Fewer than half of the world’s sports industry leaders are implementing ‘concrete innovation strategies’ despite the vast majority recognising the importance of technological transformation, according to a new research from PricewaterhouseCoopers (PwC).
PwC’s Sports Survey 2019 claims that sports properties must find the right combination of infrastructure, processes and people to remain relevant in an ‘increasingly competitive and disrupted industry’, and cites director-to-consumer (DTC) distribution as one of the sectors of contention among executives.
PwC’s data shows that 94 per cent of all sport leaders surveyed worldwide recognise the importance of transformation and innovation, however, only 47 per cent are laying the groundwork for change.
David Dellea, the head of PwC’s sports business advisory, said: “A great number of rights owners, and in particular sports federations, are in need of transforming the way they do business.
“While different players will be at different stages of progress on this long journey, we hope that the insights in this report are indicative of how to refocus the efforts to effect the changes needed for their organisations to flourish.”
In addition, research also indicates that the majority of those surveyed were yet to see positive return on investment from over-the-top (OTT) solutions, with 45 per cent of respondents viewing results from OTT as being ‘below expectations’.
Overall, only 4.2 per cent said that they think results so far have exceeded expectations, and just under a third view them as in line with expectations. Three quarters cite challenges creating sufficient content to generate long-term interest and sustain a high-quality service.
Stefan Kürten, executive director of Eurovision Sport, said: “Sports federations should carefully reflect if future OTT income will balance out with reduced revenues from traditional media due to reduced exclusivity, as well as the costs to develop, maintain and run an OTT solution with the same quality standard.”
Compared to PwC’s 2018 Sports Outlook, published 12 months ago, many of the industry’s top executives believe that while the OTT sector will continue to grow at a healthy rate over the next three to five years, they now believe it will be slower than originally anticipated (at 6.4 per cent, down from 7.4 per cent).
However, the rate of expected growth fluctuates between regions - for example, growth of the sport sector in Europe (5.8 per cent), North America (5.6 per cent), and Australasia (3.9 per cent) is expected to slow going forward.
Meanwhile, industry growth is expected to stabilise in Asia (8.7 per cent) and the Middle East (8.9 per cent) having proven to be the fastest-growing markets over the past decade. PwC's survey also found Africa (9.1 per cent) and South America (10.3 per cent) to be emerging markets.