Analysis: Live sports less of a key subs driver
November 1, 2022
According to research from home media consumer intelligence specialist Aluma, if their favourite TV sport moved its live games exclusively to a subscription streaming service such as Netflix or Prime Video, only 8 per cent of US pay-TV subscribers would definitely cancel.
Among pay-TV subscribers that selected professional football as their favourite TV sport, 11 per cent would definitely cancel service if a full season of games moved exclusively to a streaming service. This compares with 8 per cent of those who favour watching professional baseball (MLB) and 7 per cent of those who favour watching professional basketball and 8 per cent.
While responses for the NBA and MLB were in line with what Aluma analysts anticipated, responses from those selecting the NFL as their favourite TV sport were well below expectations—especially considering that 80 per cent of live TV sports viewers also subscribe to at least one of the top-5 SVoD services.
“We presented this worst-case scenario to pay-TV decision makers to assess what would happen if streaming providers buy the rights for an entire season of their favourite TV sport,” said Michael Greeson, founder and director of research at Aluma. “The findings are contrary to the dominant narrative that, without live TV sports, pay TV couldn’t survive. Perhaps live sports are less critical to pay TV’s stickiness than we’ve long believed.”
This in no way suggests MVPDs should drop live professional sports from their programming roster. “That’s missing the point altogether,” says Greeson. “The data only indicate that the role of live sports in reducing churn may not be as strong as we’ve long believed. That said, there is a point at which the exorbitant fees MVPDs pay to license sports are no longer worth the cost.”
The same study found complacency plays a more significant role in preventing pay-TV churn than do live sports. One-third of subscribers not fully satisfied with their pay-TV service continue to subscribe because they’re “just accustomed to having it”, while only 18 per cent do so because “it’s my go to source for live TV sports”.