By: Stefan Birrer, PhD, co-founder and CEO, Phenix
The exodus of viewers from television sets to mobile devices has opened the door for new players to get involved in the sports broadcasting industry. Cord cutting is impacting how companies broadcast sports to national audiences and is creating opportunities for new organizations to take part in the action.
This is particularly visible with the National Football League, the sports league with the most fans and the highest revenue in the United States, and its expansion into live streaming across different platforms. Amazon, ESPN and Verizon are examples of companies trying to get ahead of their competition in the space. Amazon paid the NFL $50 million to stream 10 Thursday Night Football games in 2017 and ESPN and NBC Sports expanded their Monday Night and Sunday Night Football streaming rights for mobile; Verizon announced the biggest deal, a $2.5 billion non-exclusive agreement with the NFL to expand their current streaming offerings. Kicking off in 2018, the new partnership allows Verizon to stream playoff games, including the Super Bowl, and in-market games to fans on Verizon websites, like Yahoo, AOL and Go90.
While there have been a number of companies pioneering sports live streaming products, none have been able to deliver a frustration-free product that cord cutting sports viewers can rally behind. Entire games can be ruined by missing an exciting play or seeing a social media post of an updated score that beats the delayed “live” stream feed. With the largest NFL broadcasting rights with Fox, CBS and NBC expiring in 2022, the pioneers of sports streaming can further capitalize on the growing number of cord cutters, and consequently, on huge advertising dollars. They first, however, need to deliver a quality product that fans will want to tune into.
Solving the Latency Problem
In talking about all these streaming rights deals, it’s vital to understand how sports fans really feel about live-streamed games. A recent studyfound that nearly three quarters of viewers expect bad service when they live stream a sports game. Latency – delays, poor picture quality and buffering – is the root of the issue. In fact, the study also found that 63 percent of viewers are reluctant to sign up or re-subscribe to sports live streaming platforms in 2018, indicating that streaming issues aren’t just a pesky inconvenience – they’re resulting in tangible business detriments. Thirty-four percent would even think about cancelling the services giving them issues.
Verizon has positioned its offerings for free viewing platforms – Yahoo, AOL and go90, so subscriber dollars are not a concern. It’s aiming to attract as many viewers as possible, allowing them to tune in for free, and therefore reap the advertising revenue of a large viewer-base, which comes straight from the television playbook. Even with the free offering though, the high advertising revenue won’t be possible for Verizon if its live stream has latency problems, as people will turn elsewhere to watch the game. Latency is plaguing the live sports streaming industry and even if subscriber revenue isn’t a concern, advertising dollars will be impacted.
Real-Time is the Solution
There’s still time for streaming providers to course correct – by investing in a solution that delivers real-time streams at scale. As it currently stands, if it’s live it’s too late, but real-time ensures sub-second latency, so that streams can keep up with the game. And real-time brings about greater potential for fan engagement. According to the research, fans are looking for multi-screen experiences, the ability to interact and talk with players and coaches, and feel like they’re a journalist with an insider view into press conferences. All of these experiences are possible with live streaming, but only if the sports stream is being delivered in real-time and becomes truly live. For the likes of Verizon and others in the streaming space, this means they would have more people tuning in, and more engaged, loyal viewers.
Couple Verizon’s free-to-stream strategy with fixing the issues plaguing the streaming and Verizon can become the standout sports streamer of the year. Of course, there’s room on the field for others too, especially when the NFL streaming rights expire in 2022. The key is to get to the heart of the streaming issue now so that eventually, there’s no difference between “live” and “real-time.”