Tell me: where has the audience gone?
The current media market is fragmented. Broadcasters, publishers and media rights holders need to understand complex patterns of consumer behaviour, with consumption habits changing fast and business models struggling to keep up with the demands of an internet generation.
For those looking for guidance, fans of Spanish football may soon provide some valuable insight.
Earlier this month, OTT platform Premier Sports and major British broadcaster ITV acquired the UK media rights to La Liga, Spain’s popular top-flight football league.
The result of the deal, which broke the previous exclusivity held by Eleven Sports, was hailed as the potential “future of sports consumption”.
In essence, the deal shifts the structure from a pureplay digital streaming (OTT) service with Eleven Sports to a hybrid model that combines digital distribution with traditional broadcasting. Many in the industry have argued that this is unsustainable and that this simply highlights the folly of online streaming for major rights properties – indicating that traditional pay-TV subscription bundles are the only model that works. What has transpired, even if this was not the original strategic plan, may be the complete opposite.
Why should anyone outside of sports media care about this deal?
Sports video audiences have long been ahead of the curve when it comes to adopting new media and technology, consuming and paying for services whilst everybody else catches up.
Publishers in sport quickly discovered real-time conversations on social platforms generated demand for in-play highlights and live streaming. This engages viewers across a variety of platforms, building fanbases and loyalty beyond ‘headline events’.
The combination of amplified, real-time distribution and new forms of sports storytelling has created powerful new brands such as DAZN, Copa 90 and Bleacher Report.
The sports industry has paved the way for digital transformation in live video as Netflix has for on-demand streaming. The industry is ahead of the game when it comes to capturing and monetising viewers, either through premium content, advertising or sponsor partnerships.
The growth of athletes and teams as media properties has accelerated this trend, taking sports broadcasting beyond the purview of television to a plethora of digital platforms with content for every type of fan. This transformation has happened whilst rights holders are leveraging this brand value to drive viewers towards, you guessed it, TV broadcasts.
How La Liga performs across ITV, Premier Sports and Eleven Sports in the UK could act as a litmus test. Is TV actually dying, or has La Liga emerged with an optimum multi-channel distribution deal, reflecting the state of the here-and-now?
TV is dead, long live TV
Much like TV, video audiences have moved beyond looking at things in black and white. Those reporting on the rapid growth of digital media platforms tend to assume they are stealing TV audiences, but the truth is they are not.
TV has retained enormous reach. In the past 10 years, the average UK citizen has reduced its TV watching by about an hour per day from 4.5 hours in 2010 to 3 hours 23 minutes today. A 25 per cent drop in 10 years is significant, and the trend continues downwards, but this means TV remains the most important single media platform by some distance.
‘Older’ demographics watch TV. There has been growth in TV viewing for the over-65s in the last 10 years, primarily due to people living longer and watching more TV in later stages of life. Younger people and ‘millennials’ (if that is a segment anymore) watch TV too. Those ‘cord-cutters’ or ‘cord-nevers’ who don’t subscribe to a pay-TV provider still like watching OTT content, or using ad-supported platforms such as YouTube, on television screens.
Television screens are the fastest-growing platform for YouTube with 70 per cent growth last year. In fact, viewers in the US spent twice as much time watching ‘traditional’ TV channels on YouTube in 2018 than they did two years ago.
We can safely say predicting the death of TV has been premature. Media organisations that combine the power and flexibility of digital distribution with linear broadcasting benefit from the massive reach of both channels. When approaching foreign markets, like La Liga in the UK, this symbiotic relationship builds more meaningful value for the rights owner – despite the challenges with non-exclusive distribution.
This model is not new. The NFL has a similar distribution model which has led to huge audience growth in the UK and other overseas territories. This builds on the domestic model for the NFL in the US where games are distributed by free-to-air broadcasters (NBC), a pay-TV network (NFL Network), a digital platform (Amazon), and mobile and social players (Facebook, YouTube, Twitter, Verizon).
The same is true for the Australian Open which was available to watch live in the US on ESPN, Amazon Prime and its own website for the 2018 tournament. Tennis Australia also bulked up its social video strategy to further increase its reach and drive video audiences to Australian Open broadcasts.
Please, think of the advertisers!
The tug of war for ad budgets is well documented. On the one hand, TV’s mass market reach remains prominent, aligned to a media planning and buying market which understands how to buy TV audiences at scale. But digital media comes back with an upper-cut featuring targeting, rapid audience growth, engagement and measurability.
No need to fight, though. This is a tag-team match, not a royal rumble.
Yes, TV’s main strength is its reach. We look at TV from a brand perspective – some advertising won’t be relevant to everyone, but it might be someday. You might find that once you get a pet, or have children, all of the exposure you had to a certain dog food or baby clothing brand comes screaming back. TV still has the power to aggregate audience at scale, particularly for major sports events such as the Super Bowl, Olympics or FIFA World Cup.
Using demographic qualifiers around programming on TV takes you a step towards digital ads, and targeted TV advertising is a fast-growing market, but this is where multichannel advertising and digital campaigns come into play.
Digital ads can be extremely targeted, both in terms of audience preference and the context of the ad delivery. Marketers can get clever. Ads can be timed and tailored on location, platform, preferences, weather, past behaviour, demographics, the list goes on.
Here you will find consumers signalling intent much closer to the point of purchase, suggesting higher conversion rates, which is why digital ad budgets are beginning to bulge. The enormous growth of mobile app install ads and gaming demonstrate this – it’s hard to find a Fortnite ad on TV.
Yes, yes, you probably already know all that. So why is it relevant?
Build it and they will come
The opportunities for the distributors in this model are limitless. Not only will linear broadcasters such as ITV gain increased value from combining TV and digital ad sales, once the aggregate content viewership and engagement can be measured, distributors can also construct their own engaging, multi-platform ad campaigns to monetise sponsorship and brand partners on a broader scale.
For La Liga in the UK, both Premier Sports, an OTT-only service, and ITV, a linear broadcaster, can capitalise. Premier Sports now has the opportunity to leverage its premium content to drive subscriber growth on a pay-TV platform, while ITV can drive a non-pay audience to its channels. Audience acquisition can be delivered using traditional channels and supplemented through real-time highlights to social media, offering select content to live stream for free to social media, or creating completely new, bespoke digital content that supports the live games.
Live social shows can leverage the popularity of relevant influencers, while engaging viewers outside of traditional programming. The community-based nature of live social streams creates an enriching experience for consumers who want to join the online conversation around the content they care about.
The changing nature of digital sports can be seen in the US with the NFL and NBA streaming on Twitch, a gaming platform, combining differentiated commentary, co-streaming with influencers, gaming integrations using live data and statistics. The NBA G League is now a Top 30 live property on Twitch.
Content owners can also look to monetise social content through brand partnerships – ‘presented by’ integrations let both the brand and the publishers push their message across. Wrigley’s Extra gum is a great example of how a brand can involve its key message in content that consumers want to see.
The combination of these efforts puts La Liga in a fantastic position. New sponsorship opportunities? Maybe. Optimum reach? Most likely. Better market penetration than ever before? Definitely.
La Liga is now in a position where every type of viewer in the UK can watch the games, allowing consumers to choose, which is the key benefit of combining TV distribution with lower-cost, more flexible digital options. This includes the added benefit of free-to-air TV in the UK which has lost most of the rights for football in recent years.
There are lessons here for all types of media. Segmenting your video audiences into digital vs. TV is too broad and dangerous if you begin to discount TV. Marketers are still working out where their advertising budgets should flock – the answer may be that opposites attract and planning budgets should too.