Hubble bubble: Synamedia says trouble brewing in 2023 means positivity for sports streaming in 2024
By Simon Brydon, Synamedia head of sport – video network.
Not to be overly dramatic but 2023 has seen the sports streaming industry bubbling with toil and trouble. Flat-lining rights fees outside the US, a lack of broadcast competition in multiple markets, and slow subscriber acquisition are key ingredients swirling around the sports streaming cauldron.
And although Shakespeare would no doubt have found a way to make TV rights pay handsomely had television existed during his lifetime, he would certainly recognise how the growing unease about the state of the industry and the underlying economics of sports streaming spells double trouble.
All that glitters is not gold
The broadcast rights market for many sports – particularly top tier football – is struggling. While the NFL is celebrating its recent $110 billion deal and the NBA is predicting substantial increases for its US rights fees, they are bucking the trend where fees in general seem to be flat or reducing.
Serie A’s new five year deal in Italy was down 2% to 3% on the previous agreement and Sky Italia didn’t bid aggressively, settling instead for a limited number of non-exclusive games. And though the NBA is still buoyant in the US, it even took a down round in Germany. The big question is what appetite Amazon, Apple and Netflix will have for entering or staying in the ring for Tier 1 sports.
Vanity versus sanity
Having been on a massive land grab for customers, sports streaming services are now keen to cut costs and reevaluate their business models to work out the economics of streaming.
Chasing turnover for vanity has become chasing profit for sanity. This old adage might not be one of Shakespeare’s classic lines but it still holds true, underlining the need for effective approaches to streaming which help lower total cost of ownership.
For example, at the recent Sportel Monaco, easing and speeding deployment with flexible business models were top of mind alongside improving the fan experience and fan engagement to boost monetisation.
The latest tech developments point to a move by video platforms to a multi-tenant cloud SaaS platform approach, powered by best-of-breed streaming technology. This makes good commercial sense by enabling easily deployed, flexible solutions that can be adopted on a case-by-case basis.
Such stuff as dreams are made on
In 2024, we will see a big shift to cloud SaaS, not just with streaming, but more broadly with video platform technology, precisely because we need to build in more efficiency and flexibility to save money.
Given the peaks and troughs nature of sport, it’s a case of horses for courses and deploying solutions to maximise resources. For example, for sports with spotty demand or catch up TV or FAST channels running in the middle of the night, it makes sense to reduce processing costs by only transcoding video when a stream is requested by an end user.
For more sustained live demand where quality and reliability are, as the bard might say, the be-all and the end-all, we need highly scalable solutions offering pinpoint picture perfection with deliverable low latency.
Look into the seeds of time
Making monetisation work in 2024 will be as essential to survival as ever. For example, with sports betting we’ll need to get smarter in the face of tightening regulation on gambling advertising, particularly in UK.
AI-based dynamic ad-insertion will play a bigger role in the addressable advertising space, enabling the placement of personalised ads directly into programming. And with AI’s ability to process almost infinite amounts of data in infinitesimal amounts of time, reaching the next level of personalisation; the hyper-customisation of ads where the logo on Premier League players’ shirts can be customised according to a viewer’s preferences – is literally just a matter of time.
Neither a borrower nor a lender be
The piracy problem is not going to melt into thin air especially when faced with the growing number and cost of subscriptions required to keep up with available content.
Especially egregious for the industry is the theft of content direct from OTT sports services’ CDNs. The industry is looking to replace easily pirated and shared CDN tokens with new Common Access Token (CAT) CDN tokens. In the year ahead, the industry needs to come together to agree deployable solutions for CATs because it is simply not feasible for every OTT platform to impose bespoke new secure tokens on multiple CDNs.
It is not in the stars to hold our destiny but in ourselves
Despite the challenges the sports industry faces, video consumption is still on the rise. The potential rewards in 2024 are huge for the players who are smart about how they deliver to viewers.
Leveraging the scalability of the cloud means we can deliver the right content to the right people at the right time.
And given content is still king, service providers need to ensure they deliver a royal viewing experience in order to retain subscribers. Just as a consumer’s experience on YouTube or TikTok is based on their previous viewing – ie, one Shakespearean skit feeds another – the ‘YouTube-isation of television’ is the next level of dynamic customisation that will be used across the industry to keep the consumer engaged. And with his many millions of views on YouTube and TikTok today, you can be sure that Shakespeare would approve.