ESPN+ May Have Best Programming, But Too Early to Pronounce as Sports Streaming Leader


Sports Illustrated published a story entitled, 'As the Digital Rights Battle Continues, Has a Sports Streaming Leader Emerged?' making the case that Bundesliga’s pending move (from beIN Sports) to ESPN+ (come 2020) is indicative of a streaming battle that’s tilting in favor of the Disney subsidiary; ESPN has also acquired the broadcast rights to both Serie A and the FA Cup over the last 12 months. It’s not inaccurate to say ESPN+ currently has the best programming lineup amongst sports-centric digital providers, but it’s far too early to “pronounce a leader”; OTT adoption rates remain minuscule relative to linear television and will remain that way as long as linear television has broadcast rights to every meaningful NFL, MLB, NBA or NHL game.

Howie Long-Short: ESPN’s aggressive pursuit of global soccer rights for ESPN+ is built on the premise that a “buffet of great leagues and tournaments [from] around the world” would make it a ‘must have’ for hardcore soccer fans. While most within that group would likely agree, the pool and thus the upside in potential subscription numbers is limited; and as Yannick Ramcke (media industry observer, author of the blog reminds “it’s difficult to grow a sport’s core audience if the best games are exclusive to digital channels with little exposure to the mainstream sports fan.

The worldwide leader has also chosen to pursue European soccer rights out of necessity. If the big four sports leagues aren’t going to award exclusive rights packages of meaningful scale/scope to digital-only companies “anytime soon”, then “acquiring long-tail content for retention and cyclical marquee events in boxing or MMA for new user acquisition is the best a service like ESPN+ can currently do.” Don’t think exclusivity is important? Ramcke said that the data shows if programming is available on linear television and OTT simultaneously that “digital makes up just 1% to 3% of the total viewership.” Today’s main stream sports fan, particularly those born before 1980, needs to be forced to adopt digital services; and that only happens if there is no linear alternative.

While European soccer does sell subscriptions, ESPN’s decision to outbid FOX Sports, beIN and the recently launched streaming services on international soccer rights has more to do with retaining digital subscribers than it does bringing in new ones. As Ramcke said, “the real challenge for pure-sports streaming services is keeping users in between marquee events. High-profile, cyclical events such as UFC PPVs drive sign-ups, but constant week-to-week programming is the key to retaining them.

As for FOX Sports - which doesn’t have an OTT service (Soccer Match Pass appears to be going the way of the dodo) and thus isn’t worried about churn - there is no urgency to retain rights to sports that draw a limited audience (FOX Sports pulls <100,000 fans for Bundesliga games). Instead, they’ll use their resources to acquire/retain tier one rights for the limited space they have available on the linear networks; a premium strategy that has become a go-to-move for many traditional sports broadcasters without a stand-alone digital outlet.

As S.I. writer Jacob Feldman noted, from a business standpoint, sports-centric OTT services remains an unproven commodity. Aggressively spending (due to fierce competition) for long-tail programming combined with aggressive pricing is not a viable long-term business model, so it’s worth wondering just how much runway these companies have. Ramcke says most are planning based on a one-to-three-year window, but believes none will have longer than four years to covert linear subscribers in mass. “Either they’ll land big four rights and consumers will be forced to adopt the service(s) or they won’t survive. Companies like ESPN and DAZN are burning through cash and have to get to the end-game, which is landing top-tier rights.”

Fan Marino: Tom Richardson, head of strategy and development for Mercury Intermedia (a leading mobile and connected TV app developer) and a professor at Columbia University (Sports Management grad program) suggested if ESPN+ is in fact the real or perceived leader it’s because of the marketing machine behind them. “ESPN is promoting ESPN+ ubiquitously. These other services must rely on paid media because they don’t have their own channels. That’s a huge advantage. As pure play digital media companies, your promotional platform is nearly non-existent.

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