Investment, Media Rights, Global

Notes from the MD: Sport’s D2C strategy needs some work

SportsPro managing director Nick Meacham offers his thoughts on where rights holders are going wrong in the OTT space.

by Nick Meacham
Notes from the MD: Sport’s D2C strategy needs some work

After spending plenty of time talking to sports properties and platform owners at the SportsPro OTT Summit last month in Madrid, and running a direct to consumer (D2C) forum with rights holders pre-event, I thought it would be worth sharing some thoughts (five to be precise) around what some platforms are doing in the space.

1) Sports needs to overcome its obsession with subscription as the key business model

Thanks to the ‘Netflix effect’, everyone is chasing the holy grail of a successful subscription model. It is not for everyone and in fact it is not for most. You have to have something that is so scaleable or unique people must have it. Despite what many rights holders hope, they do not all have what it takes. That does not mean they should give up – quite the opposite – they just need to think of the bigger picture.

2) Strategies need to shift focus on to share of wallet and the other revenue streams derived from having an OTT platform

Every platform, sports body and broadcaster has to look harder at this. The technology is there and it is getting better too. You can and need to generate revenues outside of just the live content. Integrate and generate ecommerce opportunities, apparel sales, ticketing sales, funnelling to partner sites, etc.

3) Niche sports need to be more bullish about their pricing strategy

Many tier two or three rights holders have a passionate audience, albeit a small one. This passionate audience (almost) never has the chance to consume their sport's live or premium content as it is never picked up by mainstream broadcasters. That relationship with fans is completely different to the tier one sports – embrace it. Accept your niche and accept your audience will never be at scale. Why? Because you can charge a premium for your service.

Subscription can work but tier two and three rights holders need to charge more for their platforms, not less. Some rights holders are charging less than US$2.50 per month for a host of key live, highlight and lifestyle content that is exclusive. Stop it. That content is harder to come by and premium to those niche audience so charge accordingly.

4) Piracy has never been a bigger issue, but only the tier one sports care

Some piracy platforms are now so advanced that they have a better user experience than many legit streaming platforms. It is frightening. It has never been easier to create and distribute pirated content – often without risk or consequence. But when talking to rights holders it is pretty clear that the topic of piracy does not concern tier two or three sports. It is just not on their radar.

The reasons are fairly obvious, their media rights are not being sought after at a premium, it is just too expensive to fight, and in some instances it feels like smaller rights owners would almost wear it as a badge of honour to be pirated. Tier one sports properties, on the other hand, are really concerned, still sorting answers and still struggling to find a definitive solution. Will it really begin to affect the valuation of media rights? It is probably already happening on some scale and the answers do not appear to be around the corner.

5) Fundamental delivery challenges still face many platforms

It does not matter how big you are, how big your tech team is and how much money you have, everyone has issues with delivery, especially at launch. The difference now is that platforms have the ability to fix issues rapidly and have made huge steps forward in terms of stability over the past 12 months. But first impressions count and getting it right from the start is key if you want to attract users and keep them long term. Do not mess it up.