New Regions = New Revenue for Sports

New Regions = New Revenue for Sports

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New Regions = New Revenue for Sports

Journal Article by Cerberus Tech

Tue 03, 01 2023

Chris Clarke, CEO, Cerberus Tech

Some sports are undoubtedly global leaders, with an audience to match. Then there are others, which enjoy immense popularity in certain markets but are less well known elsewhere. Ice Hockey, for instance, is a national obsession in Canada but is still relatively niche in the UK. Rugby has an estimated global following of 475 million people, but its popularity tends to be concentrated in specific regions. When it comes to building up a dedicated audience in new markets, there are several challenges that need to be overcome.


Popularity with viewers is often tied to circumstances beyond the individual dynamics of the game. It can be impacted by both cultural and historical factors, as well as the level of investment in youth teams, and the ongoing commitment from broadcasters in that market. Often clubs and federations have a hard time securing buy-in from broadcasters, so a ‘chicken and egg’ scenario ensues. How can you prove the potential of a sport if you can’t reach your audience in the first place?


Until recently, broadcasters had their hands tied by the prohibitive cost of experimenting with sports that were less familiar locally. The financial resources required for traditional delivery methods meant only offering content which had been historically popular in that region. But without experimentation and fresh formats, live sport is at risk of falling into a stagnating business model. A recent Altman Solon study found that “UK sports fans are watching more sports since the pandemic” but highlighted an increase in demand for women’s sport, and that audiences are opting for highlights over full matches. To stay ahead, broadcasters need to match their strategies to content consumption preferences and engage a sports fanbase that is constantly evolving.


Optimising Contribution and Distribution


Historically, broadcasting live sports events has been extremely costly, particularly if distributing feeds to multiple regions. It is generally straightforward for takers in the same region to pick-up feeds, but when distributing further afield, additional costs can make exploring new markets prohibitive. If satellite is the only method of delivery, it limits the content owner’s ability to expand and the broadcaster’s ability to experiment.


Traditional transport of live sports requires significant physical resources and infrastructure. Tower access, satellite uplinks and downlinks, or fibre circuit charges all fall under a downstream cost profile that negatively impacts the taker. In some instances, this can overtake the cost of securing the broadcast rights in the first place. Generally, only tier-one sports offer the guaranteed ROI for expansion into a new market, and it has been difficult for lower tier or niche sports to deliver to new audiences and increase revenue. Of course this varies by region: what is tier one content in one territory, won’t necessarily be considered high-value in another.


However, in recent years, technological developments in sports content delivery have made it easier for rights owners to reach takers in new markets. Using broadcast-grade IP tools for content delivery combines the protection of encoded feeds with the flexibility of the cloud. Broadcast IP can adapt to a variety of use cases, from an extremely cost-effective back-up feed, to improving the ability to localise content with multiple feeds tailored to a specific market. This helps takers move beyond a generic world feed, towards a content delivery model that adapts and scales to the needs of the audience within their region. It also brings with it the ability to make changes at the eleventh hour without incurring huge costs. This, alongside the option to respond quickly to unforeseen circumstances such as unexpected last-minute rights acquisitions, makes for a strong business case.


Freedom to diversify and expand


The fact that transporting content to regions where a sport has a relatively small following is cost prohibitive, makes it really difficult to reach new audiences - hence, the chicken and egg scenario. Equally, delivering any content that is supplementary to the main sporting fixture is also not worthwhile, because the relatively low value of the content does not justify the associated high transport costs. This means that audiences who prefer more short form content are not being catered for, so they are not engaging when perhaps they would otherwise. If distribution costs are a barrier to growing the popularity of smaller and more niche sports and expanding popular sports in new regions, it makes sense to complement traditional distribution with additional lower-cost methods.


If it is possible to reduce the costs associated with content distribution, then many more opportunities arise for diversifying sport. This applies to the types of sports being covered around the globe and also to the type of content being distributed. Reducing the cost of transporting content makes it possible to package up and deliver supplementarily content, such as content captured before, after and around the main event. Having additional content that can be broadcast in different formats, such as in bite size chunks, as opposed to long-form, can also help appeal to a wider audience.


Content owners need to have both the flexibility and freedom to choose the most appropriate distribution method for a particular set of circumstances. In a situation where popular sports are picked up by multiple takers in the same region, then it makes sense to use satellite. However, to deliver that same content to a region where that sport has yet to grow a solid following, it makes sense to use broadcast-grade IP. Supplementary content around the main event can then also be delivered in both cases using broadcast-grade IP. This would enable takers in the two regions to distribute the content that they think would appeal most to local audiences.


Adding broadcast-grade IP workflows complements satellite and creates opportunities for distributing more varied content to a wider audience. Having this added flexibility also gives content owners the chance to adapt quickly, as business needs require. A wider variety of professional sports are broadcast today, but there is still more to do. As the types of sports that people are engaging with continue to grow and diversify, content owners and broadcasters need to ensure they are delivering the content that piques their interest. This enables rights holders to increase the exposure and visibility of sports, which in turn improves engagement with global audiences.

The future of sport is diverse, global, and focused on revenue growth. Cloud-based delivery will help facilitate a new sports renaissance, meaning more content variety can be distributed without compromise.

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