Companies have long used sport to reach consumers and ensure consumer loyalty. The way in which they do so is subject to change, driven by technological developments and consumer habits. Media companies must therefore review their business models. That is unavoidable if they wish to reach consumers who want to watch sport in the next few years too.
This is one of the important conclusions in the Entertainment & Media Outlook Special ‘Staying ahead of the game’, which was recently published by PwC. In this Special, PwC analyses the way in which Dutch consumers view sport and the significance thereof for channels, publishers, cable operators and advertisers.
Sport has long been important for media companies and advertisers, because it allows access to and ensures the loyalty of large groups of consumers. In recent years, technological developments – and in parallel the changing viewing habits of Dutch consumers – have brought about upheaval in the media landscape. Viewing sport broadcasts via online livestreams has become popular very quickly, particularly among young people. More surprisingly, the analysis shows that older people also expect that they will be viewing online in the next few years and will be using websites more often to follow sporting events.
Casper Scheffer of PwC expects this trend to continue in the years ahead. ‘As a result of this development, some media companies my lose their faithful sport-viewing public. For other companies, the developments provide opportunities. It is vital that companies take account of these trends and adjust their business models in such a way that they can continue to serve the needs of consumers.’
Sport as content
The analysis shows that large groups of consumers of all ages still like to watch sport, particularly live sport. That makes sport interesting as content. Media companies that have the broadcasting rights to live sporting events can be sure of huge numbers of faithful viewers, both male and female. For that reason, in particular, the competition for the exclusive rights to live sporting events is intensifying, according to the Special. In addition to TV channels, other media companies have a great deal of interest in live broadcasting rights. Newcomers such as YouTube, Twitter, Amazon and Netflix are also competitors for licences.
‘We are seeing an explosive growth in the amounts being paid for the long-term contracts for broadcasting rights to national leagues, international tournaments and mega events such as the Olympic games. That is pleasant if you are the owner of the broadcasting rights, but annoying if you don’t have them. Many companies are wondering what their approach should be. In 2018, a number of important licences will be up for renewal. Can they survive the rat race, do they even want to compete, and if so how? And should they do so alone or with partners? We expect interesting new partnerships to be formed, particularly with regard to the live sport phenomenon’, says Scheffer.‘
Those partnerships are unavoidable. Not only because of the high costs involved in acquiring those broadcasting rights, but also because of the changing viewing habits of consumers, which are causing the roll-out of broadcasts via the Internet and mobile applications.
‘TV remains the preferred way of watching live sport. In the case of older people, in particular, this is still the most important source of information. Young people still watch live sport on TV to some extent, but they are increasingly turning to digital and mobile media. If TV channels lose live broadcasting rights to digital and mobile platforms, they will lose huge groups of viewers. These developments are forcing companies to invest in new business models and in new partnerships’, according to Scheffer.
Would you like more information? Please contact Casper Scheffer.