Analysis: Sports rights-holders value D2C services
December 3, 2020
Media technology and services specialist MediaKind has unveiled the MediaKind 2021 Sports D2C Forecast, which it claims is the most significant analysis ever undertaken of the direct-to-consumer (D2C) OTT platforms owned and operated directly by sports rights-holders. The report explores a wide range of trends in the D2C sports space, including the use of live content, fan engagement, and monetisation.
While most of the 40 rights-holders analysed still define their D2C platform as complementary to broadcast coverage, most now see it as an essential part of their future distribution strategy for live sport and building direct touchpoints with fans. Almost three-quarters of the rights-holders analysed offer some form of D2C service to their fans today through subscription packages, utilising one or more of six entry points.
The findings reveal a 50-50 split between rights-holders. Half use their D2C service purely as a supplementary content hub, focusing on delivering high-quality video. The other half concentrates on making full use of OTT’s interactive possibilities, embedding fan engagement features into their services. In terms of distribution, 58 per cent of the rights holders analysed have a standalone D2C web domain, with the remaining 42 per cent providing D2C services via a sub-domain of their main website. Just over a third of the total rights-holders offer their D2C service through a standalone mobile app.
MediaKind also highlights how current standalone D2C sports services are under-utilising secondary monetisation tools. None of the rights holders analysed offer an integrated betting service. At the same time, features such as ticketing (utilised by 3 per cent of rights-holders), merchandising (5 per cent), and advertising (8 per cent) remain rare, with greater priority placed on delivering a high-quality viewing experience and user interface. However, many rights-holders expressed concerns about how their future streaming service will stand up when faced with a high volume of concurrent live streams despite recent technological advances.
“The results of our study are clear – rights-holders cannot afford to be without a D2C service moving forward,” asserts Raul Aldrey, Chief Product Officer, MediaKind. “All 40 of the rights-holders have recognised how D2C services offer crucial, data-driven touchpoints with their fans and provide unique opportunities to enhance fan engagement and tap into new monetisation streams. But the performance of these D2C platforms remains table-stakes and fundamental to attracting and retaining audiences long-term. Future D2C services must guarantee stability at scale, and the overall delivery must be at least as good as the broadcast-quality linear services that sports fans have been accustomed to and enjoyed for decades.”
Other key conclusions:
- Subscription models dominate: The majority of rights-holders who operate a D2C OTT service make it available as a subscription service. The subscription model is likely to be the dominant long-term business model.
- The UX bar is rising from entertainment to engagement: There is an even split between rights-holders who use their D2C platform as a content hub only and those who are exploring a whole range of fan engagement tools to exploit OTT’s full capabilities.
- Focus is on maximising recurring revenues: The rights-holders analysed provide six different types of entry points for fans. There is a clear need to generate guaranteed revenues in a subscription culture where immediate cancellation is made easy – for example, heavily discounted annual passes to tie fans to the service long-term.
- Opportunity for secondary monetisation is mostly untapped: However, rights-holders must resolve the dilemma of whether to integrate secondary monetisation verticals – such as betting, ticketing, and merchandising – on their D2C service to reach engaged fans behind a paywall or to put these features on their main website to reach wider audiences.
“Streaming is a major part of sports media, with Internet-based delivery now very much the present, as well as the future of media content distribution,” adds Aldrey. “The growing ubiquity of D2C platforms means they now form an essential part of any strategy for live sport – regardless of whether they are a complementary service to broadcast coverage or the primary means of distribution. While current D2C services are largely representative of an emerging market, this sector is ripe for experimentation, exploration, trial and error, innovation, creativity, and risk-taking – with big rewards for those that get it right.”