After decades of stability and seeming endless growth, the sports broadcast industry is about to undergo disruption and realignment, similar to what happened with music, news, and filmed entertainment before it. New players will have an opportunity to enter the space, while incumbents will need to adjust and adapt to new technologies and shifting viewer behaviors. The news that came out recently about ESPN laying-off 100 of its on-air talent highlighted that shift, but it’s only getting started.
So what’s really happening in the industry, and how can startups and incumbents turn those challenges into opportunities?
The basic story about ESPN’s recent challenges has been well documented: ESPN is locked in to expensive long-term broadcast rights deals with the leagues, while more subscribers are cutting the cable-cord. Each time a household cuts it’s cable subscription or chooses one of the new sports-free packages, ESPN’s annual revenue declines by approximately $84. In the last few years ESPN’s annual revenue from cable subscriptions has declined by $1Bn, after 12 million households cut their cable packages.
But that’s not the only thing happening. Sports broadcast networks used to be the primary source for fans to consume sports highlights, news (scores, injuries, trades, etc), opinion and analysis.
Highlights can now easily be watched on Facebook, Twitter, YouTube, and a large number of online publishers, in many cases in direct revenue-share deals between the leagues and the social platforms or online publishers (not to mention unauthorized posting by individuals).
Basic news and scores have become a commodity. You don’t need a 24-hour cable channel to catch up on last night’s scores, and there are thousands of apps and websites that can deliver this basic information.
Which leaves opinion and analysis as a differentiated product for broadcasters. However, that product is expensive and is under increasing competition. Not only have multiple new national and regional sports networks launched over the last few years and decades, but also there is a breadth of content online. And to make things worse, producing this video content is costly. The major networks require expensive talent and large production teams, and maintain high-cost studios and equipment.
So how do you fix this problem of expensive opinion and news content in an increasingly fragmented space, and declining cable revenue? The answer is through technology and crowd-sourcing.
Various startups are now tackling this problem by building technologies that make it easier to record, edit, filter, and distribute video in more automated ways; allow fans, influencers, athletes, and industry professionals to more easily engage and share their opinions; automatically curate and package the best content for distribution over multiple channels such as OTT, TV, Social, and more, and for syndication with multiple publishing partners.
Technology and crowd-sourcing can help create more high-quality sports opinion and analysis content at much lower costs than ever before, and reduce the friction in creating and distributing large amounts of video content.
In a similar fashion to how Uber pairs drivers with passengers, and Airbnb pairs guests with home owners, new technologies can pair talent with audiences, by providing the tools to create and distribute video. As the sports media industry continues evolving, automated tools for content creation that empower professionals and engage fans will play a key role in how sports content is produced and consumed.