Media Rights, Bidding & Hosting, Politics & Governance, Multiple sports, North America, Global

At Large | What are people paying for when they pay to watch sport on TV?

With the film industry approaching a crossroads of how best to distribute its new releases, the triumphant model could be very telling for what happens next in sport.

by Eoin Connolly
At Large | What are people paying for when they pay to watch sport on TV?

Seen anything good at the pictures lately? Probably not. Nothing new, anyway.

Cinemas are open now in lots of places – here in the UK, for example – but the uncertainty of whether and which venues would be available has heavily slowed the supply of movies. For American studios, especially, it has been hard to make a case for full theatrical runs when distribution is unpredictable and packed houses impossible.  

Staggered rollouts by territory or city are an option for some but have fallen out of fashion for the biggest releases. The risk of piracy is too high, and they take the air out of global marketing campaigns. Most of 2020’s blockbusters were punted either into midwinter or 2021 but someone has to be the first back through the lobby. So the film business has tracked the progress of two quite different upcoming titles very carefully.  

One of these is Mulan, another live action remake of a 1990s animated Disney favourite. The other is Tenet, the latest from mega-budget auteur Christopher Nolan, which follows BlacKkKlansman star John David Washington as he, well, nothing is all that clear from the trailers. But Nolan is emphatic this is a cinematic event first and foremost and, at his insistence, it will debut on the big screen whatever the cost.

Tenet’s release has drifted through the summer but it will now launch in 70 countries on 26th August, which will serve as an unofficial restart date for the mainstream cinema industry. That status is reinforced by Disney’s decision to shunt Mulan over to premium video-on-demand, offering it to Disney+ subscribers in the US for an extra US$30 fee. It will also run in theatres where public health conditions allow.  

There are plenty of prior examples of mixed releases like this, with Netflix and Apple set to normalise them further, but none have been anywhere near the scale of Mulan. Disney is making a big bet here – previous live action remakes Aladdin and The Lion King both cleared over US$1 billion worldwide at the box office. 

Warner Bros has plenty of stake as well, despite or even because of Nolan’s critical and commercial track record. Tenet’s budget is pegged somewhere between US$200 million and US$250 million, and the studio would have hoped to see a decent multiple of that in return. Somewhere between those two decisions lies the future of a decades-old distribution model.  

What it comes down to – here at last is the part of the exercise where it starts getting relevant to sport – is what people are actually getting out of a trip to the cinema. Fundamentally, we can pare that down to three factors.  

There’s the access to the content you want – the film, obviously. Then there’s the spectacle, and the idea that some things are worth paying more to see on a big screen surrounded by big speakers in the dark. Finally, the ritual: the experience of going, who you go with and when and why; popcorn and coming attractions and all of the rest of it.   

Social and technological change have affected the balance between those three over the decades. Basically, though, the best box office performers of the moment hit somewhere in a sweet spot: you have to see it early, while others are talking about it; you want to see it in the best setting, and you relish the opportunity.  

The value of each will not be the same for all parts of the audience, who in turn have a different financial weight to those selling the film. Disney will be banking on US$30 and an SVOD commitment representing a better deal for activity-starved families than a full set of tickets; Warner Bros will believe its older targets are dead keen for a night out. 

Either way, it seems pretty likely that the pandemic interruption will accelerate a more mixed approach to distribution, depending on audience taste. The movies would hardly be the first form of mass entertainment upended in this way. 20 years ago, CDs were the best overall option for people who wanted to own their own music. Today, digital downloads and subscriptions offer similar quality at a lower price, and the ritual of buying and playing vinyl records was always more appealing to hardcore fans.  

As an aside, in many respects, the central role played by followership and live performance gives the music business a stronger basis for comparison with sport. That, however, is a matter for another column, and we’re 700-odd words deep into this one.  

In any case, relative to almost any other form of entertainment, the economics of sport are rooted in the value of the live event. Most fans are paying overwhelmingly for access, and the experiential bits are secondary. And that, unless the behaviour of sports fans changes more or less entirely, will continue to be the case for a good while yet.  

Still, the balance between those three factors will be changing fast. These are commercial choices, not immutable laws of being. The very idea of paying to watch sport anywhere other than in the venue is only about 40 years old; adherence to it might continue to weaken under the weight of free video available everywhere, all the time. 

Meanwhile, some groups of fans will place greater stock in a better picture, richer insights or a wider range of viewing options, and be happy to pay more accordingly. Others will be keener on joining friends in shared digital forums – think Twitch or Fortnite – or will just have been hanging out there in the first place.  

In a sense, this is nothing new. The challenge is not the medium but the model. For decades, film studios knew they could frontload their marketing efforts for a cinema, then would then get another bite in physical media sales, and another for at-home distribution. Sports broadcasters and rights holders knew pay-TV subscriptions, and the rights deals they made possible, were the bedrock of everything else. 

The next decade will be about flexibility, multiplicity of choice, and a deeper understanding of audiences than ever before. Where companies invest, where their returns will lie, and how that affects the bigger picture – the difficult questions, in other words – will have to wait for the sequels.