Streamers set sights on sports

At a time when content production budgets are seemingly ballooning out of control (I’m looking at you Amazon, with your US$465 Million Lord of the Rings budget), the major US streaming operators appear to be looking towards a different avenue to drive growth.

This week, we saw Apple made its long-anticipated entry into the realm of sports rights, picking up a package of MLB rights. The international rights deal will cover the league’s native US and Canada, along with Australia, Brazil, Japan, Mexico, Puerto Rico, South Korea and the UK. The iPhone maker is also reportedly considering making a play for a package of NFL rights for Apple TV+.

Apple is not alone in looking to boost its SVOD service with sports. WarnerMedia, Paramount and others are increasingly turning towards sports rights for their services which have historically been driven by entertainment content.

Looking for a difference-maker

Though it has faltered in recent times, everyone is still playing catch-up to Netflix. The streamer, which this week made its first indication that it could look towards an ad-supported model in the future, is currently just shy of 225 million subscribers.

For context, the ever-expanding HBO Max is at 73.8 million globally, while Disney+ has a global total of 129.8 million subscribers. Perhaps in anticipation that its big-budget productions will inevitably cause price increases, Disney last week set out plans to launch an ad-supported tier of its SVOD for later in the year.

For a further example of Netflix’s size: its latest subscriber numbers would see it sit as the fifth most-populous country on earth, were Netflix its own state. (Pakistan has a population of 220 million as of 2022, with Indonesia above it with 274 million – a figure which Netflix would likely hit assuming that the majority of Netflix accounts are used by more than one person.)

This is all to say that yes, Netflix is still the big boy.

Other players in the space may have more humble ambitions for growth, but it is becoming increasingly difficult to stand out amongst the rest of the countless streamers out there. 

This is why, with prestige TV shows now being the expectation for any SVOD worth its salt, other avenues are being explored for growth – something we are even seeing from Netflix with its continued investment in videogames – and sports rights are a compelling means of achieving this. 

Speaking this week, HBO Max’s VP of emerging media and innovation Peter Scott confirmed that the streamer’s eight-year deal to broadcast US national team soccer is no one-off. Specifically talking about the NBA – which is currently broadcast on Warner-owned Turner – Scott said that “there’s no question” that “it might be a destination down the road to put NBA games on HBO Max.”

Scott said that the company has ambitions to expand its sports portfolio for HBO Max, adding “There may be a scenario where we go back to our partners with the cable operators and say ‘Hey, do you mind if we put this on HBO Max?’”

Meanwhile Amazon, which is a much more established force in sports rights, is said to be considering a play for the lucrative domestic Indian Premier League rights in a move which would, overnight, make it many peoples default streaming service in the country. 

Elsewhere, Discovery invested heavily in its digital-first broadcast strategy for both the 2020 Olympic Games in Tokyo and last month’s Winter Olympics from Beijing. The latter was rewarded with record audiences for the winter games, as consumption jumped up 19 times to one billion streaming minutes.

Reciprocal benefits

In announcing its deal with Apple, MLB chief revenue officer Noah Garden described the company as “the ideal partner” for its Friday Night Baseball programme, and it’s not difficult to see why. 

While Apple doesn’t reveal its subscriber numbers for TV+, any analyst will tell you that it is nowhere near the subscriber numbers boasted by the likes of Disney+ and Netflix. But while that may be true, the company still has a huge reach via its mobile, desktop, laptop and STB devices. 

Garden spoke of the “national availability and international reach” of Apple TV+, and the unusual nature of the deal – one which covers nine territories across five continents and scope to scale up – could represent a potential future for sports rights deals. 

For the league’s operators, the deal will serve to help in the prevention of Los Angeles FC lead owner Larry Berg’s prediction that MLS will overtake the MLB as the US’s third biggest sport within a decade. 

As DAZN can attest, the cheaper infrastructure costs that come with operating a streaming service on devices that consumers already own – as opposed to a pay TV channel that requires a lumbering subscription and separate set-top box – creates greater accessibility and can translate to more affordable sports viewing for consumers.

Speaking to DTVE back in the halcyon days of March 2020, DAZN EVP Joe Markowski spoke of the company’s “promise to consumers to make sport more accessible, more affordable and more democratised.”

These will invariably be thoughts also on the minds of sports leagues, whose media wings now have an opportunity to stick with the tried and trusted pay TV operators to which they have historically sold their rights. 

The other prospect, potentially one favoured by a younger audience, would be a relative leap into the unknown but one which arguably is more futureproof. 

It is not exactly a binary choice – Apple only has a relatively small package of rights to a league that will still be predominantly shown on traditional TV, while Warner will split its soccer coverage across HBO Max and Turner. And while DAZN primarily has focused its efforts on streaming, it does have deals in place with the likes of Sky in Italy and Germany to operate linear channels for its major rights like the Bundesliga.

What’s for certain though is that sports rights are incredibly popular, and they could be the difference maker for a streaming service that wants to establish and cement itself as a major player.