Part 1: Is sports streaming the big growth driver for streaming platforms now?

There is a clear reason why JioCinema app is live-streaming FIFA World Cup in India for free. By free streaming, the app is seeking to build the massive user base for the IPL next year. The Reliance-backed Viacom18, which owns the app, bagged the streaming rights for the IPL for the 2023-2027 period for a whopping Rs 23,758 crore. (In comparison, the company acquired the TV and digital rights for the World Cup for a pittance, for almost Rs 450 crore.) The free live streaming of the FIFA World Cup is in a way a bait to reach out to 700 million smartphone users in India. It is just preparing the ground for the big cricket tournament.

“We want consumers to have easy access to world-class production across digital and linear platforms to match the event’s stature. Our efforts are towards reshaping fan experience and building one of the most-loved media platforms in India,” Viacom18 Sports CEO Anil Jayaraj said while making the announcement last month. Will Viacom have its Disney+ Hotstar moment?   

Will we see streaming majors pivoting on sports streaming as a key growth driver? How will it change the dynamics of sports broadcasting? How successfully can a streaming business be built? Adgully is delving deep to find answers to these questions in this two-part series.

The growing segment

Digital sports revenue will grow at the rate of 22% over the next four years to touch Rs 4,360 crore in FY26, according to a report released last week by Confederation of Indian Industry (CII), KPMG and the Indian Broadcasting and Digital Foundation. While the TV sports segment will still be larger in size at Rs 9,830 crore in terms of revenue by FY26 (from Rs 7,050 now), its pace of growth will slow to levels of about 7 per cent per annum over the next four years, the report says.

The television and digital OTT sports market is estimated at close to Rs 10,000 crore in FY22, Akhilesh Tuteja, Partner and Head, Technology Media and Telecom, KPMG in India, had said on the sidelines of the release of the KPMG in India, CII & IBDF report on the sports broadcasting segment.

According to the report, the carefully packaged entertainment rendered by domestic sports leagues and India’s performance in international platforms like the Commonwealth Games furthers the viewer's interest in and engagement with sports.

“Corporates are also increasing their involvement in sports beyond advertising and are participating as franchise owners and/or engaging in grassroot development programs – thus playing an active role in the development of India as a sporting nation. These efforts set in motion a virtuous cycle, as an increasing interest in sports fuels further consumption, which is beneficial for the entire value chain including the sports broadcasters,” says the report.

While TV remains a major player, sports as a genre is fast catching the attention of streaming services. Increasing competition in the streaming space means that platforms must offer distinctive content offerings for audience retention and stickiness. And there is nothing like live sports to increase streaming audience. And the price of live sports rights is only projected to increase. In 2024, according to Moffett Nathanson, leading players like Disney, Paramount, Fox, and Comcast are projected to cough up a combined $24.2 billion for sports rights.  

Streaming majors are already leveraging the sports genre. Recently, Amazon Prime announced a multi-year agreement with Overtime Elite (OTE), the Atlanta-based professional basketball league, for global streaming rights to 20 live games per season for the next three seasons.

“Like Overtime, we hold a mutual commitment to serving the next generation of sports fans, and we are proud to join Overtime on their journey as the league continues to see tremendous growth,” said Marie Donoghue, VP of Global Sports Video, Amazon.

It was in 2017 that Amazon burst into the sports rights scene with its $50-million deal with the NFL to stream Thursday Night Football, beating the likes of Facebook, Twitter, and Yahoo. It kinda heralded the entry of Big Tech into the world of sports. It was a first for the streaming giant, after the NBA declined its offer to be the exclusive home of NBA League Pass. Amazon has sent a clear signal that it is ready to take on legacy players, giving a run for their money.

This year, Apple debuted into live soccer broadcasting with its 10-year-old global partnership with Major League Soccer (MLS). And rumours are rife that Google might try for some of the premium sports rights. Yes, the Big Tech is after the lucrative sports.

“It’s hard when you’re competing with entities that aren’t playing by the same financial rules,” commented Bob Iger, the ex-chairman of the Walt Disney Company, which owns, among others, ESPN in its kitty.

Netflix has hitherto abstained from venturing into live sports or news with its avowed step-motherly attitude towards the genres. In fact, its chief Reed Hastings was emphatic that Netflix was not interested in either sports or news. However, the streaming major is rethinking now, because of the reasons we already know, such as increasing competition, tumbling stock prices, and subscriber churn. The Wall Street Journal recently reported that Netflix is mulling over the option of acquiring live sports rights.

Greg Armshaw

Netflix is already ruling the current streaming landscape with its high investments in India to produce more original content, says Greg Armshaw, Senior Director Strategy, Brightcove. “Should they see sports as a suitable complement to the content they currently offer, then there is no better organisation to break into this space, although even they will have to learn new competencies, as the workflows around delivering live streams are quite different to video on demand.” 

Video streaming has now become a differentiator that’s helped sports brands attract new fan demographics and expand their reach beyond the physical boundaries of the pitch, court, or racetrack, says Greg Armshaw. He reminds us of the fact that unlike earlier, digital rights are now being sold separately, opening doors for streaming leaders to broadcast exclusive content. Players like Hotstar and SonyLIV are some of the most popular OTT platforms that have gained a stronger footing in broadcasting sports in the domestic market.

Baskar Subramanian

Sports is one of the key genres that is capturing attention on streaming platforms, says Amagi Co-founder-CEO Baskar Subramanian. ”Since streaming technology has now advanced and reduced latency issues, we see more and more people enjoying sports on connected devices. Given this transition, it is imperative for companies to have sports content on their streaming platforms to attract and retain viewers. Netflix is widening their portfolio to increase viewership and attract more viewers to their platforms. With Netflix’s entry, the competition for premium sports titles will certainly heat up,” Subramanian adds.

Manik Bambha

It’s the value proposition, Manik Bambha, Co-Founder & President at ViewLift, says, adding, “This has been going on for a while. Disney owns ESPN. Amazon has been streaming prime-time sports like Thursday night football and Hotstar has been streaming Cricket. They are targeting different people in the family to make sure the package's current and new ones make sense. Generally speaking, it's sports for men, entertainment for women, and cartoons for kids, but again there is enough crossover across the genres,” Bambha says.

 (Part 2 Tomorrow: How to build a sport streaming business at scale, growth drivers, and more.)