UK and US Sports Operators Spending 15% of Budget on OTT

10 May 2019

According to the findings of ‘Where the Money is Going: The Future of Sports Entertainment’, a global analysis of the economics of OTT sport from sports media technology services specialist Deltatre, sports operators worldwide are now spending 15% of their total budgets on OTT, meaning that by 2021, more than $6.8 billion (R98.5bn) will be invested in the OTT tech stack in North America alone.

For the uninitiated, ‘over the top’ (OTT) is a term used to refer to content providers that distribute streaming media as a standalone product directly to viewers over the internet, bypassing telecommunicationsmultichannel television, and broadcast television platforms that traditionally act as a controller or distributor of such content.

Where the Money is Going focuses on the factors underlying that investment, including consumer viewing trends, subscription patterns, and insights from decision-makers. It was compiled through research of US and UK sports fans, analysis of 1.2 billion minutes of live streamed sports content, and exclusive executive interviews with top sports executives worldwide.

The main findings conclude that:

  1. For two-thirds of consumers, $39 (R565) per month has become the cut-off point for sports content spend – with the remaining third prepared to pay more. With viewing habits changing across the media landscape, this has led global sports operators to increase their tech investment to better serve and monetise fans of all ages and preference. 
  2. Investing in new functionality to maximise fan engagement through OTT services results in a 24% uplift in subscriber acquisition.
  3. Global sports operators currently commit 15% of total budget to the OTT tech stack – which will be worth $6.8 billion by 2021 in North America alone.
  4. IP-delivered services from leagues, federations, and operators are the future gateway for sports consumption – with ‘OTT 2.0’ expected to emerge by 2021. Insights from senior sports executives suggest the ‘freemium’ model or ‘family packages’ will become essential for bringing new consumers into the ecosystem and converting them to fully paid-up subscribers thereafter.

“The sports OTT KPIs have changed,” declared Giampiero Rinaudo, CEO of Deltatre. “It’s no longer just about streaming the match. Encouraging viewers to come back day after day is the gold standard, even when there’s not a live match taking place. That means maximising engagement on the shoulders of the game itself. Tailoring video and editorial content to different types of fans and reconfiguring the UI and UX based on time of day, user insights, or the latest developments in the sports world that week, is how brands can create a better ecosystem around a sport.”

Other report highlights include:

  • Demand for content has evolved beyond the living room, with 39% of consumers watching four or more hours of sports programming on mobile per week and 1/3 of consumers citing 5G as a technology expected to have the most significant impact on sports content consumption.
  • Fans also want to feel closer to the action. 72% of those surveyed cite personalisation and a tailored user experience as the most important feature offered by OTT sports services. Almost the same number of consumers (71%) want deeper immersion and a desire to feel closer to the action through the more advanced functionality that OTT can provide.