The novel coronavirus 🦠 has put the world of sports on ⏸ pause—and the business of sports in turmoil. Top-tier sports leagues around the world prepare to resume playing in order to unlock or retain media rights revenues by fulfilling their commitments to the 🎥 broadcasting partners. While the future of many teams will hinge on the next rights fee installment being paid or not clawed back by successfully staging any remaining games ✅, the sports media market itself seems to be due for a fundamental reset:
Supercharged by the global COVID-19 pandemic, both the penetration as well as the profitability of traditional pay-TV erode. Market incumbents 📺 are expected to recalibrate investment and editorial resources on strategically important, needle-moving T❶-assets which continue to be able to drive higher-margin subscriptions of bundled services. New OTT challengers 📱 will be forced to cut costs to preserve cash: T❷-assets, often the crown jewels of pure-sports streamers, have experienced skyrocketing, but unsustainable growth in rights fees recently and could experience a significant correction in market value as a result.
The reality for rights holders, and by implication for rights owners, is that the 👎🏻 future (“Over-the-Top, Direct-to-Consumer & A-la-Carte Options”) will not be as lucrative as the 👍🏼 past (“Satellite / Cable Pay-TV, Business-to-Consumer & Bundled Services”) of sports media:
I do expect a ↕️ polarisation in the market value of rights, with increased relevance of must-have, tentpole content and a decline in overall spending on rights acquisitions caused by industry-wide cost-cutting. On the other hand, increased urgency for a 💡 more innovative (and profitable) exploitation of rights could provide a counter-force against any market reset: The current industry standard of "all-you-can-eat" pure-sports subscriptions certainly does not maximize market welfare and offer untapped potential to increase the intrinsic value of rights by re-thinking the current form of exploitation.
Along the way, I tackle the following topics:
- MARKET IN TURMOIL: INCUMBENTS RE-FOCUSING ON T-1 ASSETS 📉
- BUNDLING AS MEASURE OF DOMINANCE AMONG RIGHTS HOLDERS 🖇
- MARKET IN TURMOIL: PURE-SPORTS STREAMER'S COST-CUTTING ✂️
- OTT ECONOMICS NOT WARRANTING CURRENT LEVEL OF RIGHTS FEES 📱
- RE-THINKING THE MULTI-SPORTS SUBSCRIPTION 🤓
- VERTICAL PACKAGING: MICRO-TRANSACTIONS AND CUSTOMIZED SUBS 🔁
- EXTRA: IMPACT OF COVID-19 AS AN ACCELERANT 🦠
- DIRECT CONSUMER MONETIZATION ONLY A PART OF THE CHESSBOARD ♟
