Pro Sports Using OTT Video to Target Younger Viewers

Formula 1 auto racing is a global brand generating more than $3 billion in revenue. It attracts an audience of 500 million people – largely older than Madison Avenue’s coveted 18-34-year-old demo. In the U.S., the rival to IndyCar remains a niche TV sport.

A survey by Ampere Analysis found just 6% of U.S. sports fans identify F1 as a sport they would watch on TV. Indeed, domestic viewers will rely on a repurposed feed from U.K. satellite TV operator Sky to watch any coverage of the 2018 FIA Formula 1 World Championship season.

F1 TV, the sport’s newly-launched over-the-top video service, is seeking to buck its older demo fan base by targeting younger viewers (under the age of 40) usually associated with streaming video.

London-based Ampere contends the $8-$12 monthly service – available in four languages (English, French, German and Spanish) and in nearly two dozen markets, including the U.S., will appeal to younger viewers because of the OTT element.

“As more sports become available OTT, it gives less popular leagues an opportunity to monetize markets where they are not mainstream enough to be attractive to a major broadcaster,” analyst Alexios Dimitropoulos wrote in a blog.

Even mainstream sports are taking the hint.

In the U.S., Major League Baseball, National Basketball Association, National Hockey League, Major League Soccer and World Wrestling Entertainment have launched OTT platforms — MLB with spectacular results.

The national pastime spearheaded the OTT movement among U.S. professional sports through its MLB Advanced Media division. The unit – which is co-owned by all 30 MLB franchises – recently sold backend digital tech subsidiary, BAMTech, to Disney in a deal worth more than $3.5 billion.

“Sports fans face a myriad of distractions and while commercial opportunities are still developing, it’s critical for rights owners to build their presence on social platforms to help maintain loyal audiences, support tune-in and provide a content experience which meets the needs of viewers who watch much less linear TV,” Gareth Capon, CEO at digital media aggregator Grabyo, told consulting firm KNect365.com.

Indeed, WWE, which makes millions marketing pay-per-view wrestling entertainment, generates significant ancillary revenue from WWE.tv, an OTT platform with almost 1.5 million subscribers.

“We expect more leagues and events to follow the same route … over the next few years,” said Dimitropoulos.

Verizon Eyes 5G Future as Fios TV Ups Sub Losses

Verizon Jan. 23 announced it plans to roll out 5G wireless functionality in upwards of five major cities in the second half of this year – the first wireless carrier to do so.

The technology should dramatically increase streaming video speeds, with 5G download speeds up to 10 gigabits-per-second compared to one gigabit-per-second for 4G LTE. The higher speed could result in downloading a HD movie in seconds.

Verizon aims to harness 5G technology with its new Oath platform, whose content brands include Yahoo, HuffPost, AOL, Tech Crunch and Engadget, among others.

The telecom, which recently inked license deals with the NBA and NFL, added 47,000 Fios high-speed Internet customers to end the fourth quarter (ended Dec. 31, 2017) with 5.9 million subs.

“The next industrial revolution will be on Verizon’s [5G] network and will positively impact society like no technology we have seen before,” CEO Lowell McAdam boasted on the fiscal call.

Meanwhile, Verizon’s pay-TV platform, Fios video, lost 29,000 subs in the quarter, to end the year down 75,000 subs at 4.6 million.

When asked whether Verizon would follow in the footsteps of AT&T and Walt Disney seeking to acquire a media company, McAdam punted. The executive admitted Disney’s acquisition of 20th Century Fox underscores the value of scale in the market place.

McAdam said the jury is out regarding the merits of Verizon acting as an independent distributor of content compared to owning and creating content.

“I think until all of this media consolidation [AT&T/Time Warner, Disney/Fox] shakes out, you really can’t determine whether that’s a path we would be interested in,” he said. “But I can say unequivocally there is nothing going on right now without considering a large media play [involved].”

“In fact, if you look at our actions like the NBA and the NFL announcement … we think being able to monetize through advertising and being independent is a very good place to play for us right now.”

Wall Street remains on the fence regarding Verizon’s first-mover 5G strategy.

“5G is going to be a hundred times faster than your typical Internet service, so not only is it going to be faster, it’s going to have better margins and give Verizon a ton of opportunity for new customer growth,” Michelle McKinnon, analyst with Payne Capital Management, told CNBC.

Jonathan Chaplin, analyst with New Street Research, said that while 5G enables Verizon to bridge technology divides in the market, doing so comes at a major fiscal cost.

“We’ve pegged it at least at $35 billion dollars,” Chaplin said. “That’s going to [more than] absorb the gains [Verizon is] going to get in tax reform savings over the next four or five years — which I don’t think the market is anticipating.”

 

 

 

 

Verizon CEO: ‘We’re Going to Completely Change the Way People View Sports’

Verizon and the National Basketball Association Jan. 17 announced an expansion on their three-year partnership that includes subscription streaming video and access on Yahoo.

Beginning with the NBA All-Star Weekend in Los Angeles (Feb. 16-18), the NBA and Verizon will unveil a series of collaborations leveraging Verizon’s 5G network and technology.

Verizon subs will direct Access to NBA League Pass, the live over-the-top video service co-managed by the NBA and Turner Sports – on Yahoo Sports and other Verizon media platforms.

The telecom and NBA will promote daily highlight video show, commentary, in addition to augmented reality, lifestyle programming utilizing the league’s archive of footage across Yahoo Sports and Verizon’s media platforms.

“With the addition of live NBA games … and more to our mobile sports offering, Yahoo Sports and Verizon’s family of media brands are becoming … an alternative for partners and advertisers,” Brian Angiolet, SVP, global chief media and content officer at Verizon, said in a statement.

The new agreement comes as Disney seeks to expand the ESPN brand digitally, including launching a standalone SVOD service this year.

Verizon CEO Lowell McAdam said that when the telecom purchased AOL and Yahoo in 2015 and 2017, respectively, a major objective was distribution of sports programing to more than 1.3 billion users across the Oath platform.

“As we look at digital media viewing, that’s got to be the cornerstone,” McAdam told Yahoo Sports.

The executive believes that after three years working with the NBA, Verizon can leverage all “those digital eyeballs” to better position the telecom (and advertisers) for next-generation 5G mobile technology.

“We’re going to completely change the way people view sports,” McAdam said.

NBA commissioner Adam Silver said the live-game experience for fans continues to evolve, with younger viewers increasingly consuming content on mobile devices.

Indeed, the agreement includes a $25 million joint fund to underwrite interactive 5G products centered around the end-user.

“If we want a pick-up game with five people in five different cities and do slam-dunk contests, you’ll be able to do it like you’re sitting together on the same court,” McAdam said.