The Bundle Bulletin
The homework notes from the podcast, written by Murray Barnett and Yannick Ramcke
The July ‘24 episode of The Bundle is out now.
1. WE DON’T TALK MUCH ABOUT YOUTUBE
Intro
In 2023 YouTube launched Primetime Channels, where users can either subscribe to services like Warner Bros. Discovery’s Max through YouTube — or find exclusive ad-supported content from brands like the NFL.
YouTube has seen Amazon and Apple were buying rights while also keeping users on their services to watch other content. By developing Primetime Channels and hosting more live sports content in addition to the highlights and analysis that have long lived on YouTube, the service is becoming an even more significant player in activating an audience across all aspects of sports consumption.
It’s no longer just dominating the internet, it’s dominating the living room, too. YouTube made up nearly 10% of all viewership on connected and traditional TVs in the U.S. in May, according to Nielsen. Netflix ranked second, claiming 7.6% of viewership. Among streamers only, YouTube’s total viewership was close to 25% market share.
Media executives see YouTube as a companion platform to subscription streaming services and cable TV. Others view YouTube as an existential threat to the entertainment industry, stealing viewership from subscription streaming services.
Disney (and therefore ESPN) discuss YouTube “every day”. Netflix and Warner Bros. Discovery have consciously chosen to focus on the other 90% of the TV viewing world that isn’t YouTube.
You Tube consumption is 1 billion hours
More than 150 million Americans watch YouTube on connected TVs each month
2023, YouTube took $31.5 billion in advertising revenue, up 8% from 2022 and 271% from six years ago. In the first quarter of 2024, YouTube’s ad revenue climbed 21% from a year earlier to $8.1 billion.
MoffettNathanson media analyst Michael Nathanson estimated in March 2024 that YouTube is worth $400 billion as a standalone company — more than Disney and Comcast combined.
A younger audience - Ninety-three percent of teenagers say they’ve used YouTube, far outpacing TikTok (63%), Snapchat (60%) and Instagram (59%), according to a 2023 Pew Research study.
Why it matters
DAZN creates content for its ad-supported traditional channel, broadcasts events on YT, offers its NFL GamePass broadcast outside the U.S., and is working with YouTube on a pay-per-view model.
YouTube TV had its first subscriber loss in Q1, per estimates, tied to the end of the NFL season
The lack of must-watch linear TV content is taking its toll on both traditional and virtual pay TV
Alphabet needs new ways to position YouTube TV for the future
Where’s it going
Whilst the picture for sports investments by the streamers has started to become clearer, Youtube remains an enigma. Outside of NFL, they haven’t made substantial investments but have the scale and reach to do so.
The proliferation of ad supported tiers Netflix is now going head-to-head with YouTube for marketing dollars after introducing its ad-supported tier in November 2022.
The Yannick Pull Quote
“Everybody needs to have a YouTube strategy, but now that broadcasters start to realize that the entire business cannot be owned and operated directly, as much as they would like to, the next evolution of YouTube is becoming a full-funnel business with material top-line revenue impact for content owners — instead of empty calories and non-monetizable and -identifiable eyeballs.”
Further reading:
YouTube dominates streaming, forces media companies to adapt (cnbc.com)
https://variety.com/vip/youtube-tv-nfl-sunday-ticket-cord-cutting-1236050258/
2. WHATS GOING ON WITH LIGUE 1 - LFP TARGETS ‘2M’ SUBSCRIBERS AND ‘€578M A SEASON’ FOR DTC SERVICE
Intro
With just two months to go before the start of the 2024/25 campaign, the LFP has yet to agree a media rights deal amid lukewarm interest from broadcasters who have yet to submit what could be considered a satisfactory offer.
Ligue 1’s domestic rights were held by Amazon, €275 million/season (8 match-ups/week) + BeIN Sports €330 million annually.
Amazon’s cut-price deal was the result of the collapse of Ligue 1’s previous €814 million (US$873 million) a year agreement with Mediapro, which launched the Telefoot network to show the games.
DAZN and beIN seem to be the only interested parties (Canal + has a contract to carry beIN)
League has abandoned €1bn revenue target
Plans for streaming service reportedly presented to LFP board
The service would offer all 306 matches at a cost of between €25-€30/month
Details published in French media included targets for three of the five seasons: €419m in 2024-25, €568m in 2026-27 and €718m in 2028-29. The league would earn these amounts if it hit 2.1m subscribers in year one, 2.8m subscribers in year three, and 3.4m subscribers in year five. The channel would earn additional income from advertising of €10m in year one (rising to €18m in year five), and a further €15m per season from sales to commercial premises. CVC will take 13 per cent of media rights revenues through its equity stake in LFP Media (this isn’t mentioned in any plans).
Media reports have put the number of subscribers to Amazon’s Ligue 1 Pass, which costs €14.99 per month, at 1.7m. Canal Plus had 9.8m subscribers to its pay-television services in France in 2023, an increase of 3.3 per cent on 2022.
Nicolas Rotkoff “to average of 2.1 million people for the first season is crazy…..I think they’ll get one million to 1.5 million maximum.”
Ligue 1 CEO have been privately pushing league president Vincent Labrune to mend the damaged relationships with Canal Plus and beIN Sports.
Why it matters
With NBA going to market in France with a bumper draft of French players + Webenyama, timing could be very tough to get Canal+ engaged
The impending Paris Olympics will also make deal making tough over the next 6 weeks.
Where’s it going
DTC is difficult and leagues aren’t best equipped to run them – They require extensive (and costly) marketing, customer service and technological infrastructure, and don’t deliver predictable revenues.
Lack of revenue certainty for the clubs is already affecting player transfers (I have spoken to a couple of EPL CEO’s who all say the transfer market with France has significantly slowed).
Twist in the tail – The victory for Marine Le Pen in the elections (orchestrated by Vincent Bollore – owner of Canal+ could see a radical change in C+’s view of acquiring the rights??
Yannick’s instant reaction (more on that on the pod):
The Yannick Pull Quote
“Any league-operated DTC channel is a nice option to have, as a bargaining chip to create any incremental competitive pressure. It’s less good if such league-operated DTC channel becomes the only option left. There’s so much to unpack here, from the missed opportunity of the CVC investment which is now catching up on them to the leaked business case for the DTC channel effectively communicating to the broadcasters what bid amount would be good enough to accept on the spot.”
Further reading:
https://www.sportspromedia.com/news/ligue-1-dtc-streaming-target-revenue-subscribers/
3. WOMENS CLUB FOOTBALL – MEDIA RIGHTS VALUE GROWTH GLOOMY?
Intro
2019 FIFA Women’s World Cup, UEFA Women’s Euro 2022 and the 2023 FIFA Women’s World Cup started a revolution in Women’s football rights. During 2021 and 2022, Uefa Women’s Champions League, England’s Women’s Super League, Germany’s Frauen Bundesliga, Spain’s Liga F and Sweden’s Damallsvenskan all struck their first media rights deals independent of men’s football properties.
There have been strong viewership, growing attendance and growth in every other meaningful fan engagement metric, leading rights-holders to the belief that their media rights should be worth significantly more than when their current deals were struck. Media broadcasters argues they have ‘over paid’ and this growth was factored into their thinking when acquiring these rights.
WSL chair Dawn Airey stated her belief that the WSL would become a “£1bn-revenue” competition by 2033 and that the figure – which includes central and club revenues – was “based on a pretty decent and detailed business plan for over the course of the next ten years”.
WSL (3 season ’21-’24 is £7m/season). Sky willing to pay around £10m but WSL think its worth double that. ‘24-25 season has resulted in one year roll over - exclusive rights to 44 WSL matches each season, plus production costs and significant commitments to marketing and advertising the league.
DAZN – Significant investment that has not paid off - €20m per season for UEFA WCL. Ligue F, Frauen Bundesliga and Spanish Womens League.
Behind the scenes, media executives at Uefa believe that the UWCL has severely underperformed in terms of viewership. It is thought that Uefa has been particularly disappointed in viewership on YouTube, where matches often averaged below 10,000 live viewers, peaking at mid-to-high five figures or very low six figures for the competition’s biggest matches.
Two Circles have rights from 2025-26, is likely rely heavily on media exposure that prioritises sponsorship income and fan engagement. Uefa hopes this will make the competition more appealing to free-to-air broadcasters that are currently reluctant to pay rights fees for women’s club matches. DAZN may retain some rights.
Why it matters
“The rights-holders are getting overexcited with their valuations,” one buyer told SportBusiness Media. “Some of the numbers we are hearing aren’t rooted in reality.”
However Women’s football should be stable in the longer term future = the fans today are from younger demographics who will be the future buyers of content
Where’s it going
More than ever (climate but also better access to meaningful data) broadcasters are P&L driven. Women’s football broadly speaking does not wash its face when considering rights fee expectations
International media rights market for women’s club football is still very small. Sellers say that securing rights fees outside the UK, western Europe, the US and Australia is almost impossible.
The remainder of the 2020s is unlikely to produce the kind of rocket-fuelled growth women’s football has enjoyed over the past five years, and there are likely to be more tough negotiations between rights-holders and broadcasters over the coming months and years.
The Yannick Pull Quote
“Whereas there’s proven consumer demand for women’s football, I don’t think the consumer’s willingness to pay for the women’s game is close to the men’s game — and I would recommend to minimize the engagement and consumption barriers in front of women’s football as much as possible at this stage of its life cycle. In the short-to-mid-term commercial revenues will need to dominate, and reach to be prioritized over [media rights] revenue.”
Further reading:
https://media.sportbusiness.com/2024/06/has-womens-club-football-lost-its-media-rights-momentum/
4. FIFA SEEKING PARTNERS FOR FIFA+
Intro
June 28 – FIFA has enlisted UBS to raise up to $2 billion for the expansion of its streaming platform FIFA+, Bloomberg reports.
FIFA and UBS will target financial investors for a minority stake in the platform in the US and the Middle East.
Bloomberg’s reports suggest FIFA is both accelerating the development of its streaming platform and seeking new revenue streams.
FIFA+ was launched in 2022 - the aim was to broadcast more than 40,000 matches/year, including more than 25% matches in the women’s game.
Why it matters
The world governing body has long struggled to generate substantial income outside its quadrennial World Cup, its flagship tournament.
Next year’s 32-team Club World Cup was planned to tap into the lucrative commercial market enjoyed by the clubs and confederation club competitions.
But FIFA has found the concept easier than the reality as it has struggled to find sponsors and broadcasters to underwrite the competition.
FIFA was in talks with Apple Inc for a global broadcast deal, but that did not materialise prompting reports in the US that it would put the whole competition at risk. The tournament will see major European clubs play under FIFA’s banner predominantly on the east coast of the United States.
Where’s it going
No one is immune to the market forces.
DTC isn’t just about content. Are FIFA able to manage direct to consumer relationships?
The Yannick Pull Quote
“I don’t believe in leaks or reports [about seeking funding for FIFA+] be circumstantial, there’s always intention: The below-expectations bid from Apple, which would be a picture-perfect fit for the re-invented FIFA Club World Cup at first glance, doesn’t live up to the revenue guarantees made to clubs persuading them to participate. FIFA thinks it might have to come up with the money in another way, but sustainable [business] or credible [bargaining chip] is different.”
Further reading: