Looking at industry trends is highlighting the obvious - at least for those who read industry material daily and live these trends conversationally. What’s happening in our industry has been predictable since its infancy so observations should be obvious and simple.
We are not transforming consumers but rather reshaping and adapting them.
Adapting them to use new technologies with new price points and to their enhanced capabilities. With that preface in, we’ll now put some thoughts into how sports are shifting Pay TV subscribers forward into a streaming future - with focus on how Foxtel with Kayo Sports (News Corporation´s new sporting service in Australia, powered by Vimond) is capturing the potential of the opportunity.
Traditionally there has been a prevalence of thinking of OTT as being complementary to the Pay TV distribution model. This remains true, and often what can be accessed through OTT is simply an extension of the pay service. This is changing and one area that’s quickly pulling this forward is sports.
Let’s put the story in perspective through some numbers (circa):
- 380 million SVOD subscriptions around the world by 2021
- 80% of sports fans subscribe to a Pay TV service
- 91% of sports fan subscribe to get live events
- 60% of all sports fans are interested in paying for a sports service
- 70% of global consumers watch live sports through cable subscriptions
And in addition:
- Nearly everyone thinks they pay too much for their traditional Pay TV package
- Millennials and Gen Z are increasingly and commonly watching sports, and more prevalently eSports, on their mobile devices
The story those numbers frame is that the sports consumer is used to paying for content. And given a user base that is used to paying, transitioning from paying for one viewing platform to another is an easy leap.
Sports are bread and circus in the most obvious manifestation, an alternate reality construct that allows viewers to assemble broad narratives of engagement and escape from other less favorable realties around them. Sports fans can be fanatic, loyal, and often detail (stats) oriented. They can be deeply immersed through data and emotionally engaged in the outcome of live games and what that means to their teams, players, and their standings.
The appeal to sports fans of streaming services, beyond cost and ease of multi-device access comes in increased layers of interaction. They’re treated to split screen views, simultaneous games, and the possibility of multiple camera angles. Given a fan’s devotion services can be personalised with content tailored to her favorite teams and sports. Immersion can be enhanced with real-time interactive statistics, league standings and leaderboards.
While there’s chatter about VR and AR in sports streaming those modes still have their most practical uses in warfare, gaming, and corporate training. Going forward streaming services have the potential for more immersive viewing experiences though with AR and VR but that remains ahead. Who wouldn’t want to watch or play as Tom Brady, Maria Sharapova, or Messi?
With that backstory we’ll take you down under to look at Kayo Sports over a series of pieces. At launch Kayo is available on Apple and Telstra TV, for iOS and Google Android smartphones, on web browsers and via Google Chromecast Ultra devices. At $25 AUD, per month, Kayo positions themselves as the anchor for the Australian sports viewing market. That price fits nice if you assume a spend per household for content of about $50 AUD a month: services like Netflix and/or a local SVOD with some a la carte services rounding up to $50 too in that equation.
Core to the success of Kayo will be the rights packages that have been negotiated. For launch Kayo have announced they will have over 30,000 hours of live events for the year, with an average of about 2000 hours per month covering over 50 sports. Their focus will be Aussie favorites likes the AFL, NRL, Rugby Union, A-League Football, Tennis, and Formula 1. They’ll further augment that focus with a breadth of international content including the NFL, NBA and NCAA College Basketball, MLB, international soccer such as the FA Cup, Socceroos matches, La Liga, Serie A, and Bundesliga, golf such as the US Open, European PGA Tour, and British Senior Open, as well as UFC matches, MotoGP, World Rowing Championship, the Matildas, Australian basketball league WNBL, Women’s Champions Trophy in hockey, and the Women’s World Rugby Sevens.
Given the above Kayo delivers the breadth as a catch-all sports hub, their rights well negotiated to broadly cover Australian sports interests. With features like split screen with audio switching, live replay, mini highlights, easy navigation, and very finite video player controls Kayo captures the potential of the medium. Interactive stats and multiple camera angles are still slated for future enhancements to take the potential further.