6 things to say about the future of media rights when stuck in a lift with someone from Amazon
New podcasts: The Bundle, Snap's sport strategy, Greg Dyke on the 'dozy FA' and why sports marketing never makes us laugh
Episode 5 of The Bundle is the latest in our fortnightly jump in to the sports media market, click on the pic to go direct.
What’s in it?
Broadly speaking, six things.
There are clear signs that broadcasters want to reset the risk-reward ratio when it comes to sports rights*.
(*As is now mandatory to say: ‘this was a trend before Covid and is now being accelerated’. Put it on a t-shirt).
Few organisations want to de-risk sports rights more quickly than DAZN. So how should we read the streamer’s new approach to Japanese footy? Is it a change to the sports media business model or a Covid make-good? Note, both things can be true at the same time.
From Martin Ross in SportBusiness, note the music industry comparison:
DAZN Group has negotiated a reduction in annual rights fee payments to Japan’s J.League in a two-year extension to its long-term agreement described by the global sports subscription service and media company as a “transformational” profit-sharing agreement that “redefines the traditional sports rights model”.
The revised 12-year contract from 2017 to 2028 is worth ¥223.9bn, or an average of ¥18.7bn per year. This reflects an 11.1-per-cent drop on the average of ¥21bn per year paid under the terms of the original deal.
The revamped contract includes a profit-sharing element that DAZN said is “inspired by the maturation of the commercial model between music labels and online music streaming services and, as seen for a number of years in the music industry, benefits all parties involved”.
Further down the same piece, a quote from John Gleasure, former DAZN chief commercial officer. It suggests that the Top Table of Elite Sports Properties™️ are keen to keep the risk-reward ratio pretty much where it is currently, in other words, the commercial risk will remain loaded on the broadcaster’s side.
“The rights-holder pot mechanism is still absolutely core to the service. There’s 140 properties that we outline in our press release in Japan. A number of those we’ll have had to acquire – the NFL and NBA for example. There will be some others we have paid advances for. Every deal can be different.
We’ll see.
Every rights owner whenever Amazon appears in a sentence containing the phrase ‘live rights’
Will they, won’t they? Yannick’s line is that buying content isn’t the endgame, but building distribution might be.
Amazon has repeatedly shown interest in the acquisition of (exclusive) sports rights and made other news (e.g. Linear Sports Channel, Twitch Sports Vertical) related to sports, but becoming a rights buyer in a meaningful way does not fit the usual investment case of Big Tech.
Here’s some “Amazon live rights” link porn, just in case.
Amazon is looking to add live TV to Prime Video
https://www.protocol.com/amazon-prime-live-tv
Twitch launches a new sports category as Amazon pushes for sports dominance
https://www.theverge.com/2020/7/22/21333867/twitch-sports-category-launch-streaming-content
Amazon Prime Video Nabs Seattle Sounders Exclusive Streaming Rights, Only for Washington State
“Video highlights will” probably not “be more valuable than live rights”, despite what the bloke from WarnerMedia said on SportsPro’s webinar
Here’s Peter Scott’s quote: https://www.sportspromedia.com/news/sports-video-highlights-live-tv-rights-value-warnermedia-peter-scott
Fair to say we don’t agree. But, something’s afoot. Here’s Yannick on the podcast:
Consumption has shifted from live to non-live (50:50) while monetary value is mostly created with live content (85:15)—presenting a lot of untapped potential for monetization or uncaptured value.
Price point alert: Téléfoot subscription offerings include €14.90 mobile rate
https://media.sportbusiness.com/news/telefoot-subscription-offerings-include-e14-90-mobile-rate/
Spotify strikes first sponsor deal with esports behemoth. Cue: LoLs.
https://www.sportbusiness.com/news/spotify-strikes-broad-based-audio-deal-with-lol/
See previous note on Spotify’s potential sport strategy:
Spotify has been the poster-child for how to effectively fight piracy with a superior product experience and value proposition for which consumers are happily willing to commit a share of their disposable income.
That does not mean that the music industry in general, or Spotify specifically, are without challenges: The challenging economics of subscription-based music streaming services (i.e. problem of marginal costs and lack of economies of scale) are a fact and increases the need for original, non-licensed content as evidenced by the company's recent acquisition, including sports-oriented multimedia company The Ringer for up to $200M contingent on certain performance milestones and talent retention. But it is also a fact that streaming effectively resurrected the entire music industry, after more than a decade-long decline in industry-wide revenues.
On a side note, speaking of Spotify and its recent push into sports, has anybody thought about the Swedish company getting into audio commentary rights to sports events for further differentiation? In the United States and the United Kingdom, traditional radio stations such as Westwood One, Sirius XM, ESPN Radio, or talkSPORT continue to have a firm grasp on such rights. A big difference to audiovisual rights though: the explosion in rights fees paid has not happened yet. At the same time, we start to talk about the "share of ear" amidst the rise of podcasting. Even the big technology companies have occasionally already ventured into the space of sports audio rights: In 2017, Amazon acquired the audio rights to the German Bundesliga and DFB Pokal through the 2020/21 season for its Amazon Music service. The obvious misfit between Spotify, or any other digital-first company for this matter, and audio sports rights though: marrying a new distribution technology (i.e. streaming) with a broadcast format that is most-used among older fans who continue to live in the analogue distribution system (i.e. FM/AM radio).
And finally…
Čeferin open to single-legged Champions League ties (but not until 2025, when everyone will have forgotten he said it).
https://www.sportbusiness.com/news/ceferin-open-to-single-legged-champions-league-ties/
And Snap are not going to pay for sports rights either, just in case you were wondering
Fwiw, I never think of Snapchat when the conversation turns to sport and the platforms. So we spoke to Snap’s head of sport partnerships Anmol Malhotra, who resisted my overtures to enter the live rights market:
We don’t see people coming to Snap to watch a game
The platform’s selling point to commercial partners is obvious: they’re where the kids are, and every sports rights owner will say anything to get close to them (eww).
The standout stat, which Anmol has used in several interviews, is 90% of Snapchat users are 13-24 years old. Roughly 61% of Snapchat users are female and 38% are male. 69% of US teens say they use Snapchat. 24% of US adults use Snapchat.
Here’s some more stats:
Despite appearances, it’s only a few years since SportsPro’s Eoin Connolly was in Snapchat’s target demo. And he brought all that boyish freshness to an excellent deep dive on Snap, here, which I largely copied in lieu of doing actual preparation for the podcast interview with Anmol.
But. The questions I have are these: do you grow up with a social channel or outgrow it? And secondly, how does sports content work in a messaging environment that is about ‘talking to best friends and family via pics and video’. Isn’t sport video an irritation rather than a ‘great way to engage a youth audience’?
This piece by had some nice background.
"Modern fans are on the go. They can’t be tied to ESPN Sport Center’s slow-moving queue. I’m excited about the movement we are creating - towards fresh, fun news that gets it right. We continually find ways to lower barriers to participation, so that as our audience grows in size, it also grows in loyalty."
Chat Sports, a sports news and rumour site with a large social following, use their Snapchat account for a popular morning news feature, Quick Hitters, which rounds up the biggest sports stories every day and delivers them via brief Snapchats, with Suzi Alvarez as a presenter at 10am, successfully utilising the appeal for users of easily and quickly learning the latest news with minimum effort.
Alvarez here points to ESPN’s Sports Center, an equally popular US site and app which bases itself around a live feed of incoming stories which, as Alvarez states, must be followed for information, rather than Chat Sports information being brought straight to the user.
SportsManias, another US-based sports news site, have a similar focus on direct-to-camera narration in their Snaps, with their host and Director of Social Media Alex Perrault stating that he tries to make their Snapchat stories "feel like a one-on-one experience, where the viewer feels like I’m talking to them."
The New Earnestness: Why the ads don’t make me laugh anymore
Bit of a segue, from Snap to moaning about the lack of laughs in marketing activation, but here goes.
This is something I mentioned to David Wheldon, who referenced research that showed how our affection for advertising has fallen from the days when the ads were sometimes more entertaining than the programmes. When working on activation strategy, I was struck how quickly the conversation went to brand and social purpose, and how hard it was to make that territory entertaining. When brand purpose is laid across sports marketing, it leads to some very worthy, earnest and dull outcomes, with brands apologising for their very existence, digging deep in to the grass roots and local community, promising to fill in gaps where government should be, but usually backing out after the glow of the press launch has faded.
Soon after talking to David, Tim Crow posted the pic below, in a Twitter to and fro with Heineken sponsorship lead Ben Blanco, around the time of the recent UEFA Europa Cup final, which the beer brand used as a platform for its non-alcoholic lager brand 0.0.
We all know why such an ad wouldn’t make it through the process today, and we can discuss whether that’s a good thing. But I sometimes wonder if the creatives are trying hard enough to make us laugh, or if regulation has made irony and wit dangerous no-go areas.
Final point. Someone pointed me towards AdWeek Europe panel, when Rory Sutherland interviewed the comedian Jimmy Carr, himself a former Shell marketing exec. Sutherland’s introduction referenced David Ogilvy, who wrote this in 1936:
“Facetiousness in advertising is a device dear to the amateur but anathema to the advertising agent, who knows that permanent success has rarely been built on frivolity and that people do not buy from clowns.’
“Was he in McDonald’s when he thought of that?” said Carr. Boom.
Unofficial Partner in The Times
Our recent conversation with Greg Dyke caught Martyn Ziegler’s attention. Get the full podcast here.
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