Audience fragmentation alone understates the fundamental challenge for sports rights holders to not only reach but successfully address heterogeneous market segments:
Reachability and Addressability are different kinds of abilities.
(Cross-)carriage 🔀 and content sharing 🤝 deals between rights holders have created frenemies and a short-term fix for a fragmented (sports) content marketplace. 😌 Nonetheless, it is only a sub-optimal solution for everyone involved because it does not solve for the needs of dispersed audiences and tastes that are increasingly siloed across different market segments with heterogeneous characteristics and consumption preferences. 👨🦰|👩🦳|👨🏽🦳|👩🏻🦱
Rights owners have been the driving force for this development of a fragmented content marketplace by ✂️ slicing and dicing rights packages — with the idea to further boost media rights revenues by accommodating a broader set of media partners with exclusive content for each of them. Instead, it only created just another incentive for consumers to ditch the traditional pay-TV subscription to 💵 free-up a significant portion of their disposable income for re-allocation across other entertainment offerings — many of which have started to provide better value-for-money propositions than sports.
Consumers increasingly left traditional linear (free/paid) TV and have found alternative ways of following sports in a rich ecosystem of sports content: news sites incl. live ticker, social media, fantasy games, video games, or betting services.👨🏼💻
Highlights ⭐ , in particular, have become (near-)substitutes for the traditional way of following sports for an entire generation of new fans and turned previously monetized eyeballs 👀 into non-monetizable consumers. 👥
Where can innovation come from? 🤔 Facing enormous pressure from sky-high rights fees and short-term rights cycles, current rights holders 📺 can only worry about immediate monetization, act risk-averse, and will spend their resources on distribution systems that provide the highest potential and security for immediate monetization: the 🎥 long-form, high-end-produced live broadcast of sports events — either on cable/satellite TV or digital streaming.
Therefore, rights owners must overcome complacency, the innovator's dilemma, and think much more proactively and long-term: putting a broader set of rights-holding media partners 📺 💻 📱, with complementary abilities to reach and address different (siloed) market segments, in the position to generate a positive return on investment with the exploitation of their rights. In this regard, platform-neutrality is protective 🛡️ rather than forward-thinking and mostly demanded by incumbents that lack the abilities to properly address new distribution systems with a fitting product (think: platform-native content presentation) in the first place.
Differentiated content presentation, tailored to the characteristics of different distribution systems (e.g. linear TV, digital streaming, mobile, social media), is key. While traditional post-game HL clips remain retention or top-of-funnel marketing tools (with questionable returns), liveness determines pay-value: Live short-form content 📸 can reinvent distribution models, present incremental product-market(segment)-fit, and has significant pay-value for specific niches.
The topic of cannibalization 🤜🏼🤛🏼 when diluting exclusivity is inevitable but differentiation in content presentation and distribution endpoints will address those concerns effectively. Audiences are increasingly loyal to distribution systems (think: less needle/audience-moving content) and the lack of perfect migration between platforms implies that any distribution system will by definition be supplemental/incremental to the distribution mix going forward. 📺 ➕ 💻 ➕ 📱
