Facebook Scores a Touchdown
Last week, Facebook became the latest of the new digital entrant to take a bigger slice of the rapidly fragmenting sports rights market: it signed an agreement with the NFL to bring game recaps and highlights to the world’s largest social network. The videos will appear on Watch, the recently overhauled Facebook video tab.
“We’re excited for Watch to become a destination for NFL fans to catch up on the latest on-field action and connect with one another,” said Dan Reed, Facebook’s Head of Global Sports Partnerships. “These full game recaps and shows will deliver comprehensive coverage, while enabling the active NFL fan communities on Facebook to watch and debate the top storylines from each week.”
It’s not difficult to see a trend here: the NFL has already signed an agreement for live stream 10 Thursday Night games globally, MLS and Univision announced a deal to live stream to Facebook back in May, and Twitter is working with NFL, MLB and college sports conferences to create live content streams around those sports.
So what’s in it for the rights holders and why are is there such a race going on from the OTT and social networks for sports content?
Let’s deal with the easy bit first: money. The TV ad market has always been dominant and sports – especially live – is the crown jewel. Facebook, Amazon and their ilk know that to attract audiences and more importantly major advertisers to spend big, they need premium content. There’s nothing that says “premium” like the major sports leagues do – and there’s noises that others will follow suit. Ed Woodward, the man who pulls the commercial strings at Manchester Utd, one of the world’s biggest soccer clubs, announced on an earnings call that he expected new digital competition to come to the table when the EPL’s broadcast rights are re-negotiated. Facebook also bid on the Indian Premier League cricket package to the tune of $600m but lost out to Star India. The rights holder smell an even bigger auction and no doubt will do all they can to ferment one. You can almost hear their hands rubbing together from here…
But it’s a lot more complex than just a matter of money, especially for the leagues and their stakeholders.
More and more fans- especially younger demo’s – prefer to consume content on digital platforms. According to Magna Global, people watching live sports on TV are getting older in the U.S., while younger fans are turning to social media to watch games and highlights if they can. The NFL for instance has seen a sharp decline in viewing on traditional broadcast networks and they see the potential to arrest this decline and get to harder-to-reach demo’s (young males especially) by switching more of their content to digital players.
Facebook, YouTube, Amazon and Twitter also offer some things that traditional nets just can’t: global reach for starters. Just look at how much the value of EPL rights has risen over the past 20 years. The main reason isn’t increased demand in the UK – where it’s always been the nation’s No. 1 sport – it’s because it has increasingly grown its fanbase internationally, and benefited from both rights value and associated revenues like sponsorships (often now global) and merchandise.
We’ve also discussed elsewhere in our blog what multi-faceted businesses like Amazon can do to differentiate the experience – bringing their e-commerce and food businesses into play – and Facebook and Twitter, with their ability to create a real-time fan experience built around community and live participation. Expect to also see more of this as social TV sports broadcasts become more engrained in the collective psyche (and get over any initial teething problems).
It seems like everyone’s a winner in this particular carve-up. Leagues like NFL hope they can offset ratings decline on domestic broadcast networks with viewers both in the US and internationally on platforms like Amazon and YouTube. As Hans Schroeder, NFL Media’s COO, put it:
“We have millions of fans on Facebook, and they continue to demonstrate an incredible appetite for NFL content. “We’re excited to bring a compelling set of highlights and shows from the NFL and our Clubs to our fans on Facebook.”
We’re not sure CBS, NBC and Fox will see it quite the same way though…BACK TO BLOG & NEWS