Altman Solon is the largest global TMT consulting firm with expertise in media consulting. This insight explores how media companies can adapt to a fragmented sports viewing landscape by rethinking monetization strategies and engaging both avid and casual fans.
Premium sports rights remain must-have assets: they deliver high-value programming and attract big audiences on a repeatable and predictable basis. Deals like the recent record-breaking $8.5 billion broadcast rights agreement for the English Premier League with broadcaster Sky and TNT Sports are evidence of the value of live sports. However, the rise of streaming has impacted legacy media companies’ economics, and even premium sports require new strategies to boost viewership and increase monetization opportunities.
Sports fans are an important audience segment: they dedicate more than one-third of their TV and video budgets to sports content. Broadcast networks and cable providers have courted sports fans for years, and streamers are also keenly interested in growing and diversifying their subscribers by appealing to sports fans. But attracting and retaining sports fans has become more complicated. With media fragmentation on the rise, sports fans are now more likely to become free agents: nearly 70% of fans are willing to switch television providers to retain access to one or more of their essential sports.
Broadcasters and media companies should optimize their rights portfolios and diversify their strategies for engaging fans across viewership levels. While more avid fans who watch sports multiple times a week are often laser-focused on their favorite teams, they represent less than 15% of the global fanbase. Casual sports fans who watch games less than weekly are a potential growth opportunity for media companies and rights owners.
Over 70% of the media executives surveyed believe casual fans should be catered to through expanded content offerings, like pay-per-view options, augmented live experiences, personalized content recommendations, and ad-supported models. With rights costs per subscriber on the rise, the question remains as to how media companies can sustain their current levels of live sports programming in today's streaming ecosystem. While legacy media has led the pack in broadcasting sports content, tech aggregators and OTT streaming services are uniquely positioned to exploit live rights over the coming 5-10 years. This is thanks in part to streamers’ ability to capture fan data and experiment with new in-stream features (e.g., stats, overlays, adverts) and offers adapted to fan profiles.
Media companies can no longer rely solely on traditional monetization strategies for sports rights. Instead, broadcasters must rethink their monetization models, optimize their rights portfolios with a disciplined approach to content acquisition, and reduce discoverability costs with streamlined distribution models. By centering the needs of avid sports fans while experimenting with ways to engage more casual fans, media companies can continue to monetize sports rights.