English Premier League’s just concluded transfer window witnessed more than US$1.4 billion change hands. Sky and BT paid close to a whopping US$7 billion for broadcasting rights in UK, which is to be followed by an expected US$4 billion by companies outside of UK. Welcome to the “Live Economy” which goes way beyond live broadcasting. Recently concluded Rio Olympics put Live streaming in the spotlight, with NBC reporting that its Apps and Websites recorded up to 50 million viewers that streamed 3.4 billion minutes of Olympic events and coverage across Web browsers, tablets, smartphones and connected TVs.
What does it mean for broadcasters? With user preferences moving from linear to on-demand, live content is undoubtedly broadcasters’ most valuable asset. Live Sports and News are the most obvious genre but other content types as concerts, award shows, carnivals, social/community and religious events can attract niche audience. Even celebrity wedding is an attractive category (Akamai reported that British royal wedding in 2011 broke the record of number of concurrent unique live stream set by the football world cup in 2010).
However, as Rio Olympics euphoria simmers down, even bumper advertising revenues can’t mask the fact that user viewing preferences are rapidly changing. US witnessed history’s biggest Pay-TV subscriber loss with more than 800K Pay-TV subscribers cutting the cord in Q2’16 vs 290K in Q2’14. As more users migrate to online and to connected devices, it is time for broadcasters to smartly leverage the power of live content.
Live content rights, especially those of live sports, cost a fortune. Advertising and sponsorships are the most obvious and traditional ways to monetize. But finding and acquiring a niche audience comes first. Instead of spending all the dollars on digital ad campaigns, partnering with sports bodies in different markets, for example, can lead to attracting the right audience. User engagement, via gamification, bridging offline and online world and creating a “digital water cooler” where fans can truly engage with the content and with each other, is required to create stickiness.
In terms of monetization, there are several ways to package depending on the duration and frequency of the event. Seasonal and recurring sporting events can be monetized via either Seasonal passes or a discounted multi-year pass (for example, typical English Premier League content license deals go for 3 years). Content providers streaming multiple sports categories can curate different packages. At the same time, some live content re-runs can be monetized.
Users are consuming content over multiple screens, including browsers, tablets, game consoles, Smart TVs, Apple TV and other devices. Besides, most of the streaming services cater to a wide range of audiences, with some preferring dramas, some movies, while others preferring sports. User experience, under such multi-screen and fragmented customer segments scenario, becomes a critical factor. It is important that the user experience is tailored for the right form-factor. Features on mobile Apps, for example, don’t make sense on Connected TVs.
Equally important is dynamically serving different user experience to users with different content preferences. Some examples include surfacing different skins and/or layout to different customer segments and promoting sports content to a sports fanatic while recommending dramas to a drama lover. At the same time, content operations and marketing teams must be empowered to create such dynamic user experiences in real-time, without any involvement of the technology teams. In the run-up to the actual event, features such as promotional banners, reminders, notifications and seamless payment are all important. Second screen experience could be very useful as well, providing users access to related information while users consume the live event on the TV screens.
Video quality, and most importantly infrastructure robustness and scalability can make or break the overall experience. With so much riding on the event, even momentary downtime or deterioration in quality can cause extreme customer dissatisfaction. Infrastructure planning and load testing must be done weeks in advance, considering all components of the solution and not just the front-end.
Finally, there are Social Media giants, Twitter, Snapchat, Facebook and YouTube, who are ramping up their live streaming capabilities, providing content providers another medium to interact with an already engaged audience. A few months ago, more than 800,000 users watched a live-stream on Facebook on how many rubber bands it takes to explode a watermelon. Of course, content providers can beat this “feat”. Earlier this year, NBCUniversal-owned E! network launched “Live From E!”, an entertainment news and gossip series, simulcasting on Facebook Live.
NBC also signed an ad-revenue sharing deal with Snapchat to create a channel on its Discover platform to produce daily snippets from the games such as behind-the-scenes footage shot especially for Snapchat. Seven brands, including Walmart signed up to advertise.
Twitter, in the past months, has struck deals with the National Hockey League (NHL), Major League Baseball (MLB), National Basketball Association (NBA) for live coverage, highlights and other content mix and also rumored to bring this content to Apple TVs. Facebook has reported that its average user watches live video three times longer than other types of video types, clearly highlighting as much more engagement.
While there are concerns among content providers on increasing clout of technology companies and getting the short-end of the advertising stick, we believe that content providers must find ways to optimize their content offering by bringing social media platforms into their distribution and monetization strategy.
Photo: NHL promotes its next live game on Twitter.
