely, as they were, with the bulk of live games for the major leagues airing on TV. That includes the NFL, whose contracts with NBC, CBS, and Fox are due for renewal in 2022. According to a Nielsen study commissioned by the NFL, Super Bowl LIV in February 2020 was watched by about 135 million people in the U.S., with most of them attending viewing parties around a TV. From a TV ratings perspective, the Super Bowl's viewing figures wrapped up a positive year. The league had a 5% increase in viewership for the 2019 regular season, attracting an average audience of 16.5 million viewers per game.
However, the NFL has also continued to experiment with exclusive live-streamed games, such as the San Francisco 49ers-Arizona Cardinals game on Twitch and Amazon Prime Video on Dec. 26, 2020. The viewing experience included interactive features like X-Ray, which lays stats over the game, and user-selectable alternative audio options. Similarly, a wild-card game in January 2021 was streamed exclusively on NBCUniversal's Peacock. The league has also streamed games exclusively on Twitter and Yahoo.
An article from Deadline suggests that while Amazon is an NFL streaming partner for Thursday night games, these streams "have not yielded blockbuster numbers." It notes that while linear ratings continue to erode, "most analysts expect incumbent rights holders to retain their rights, even at an expected hike in valuation."
That's certainly the case for MLB, which last year extended its broadcast contract with Turner Sports for a further 7 years in a deal reportedly worth $3.2 billion. That averages out to $470 million per season. The deal will also allow the WarnerMedia-owned group to stream live MLB games and highlights on its digital platforms, including Bleacher Report.
In a 2018 deal worth $5.1 billion. Fox sewed up the rights to air MLB games until 2028. And should ESPN re-sign with MLB in 2021, as expected, the league would see its TV revenue increase to approximately $2 billion per year, up from $1.5 billion. By comparison, MLB's separate $300 million agreement with DAZN is small, but ESPN will take note that its virtual lock on showing an extended package of 16 wild-card games in 2020 not only won the TV ratings (averaging 1.87 million viewers per game), but delivered a huge boost for ESPN's digital space. During the wild-card playoffs, ESPN.com had its largest digital audience of 2020, with more than 60 million page views of MLB content across Sept. 30 and Oct. 1.
Notable other live-stream pacts of 2020 included the WNBA's renewal with Twitter to live stream 10 regular season games.
Sinclair Broadcast Group, however, wrote down the value of its regional sports networks (RSNs) by $4.23 billion. It "grossly overpaid for cable channels hobbled by cord cutting and shrinking subscriber revenue," according to Bloomberg. These RSNs are former Fox assets
that Sinclair acquired for $9.6 billion in 2019. Sinclair CEO Chris Ripley says there is still long-term value in sports rights, but hints that returns might increasingly come from betting. He suggests "reinventing the RSNs around gamification, around community-based fandom and around direct-to-consumer [streaming apps]."
Social Broadcasting and Gamification
In 2021, expect to see live-event rightsholders and broadcasters "gamify" their video offerings with a greater degree of social interaction and mixed-media experiences. Nowhere has this crossover been more acute than on game-centric video platforms. Indeed, the lockdown resulted in particularly explosive growth. Statistics from StreamElements and Arsenal show that the leading sites all grew massively year over year from April 2019 to April 2020: 101% for Twitch, 65% for YouTube, and 238% for Facebook Gaming.
The related global esports market, which generated revenues of more than $1 billion in 2020, is forecast by Newzoo to hit $1.6 billion by 2023. Even if 2020 earnings took a knock while spectator tournaments closed, the successful experiment that many physical sports took by replacing live action with video game simulations will be a lasting legacy. For example, the pandemic led the NBA's Phoenix Suns to simulate games on NBA 2K, streamed on Twitch. In its debut stream, which was set to mimic the team's scheduled game against the Dallas Mavericks, the Suns' Twitch stream drew 221,000 views.
Likewise, SRO Motorsports switched real races to esports, even holding them at their originally scheduled date and time. SRO Motorsports drivers competed in the game simulation from their homes. An in-game director team was connected to AWS Elemental MediaLive, and live commentators were connected directly to the game server. AWS Elemental MediaLive output streams to social media channels, while AWS Elemental MediaConnect generated a live stream using Zixi for delivery to the GT World YouTube channel, Motorsport.tv, Eurosport, and CBS. Online, the broadcasts earned more than 500,000 live-stream views, and more than 4.4 million live-stream impressions were delivered across multiple platforms, including YouTube, Twitch, Facebook, and Twitter. AWS says that SRO Motorsports was "impressed" at the ability to stream the games in high quality at 60 fps to multiple destinations, "something well outside the traditional TV workflow."
In addition, Deloitte claimed in a 2019 report that "there are more millennials … who have a gaming subscription than those with a traditional Pay TV subscription—and close to one-half of millennials and Gen Z pay for both a gaming and video streaming service."
Steve Miller-Jones, VP of edge computing and solutions architecture at Limelight Networks, says that in 2021, "We can expect gambling integration and personalised services that provide alternative commentaries, live audio feeds from the referee's mic, and crowd sounds for an authentic stadium experience. We will also see more features focused on social streaming, allowing friends to watch together. These features might be short-lived, but those that really engage audiences will remain and change how live streaming experiences are defined. We're not there yet, but we're approaching a model where the user controls the content experience for themselves."
It's not just live sports that were trending on sites like Twitch last year. During the Black Lives Matter protests, the site was prominent as a hub for airing sit-ins and marches. According to The New York Times, "Some Black Lives Matter protesters and citizen journalists have created Twitch channels just to broadcast the protests, while gamers who were already on the site switched to showing the demonstrations instead of video games." In addition, "Many said they chose Twitch because they were familiar with the site from video games and wanted to leverage an existing tech-savvy audience. Twitch also has some technical tools for live broadcasting that other platforms lack, they said, like a robust moderation system to avoid spam in chats."
Video the Killer App for 5G
With video forecast to constitute 79% of all mobile network traffic by 2022, it's no wonder that mobile operators consider video to be their killer app. And with 5G as the platform, the opportunity for telcos is to support the best mobile video and also become home to a new kind of video experience—something better than what has gone before. This doesn't mean just enhanced mobile broadband for streaming live events in HD or UHD; 5G is foundational for more immersive and more interactive video experiences.
"Our number one priority in 2021 is to expand our network and the quality of our video streaming with enhanced protocols like 4K and HDR to deliver a TV like experience over the public internet," explains Darren Lepke, head of video product management at Verizon Media. "Secondly, we're addressing emerging use cases that we see broadcasters investing in including realtime video and interactivity, wagering and gamification. We're developing new video protocols that deliver realtime video at scale and integrating things like gamification engines and video chat features so you can watch [a Premier League] match with your mates."
In 2020, operators began to migrate to standalone networks away from legacy network technology, finally opening up the speed and latency gains of 5G. The first to reach this mark in the U.S. was T-Mobile, fueled by the April 2020 completion of its merger with Sprint. Verizon began moving traffic onto its new 5G standalone core in the second half of 2020. Both have allied with sports to showcase their services.
T-Mobile partnered with MLB and put mini 5G-powered cameras on the caps of players and coaches to provide a first-person view of the action in pre-game practice before the first game of the 2020 World Series. T-Mobile's 5G FieldCams and BatterCams streamed live on MLB's digital platforms, including the MLB VR app. "A broadcast like this has never been done before, and it offers a glimpse at how wireless connectivity is set to transform the way we watch and interact with live sporting events and more," says Neville Ray, T-Mobile's president of technology.
Verizon and the NFL have a multiyear plan to enable new fan experiences based on 5G connectivity in all NFL stadiums (13 installed to date). To develop new services required by broadcasters, rights owners, sports teams, and leagues, Verizon is also adding
real-time streaming tech from Phenix Real Time Solutions "to enable sub-second latency for live sports at scale." For example, multi-camera viewing can make "remote sporting events more like in-venue experiences with the ability to see plays from any angle," according to Verizon. "Real-time streaming also provides viewers with brand new ‘watch together' social experiences, such as co-viewing synchronized live streams, in-game trivia, and even wagering, allowing fans to host virtual watch parties with family and friends." Additionally, in the future, fans could potentially experience post-game player interviews via 360° holograms, Verizon says.
Yahoo Sports is already using some of these real-time streaming features. Up to four NFL fans can watch live games together via the Yahoo Sports app. This "Watch Together" function debuted during the Kansas City Chiefs season opener versus the Houston Texans on Sept. 10, 2020. It follows similar concepts introduced by U.K. broadcasters Sky Sports and BT Sport when live Premier League soccer resumed post-lockdown.
Having played second fiddle to AT&T and Verizon for years, T-Mobile is making the most of its current position as the nation's biggest mobile network. With 5G, for example, it argues that it is not just serving more people (its 5G network was "live" in more than 210 cities as of November 2020), but doing so in a better way. "The fact is that fewer than 1% of Americans can even find Verizon Ultra Wideband 5G … because it doesn't scale," contends Mike Sievert, T-Mobile's president and CEO. "The bottom line is this: they simply bet on the wrong technology. Mid-band is the Goldilocks 5G band. It has massive, transformational capacity. AND it can reach for miles. T-Mobile is the ONLY one with big swaths of mid-band dedicated to 5G. … Where customers have both our low-band and mid-band 5G, we're seeing transformational speeds [of] 300 Mbps average, with peaks up to 1Gbps."
Let's park that there and leave them to slug it out.
Automated Sports Production
AI-driven live production is spreading like wildfire among college and high school sports. Israel's Pixellot has a deal with the National Federation of State High School Associations (NFHS) and PlayOn! Sports that will allow it to install 20,000 automated video production systems into U.S. high schools by 2026 and to produce more than a million live-event broadcasts per year. "The automatic production field is causing the entire sports industry to rethink its approach," explains Yossi Tarablus, Pixellot's director of marketing. "COVID accelerated the automated content creation evolution."
According to Lepke, "The most deployed use of AI/ML [machine learning] is for video analytics to enhance metadata generation and improve what is otherwise a very manual process. As we advance AI/ML we will see more use cases in live content such as being able to detect in a live stream if a goal or pass or shot was blocked. This will enable smarter user experiences though on-screen graphic overlays."
Olympics Return and 8K Rises
One result of the delayed sports seasons in 2020 will be a bumper 2021, with international events such as the Tokyo Olympics and 43rd Ryder Cup back in business (with or without spectators). FIFA World Cup soccer qualifiers are also scheduled for 2021 ahead of the Qatar tournament in 2022. "The next two years will be a marketer's dream because of the very rich pipeline of sports events," says Paul Gray, Omdia's senior research manager. In addition, he notes that sales of 4K TVs will be boosted, and 2021 will be a "tremendous" year for broadcasting 4K content.
Despite the dearth of live sports content, TV sets were popular sellers during the lockdown, as consumers upgraded their entertainment experience. In the U.S., unit sales of TV sets 65" or larger increased by 52% in the first half of 2020, and sales of sets larger than 65" grew 77% in Q2 2020. Gray argues that 8K will play a growing role as a professional performance format (for acquisition if not yet for distribution) and that the 2024 Olympics Paris will see a big leap in 8K sets sold.
A few high-end smartphone models offer 8K video capture, including Samsung Galaxy S20, Xiaomi Mi 10, and RedMagic 3. This number is likely to increase during 2021 and beyond. "Most owners today may only dabble with 8K video, partly because of its large storage requirements (600MB per minute) and because of the slower frame rate relative to 4K and HD capture," according to Deloitte. "However, consumers who do shoot videos in 8K capture could share this content via online platforms such as YouTube or Vimeo. Over the course of 2021 and the coming years, the volume of 8K videos captured on a smartphone should steadily grow as smartphone memory capacity increases and frame rates go up."
Bulldog DM CEO John Petrocelli discusses the evolution of live music streams since the start of the pandemic, and lessons he believes the music industry has learned from a year essentially without in-person events about creating compelling, interactive, collaborative live streaming experiences for artists, their fans, and invested brands.
Mobeon CEO Mark Alamares discusses how the gaming industry is influencing live streaming production, particularly in the VR/AR/MR/XR space, and the trend toward virtual production and the rise of virtual talent in this clip from Streaming Media Connect 2021.
Zixi's Eric Bolten and Gigcasters' Casey Charvet discuss how the pandemic hastened the inevitable transition to virtualized production in live streaming in this clip from their "Future of Live Streaming" panel at Streaming Media Connect 2021.
Companies and Suppliers Mentioned