Build it and they will come: Cerberus pinpoints the challenges and opportunities of sports broadcasting fragmentation

By Chris Clarke, chief executive, Cerberus Tech

There have never been more opportunities for sports organisations to share their content with fans. But the growing complexity in the broadcast media space, combined with the diverse nature of the sports sector, present some key challenges.

It is clear that the continuing demand for sports content will drive significant growth during 2022 and beyond.

The Spectator Sports Global Market Opportunities and Strategies to 2030 Marketing Insights Report found that the global spectator sports market, “is expected to grow at a CAGR of 16.3% to nearly $200,878.0 million by 2025”. That said, the report also noted that “the global spectator sports market is highly fragmented with a large number of small players in the market”.

Sports viewing habits are impacted by a huge range of influences, including regional preferences, sport types and formats, and the ways that different demographics expect to consume content. This can often lead to a less is less scenario where, as a result of the complex landscape, broadcasters focus on a handful of mainstream sports.

A common thread

Broadcasters are certainly missing opportunities to diversify viewing options. A significant number of sports get left off the air completely. Or if they do make it to broadcast, then it’s either for special events such as the Olympics or a pivotal final match. Despite the myriad of sports formats available, this challenge of securing commitment from broadcasters impacts all but the fortunate few.

It is understandable that in order to air sporting events, broadcasters need to be confident of generating commercial revenue from that content and all sports organisations need to grow an audience for their live games.

Historically, there has been a chicken and egg situation, where the only way to impact audience growth was to have more people watch a live broadcast. But to secure that broadcast slot, sports organisations needed a large fan base to begin with.

Now, mirroring other forms of entertainment, the way that fans consume content is changing and this is opening the door to fresh opportunities. In a digital environment most clubs and sports organisations can leverage new routes to reach consumers.

Currently the most common method for achieving this is to drive fans towards a branded YouTube channel. YouTube is one of the few avenues for niche sports, where supplementary content can be rapidly monetised, offering immediate advertising returns. But a more holistic approach to digital engagement provides sports organisations with much more than that.

Maximising fans cross-platform

As in many other areas of entertainment, spectator sports are transitioning from a large consumer base comprised of a few key audience demographics, to a collection of much more fragmented bases.

Consumer expectations around digital content are also changing, and these differ between platforms. Individual YouTube creators are increasingly developing content with a higher production value, and this will impact the way that sports organisations approach creating content for that platform. In contrast, short-form video developed for TikTok and Instagram adopts a more realistic approach, which clubs and federations can use to make sports content more relatable and personal.

By using multiple platforms to build up a highly engaged following, niche sports can easily demonstrate consumer demand to broadcasters. But this is more than a digital portfolio of popularity. Consolidating a fan base and using that as an asset in itself, offers sports organisations more leverage within broadcast negotiations.

Market segmentation

Of course, commercial revenue all comes from the same place, and it is no secret that the sports broadcasting world turns on advertising money. Sports organisations themselves are invested in the process of advertising their own brand and trying to drive fans towards it. But when it comes to broadcasting content, sports organisations are not actually selling the sport itself, they are selling a connection to potential advertising revenue.

Historically, advertising around key sporting events worked with a simple equation, the more eyeballs a sport attracted the higher its value. In a digital space, as advertising becomes increasingly targeted, success is less about quantity and more about qualitative data. The overall consumer attention a niche sport can bring to the table is important, but if that is the only consideration for broadcasters then niche sports will likely lose out. What may prove more valuable, is what organisations know about their audience.

Niche sports are moving into a unique position, not only to build a loyal fan base but also to understand those fans better than anyone else. With advertising resources spread increasingly thin, a clearly defined audience demographic is extremely valuable. This shift in mindset has the potential to transition sports advertising priorities from generic mass appeal to highly focused market segmentation.

Broadcasters need to stop thinking about advertising in terms of the total number of consumers and start considering the power of offering direct access to a specific audience.

More content means more opportunities

For niche sports there is certainly the potential for broadcast rights to be sold to affiliates in different regions for a final match or key event. But what about the matches leading up to the event, as well as supplementary behind the scenes footage? That is revenue generating content which can find a home in a digital space without breaching the terms of the broadcast agreement. Beyond that it can become a catalyst for growth and fan engagement.

The platforms and technology to achieve this are already in place. With the widespread adoption of cloud-based content delivery, sports organisations now have the option to deliver more feeds at a lower cost. IP delivery has significantly reduced the downstream cost profile, which was so prohibitive for niche sports back when satellite and fibre delivery were the only choices available. Sports organisations can now focus on the next generation tools which will help them build their fan base.

Instead of relying on broadcasters to bring in an audience, niche sports can take their audience to the broadcaster. The message is clear – build it and they will come.