Sports - In a League of its Own

Sports - In a League of its Own

"Believe me, Harvey. By the end of the week, that kid will cook his own goose." – Jimmy “Dodge” Connelly, Leatherheads, Universal, 2008

 

Okay, the Super Bowl was … super.

An estimated 82 percent of folks in the US (Amdocs) watched the game at home, in bars, wherever.

Las Vegas got an estimated $1.1B financial boost.

Americans spent about $17.3B on food, beverages, apparel, decorations according to the NRA (National Retail Federation), 80 percent of that for food/drink.

 

 

 

According to the NCC (National Chicken Council), folks scarfed up 1.4B plus chicken wings

Chow Down – According to a bunch of research firms that study everything, the Super Bowl is a great time to put your diet on the backburner and enjoy your favorite game-watching foods, including special chicken wings.

Since we had veggies and dip during the game, we didn’t realize that wings weren’t just wings and people across the country had their different flavors/styles of game favorite.

According to the NCC (National Chicken Council), interest in the game spread across the pond and increased 203 percent in Britian even though the fave sport there – and the rest of the world – is futbol (sometimes called soccer) with a global audience of nearly 1.5B for the World Cup.

Taylor Swift made it to the game, dominated airtime play/buzz and changed the whole demographics of the game audience from burly weekend warriors to Swifties.

TV commercials sold out early, going for a mind-boggling $7M/30sec for beer, chips, movie stars, other (analysis…later).

We were also a little distracted from the game play analyzing all of the technology CBS Sports used from boink cameras (when the ball hits the goalposts – who knew it was a word?), 4K views of everything/from everywhere, Nickelodeon’s SpongeBob SquarePants viewing options for the kids, and extended use of AR/XR (augmented reality/extended reality).

Next year, will folks watch the spectacle with Apple’s Vision One or other VR headsets?

According to Amdoc, 33 percent of the game viewers said they were interested in a more immersive, VR/MR/spatial computing game viewing experience and 41 percent of the GenZers thought adding a little AI-enhanced personalization could add something to the game for them.

Oh yeah, before we forget, the Kansas City Chiefs took home the trophy but the 49ers didn’t have anything to apologize for…solid game!

 Kansas City Chief’s Coach Andy Reed holds up the 2024 Super Bowl trophy following a tight overtime win over the San Francisco 49ers.  It’s the second trophy for the organization which he says is the beginning of a dynasty. 

And there was plenty of drama leading up to the big game and a big post-game question--will the Disney, WBD, Fox coincidental announcement of a new sports “bundle” really change anything. 

The three will still offer “their contracted sports separately (ESPN – Disney, Fox – Fox Sports, WBD – TNT, GNC (Global Cycling Network), GMBD (Global Mountain Bike Network), Golf Digest/PGA tour and other odds and ends) and the bundle will only be an estimated $50-$70/mo.

Even Google’s YouTube TV jumped into the fray, bragging that they had sports and a bunch of TV channels for only $65/mo. and already had 8M subscribers. Yes, it is slightly dwarfed by every other studio/tech streaming service that priced themselves at $6-$20/mo.

Rights Cost – The cost to acquire TV/streaming rights for sporting events continues to rise, both in the US and globally.  

According to Axios, sports rights aren’t cheap, the TV/streaming rights in the US cost about $30B. 

Ampere Analysis noted that rights value for the top 15 sports leagues – football, futbol, baseball, basketball, etc. –  will be $66.9B by 2028 and $88B by 2033.

While the sports may be sports, they’re also a really big (huge) business, racking up about $490B last year and growing to over $623B by 2027 – excluding chicken wings, chips, beer/ale, guac, etc. 

We’ll set aside Google’s YouTube.TV because it’s really a hybrid pay TV where you buy (O.K., rent) the internet connection separately.

You simply pay for the internet connection – which everyone needs – separately and flip the same old channels.

Instead, the studios bundle represents the threesome’s effort to grab a bigger share of the $8.5B sports subscription market.

But. what does the studio bundle really mean for the home viewer:

  • WBD doesn’t have any NFL games but will probably renew its deal with the NBA (National Basketball Association

  •  NBC/Peacock still has Sunday Night Football

  • CBS/Paramount has NFL rights, NCAA men’s basketball, PGA tour, soccer’s championship league

  • Amazon has Thursday Night Football plus NFL wild card playoff

  • Apple has MLB (baseball), MLS (soccer) season pass

  •  Netflix has WWE (wrestling), behind the scenes racing and baseball segments

  • Paramount Global has rights to the NFL, NCAA Men’s Basketball, the PGA Tour and soccer’s Champions League

  • DAZN – sometimes called da zone – has rights for almost every sport you can think of and more than 300M live, on-demand subscribers in 200 countries especially Italy, Spain, Germany, Japan, France, Portugal, Belgium, Taiwan, US, Canada

  • Many sports – especially regional and local - are missing from the Disney/WBD/Fox bundle

  • Being a sports fan doesn’t really mean you’re interested in all sports – Americans like football but the world’s largest sport – futbol – not so much

              

Viewing Fervor – Being a sports fan doesn’t mean you’re willing to follow every sport that is out there.  Some sports have more dedicated fans than others and some people are only interested in certain sports. 

Who’s going to handle building the infrastructure and managing the ads/partner payouts?

·       WBD is pretty busy shuffling, fine tuning their Max streaming service to get out of the red

·       Disney is laser focused on making Disney + a profitable #2 in the streaming arena and is looking for a strategic partner for ESPN or stand-alone service

·       Fox is … Fox

People watch the Super Bowl (actually any sports event) once – in real-time, not when/where they want to watch it. 

Playing it over and over again and again is usually reserved for the sports fanatic in his man’s cave where he analyzes, critiques every call, every play until next year’s “big game” rolls around.

                 

 Interest Varies – Watching sports takes top priority for many people around the globe but interest varies depending on the sport. 

Everyone else will return to their normal viewing habit with their favorite channel or streaming service to watch … something else, something new.

Yes, after the Big Game Netflix was probably the first streamer you turned to because they’ve been developing the most balanced menu for viewing consumption. 

Netflix has been consistently profitable the past few years and has grown steadily (260M subscribers globally) by carefully venting which projects they will develop/acquire and which they will license from the studios/networks.

Data Cloud – Netflix relies heavily on their content/trends/subscriber data to ensure they invest in the right content and keep their library of films/shows constantly fresh and refreshed. 

Okay, it’s a little more than “a talent.”

They have a monstrous stockpile of content, genre and subscriber data as well as a powerful analytical/recommendation engine that guides the development of their content and determine what projects – films/series people want today and tomorrow.

Often before the subscriber knows what she/he wants to sit down and watch.

 

Audience Building – Studios and networks stepped back from their earlier decision to take back their content from Netflix, feeling that show/movie viewership might also add to their success and profitability. 

While the company won’t license its own originals, studios have rewarmed – everyone pulled back all of their content from them a few years ago – to the idea of licensing their content to Netflix.

Content kings like Disney, Paramount and WBD (never say never again) that had been clawing their way to streaming profitability, found it to be financially rewarding to license shows/movies to Netflix rather than hoard them in their vaults gathering dust.

 While they add – and pull – projects from their library with maddening regularity … just when you’re hooked on a video story poof it’s gone but it’s all done with cold, hard data that tells them when folks are tiring of certain content and are on the verge of cancelling.

It eliminates churn and yes adding an ad-supported tier also helps keep consumers connected until the next package of “gotta see” films/shows are added.

 

Viewing Priorities – People like variety in the content they watch and the type of stuff watched is constantly changing.  Studios and streamers have to closely track and balance the projects they produce to satisfy the majority of the viewing public. 

At the same time, they are busy investing in unique projects that set their service apart from Prime, Apple TV+ and the studio/networks.

The analytics/development/selection seem to be paying off because according to Nielsen, they continue to lead the streaming pack with more than twice as many global viewers than their closest streaming competitor.  

Addressing the needs of the total streaming viewer, the company has also added a major streaming and mobile gaming library – 77 and counting – as well as sports with an extensive collection of sports documentaries and most recently WWE’s (World Wrestling Entertainment) Raw or as we think of it … scripted stuff.

And while Co-CEOs Ted Sarandos and Greg Peters may have hosted big watch parties at their respective homes for the 49ers/Chiefs/Swift event, committing a huge chunk of the firm’s annual development budget on a day of football probably isn’t high on their “gotta do” list.

 

Realtime Investments  - Regardless of the sport, most people want to watch the action as it is taking place, in real-time, rather when it is most convenient for them to view the action/excitement. 

Acquiring the rights to the event or league’s year-long activities is just the tip of the iceberg.

NBC, Peacock will invest a lot of time, people and equipment to cover this year’s Paris 2024 Olympics. 

CBS and Paramount+ did the same for this year’s coverage leading up to and including the Super Bowl. All we really remember are the commercials and our daughter squealing every time Taylor filled the screen.

Of course, Paramount also royally S****ed up the streaming with a bunch of dark screen segments. 

Folks, it ain’t as easy as it looks…Netflix has been fine tuning it for years.

What the networks did get right is what they are experts at…loaded in as many super expensive ads as possible…we lost count after 90!

Speaking of the ads everyone played it safe or made us wonder why they blew the money…must have been Vegas.

We did watch them though – and rated them - as did a friendly “critic” in SoCal. 

We generally don’t agree on a lot but this time totally in sync on the top ads:

                     4/5:

-          Bud - Clydsdales, grown up pup, snowstorm

-          Pfizer – soft touch with Cancer research

-          Doritos – LOLs

3/5:

-          State Farm – Arnoldnator, Jake

-          VW - evolu

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