Premium sports market: Online migration and tough competition over subscribers

31 October 2018

With the transition from traditional to digital viewing in full swing, sports content is in a league of its own. The sports genre has both exceptional strength as a driver for “live” viewing and creates very loyal customers or subscribers. Even though great sport events still to an extent counterweight the decline in traditional viewing, it is obvious that also sports viewing is heading digital. Comparing this year’s viewing with the rather uneventful year of 2017, we see a correlation. The average viewing time for the majority of 2018 scores lower than 2017 except for a few occasions, mainly coinciding with major sports events.

Viewing time per week, traditional TV (3+ consolidated viewing, min)

As shown in the graph, 2018 overall viewing is lower than 2017 (Jan – Oct declining by 6%). Consequently, the already fierce competition for major sports rights has ramped up even further in the digital segment as new actors are looking to establish themselves. So, for the incumbents, it is really important to retain the most attractive rights and thereby the high paying households. Global, and rather non-endemic, giants such as Facebook and Amazon have a great appetite for major sports rights and have already begun to challenge the old order. For instance, Amazon has acquired Premier League streaming rights in the UK and Facebook has acquired Champions League rights in Latin America.

Zooming in on the Nordics, the techies have not yet made any obvious impact on the sports rights market. But there are other new kids on the block. For example, rights owner IMG has launched its own streaming service Strive, distributing Spanish La Liga and Italian Serie-A in Scandinavia. This allow consumers to cherry-pick – surely not what subscribers are used to (i e to single out specific leagues).

Mediavision’s analysis of the Swedish sports rights market reveals that premium sports subscribers are moving online at an increasing rate. Household penetration of premium sport SVOD (subscription video on-demand) increased by 31% YOY (year-on-year) during Q2 2018. Furthermore, international football is the highest valued sport among consumers in the ages 15-74. Broken down in specific leagues, Premier League is the league that consumers express the highest willingness to pay for.

Moving forward, the online migration and competition among actors is likely to increase further. There’s also the looming possibility of FAANGs entrance on the Nordic sports rights market, both Amazon and Facebook have all the tools in place. Amazon’s streaming service Prime Video has been available in Sweden since December 2016, and Facebook recently launched its Watch service in the Nordics. Mediavision is following the development closely, the full analysis will be published shortly.