Sports fans have gone all in on streaming. In the US 80% of US Sports fans watched some sports online in 2022.
According to a recent YouGov survey 67% of global consumers engage with sports monthly and 30% of those fans have subscribed to a streaming platform to get access to sport.
Streaming has also changed how and when people watch video. Subscription based video on demand (SVOD), and video viewing on social networks, has had a significant impact on scheduled TV. Around a billion consumers globally between them consume three hours a day of video on demand and videos on TikTok and Youtube. The number of subscribers to SVOD services will almost triple from 668 million subscribers by the end of 2023 to 1.79 billion by 2029. Youtube already has 2.7bn users.
Viewing figures across traditional media platforms and live viewing figures have been squeezed. However live sport remains appointment to view and has, more than any other content format, bucked the trend of time shifted viewing. In the US, the worlds’ most lucrative market for sport, sports programming accounted for 94 of the top 100 most watched telecasts in 2022 – or 33 of the top 50 telecasts if the NFL is excluded. And of course sport is compelling subject matter for SVOD treatment. Netflix has 55 original sports documentaries available in the US alone including the much heralded “Drive to Survive”.
Changing consumption habits, a proliferation of distribution channels and the persistent relevance of live sport suggests a significant opportunity for sports rights holders, especially sports rights holders without a broadcast partner, to stream events via OTT. But the real question is – how many fans will sign up, and how many will pay?
the real question is – how many fans will sign up, and how many will pay?
Let’s look at the actual numbers. At Generate Digital, we have a lot of numbers.
Imagine we were looking to convert regular season fans of the NFL in the US into subscribers to a new streaming service. Put aside the minor matter of this being improbable. The NFL, with (very) kind permission of its broadcast partner family, has permitted us to establish an OTT service to service latent demand. So how many fans are looking to stream NFL games right now?
As of today, December 5th 2023, there are 226m people using Meta (either Instagram or Facebook, deduplicated) in the US and a slightly larger number using Youtube. 86% of Meta users (based on their activity, determined by machine learning) are interested in sports and of those 68% are interested in the NFL. Youtube numbers (which are based on the types of content viewers watch, determined by manual tagging of content topics) are slightly lower with 48% interested in sport and 65% of those interested in the NFL.
This looks like a pretty big pool of fans and roughly equivalent to the numbers that tune in to the Superbowl every year. Many of these fans of course are familiar with the NFL’s mature suite of incumbent broadcast partners who have strong relationships with their viewers and are habituated to watching the NFL on TV or through their preferred partner’s streaming service(s).
Digging further into active demand we see around half this number of fans actively seeking out team and player information around the NFL at the start of this season. Smaller numbers are actively seeking out streams. Fewer still are seeking branded streams – searches with high intent which reference the NFL’s broadcast partners ESPN, NBC, FOX, CBS and Amazon.
Based on active demand the immediate, identifiable, addressable market, at peak, of fans looking to stream NFL regular season games or looking for the NFL’s streaming partners is just over 12.6m fans – a number that, incidentally, has been steady at this point of the season for the past two seasons.
So how many of these fans will convert to our new OTT service, and how quickly?
Assume our route to market as a new entrant is primarily paid digital marketing leaving aside affiliate deals, other marketing partners and aggregators. In Generate Digital’s work on OTT customer acquisition which has covered over 50 sports in over 100 countries we primarily fish in four types of audience pool, subdivided into multiple segments, for new sign ups. These pools are:
- Fans actively seeking a named streaming service – the richest pool
- Fans seeking to stream a specific match, event or league
- Fans who want to watch a particular sport right now (e.g. “football tonight”)
- Fans of the event or league
Our experience is that fans who are actively searching for a stream can be converted on the basis of at least a 1:1 return on investment or better, where the cost of acquisition is less than the gross value of the amount the fans pays for a subscription or a stream. Of course fans who have already engaged with a rights holder’s digital platforms or marketing and lapsed subscribers likewise can be converted cost efficiently.
Other fans can also be converted but generally at a cost which does not provide immediate ROI and must be modelled around long term value. Fans of teams and athletes are the least likely to convert into paying subscribers other than for team-specific streams.
Taking these numbers into a highly simplified conversion model we would expect a probable outcome of a well managed marketing campaign with compelling creative for our paid NFL US based OTT service to be around 1.4m leads in 30 days or 14% of the demand based audience.
A further half a million or more fans could be landed from interest based audiences if we had budgets and ambitions to spend more than we would immediately recoup.
We would expect qualified leads to convert at a rate of anywhere between 4% to 15%. Actual conversion depends on price, timezone, piracy and transaction mechanics.
Clearly these numbers are provided as an example and do not represent all demand for NFL streamed video. But they do show a definitive level of demand from fans who actively want to stream and are looking for a solution right now – one that any of the NFL’s current partners might provide or seek to provide in preference to the others or which the NFL itself might address and direct to its partners’ offers. They also indicate a typical delta between self-declared or behaviour-based fans of a sport and active interest in watching, and paying to watch, streams of that sport.
Generate Digital has five years of data for over 2,500 sports, teams and events down to postal code level in 200 countries
Generate Digital makes this data available to our clients for any sport in any country down to zip code/postal code level and it is the basis of all our work in identifying audiences, modelling and marketing OTT services. We don’t need access to your proprietary data (NFL are nor our client). We can use it to reliably predict how many fans will actually sign up for a newly marketed subscription, and model how long it would take and how much it would cost to convert the majority of economically viable fans. If you want to know what your property could be generating in any territory: get in touch alex@generate-digital.com
We can of course include existing subscribers and first party data in our models and we can calculate the impact of marketing partners and distribution through established networks and aggregators as well as bundling with other sports.
The data also provides a window into a wider pool of fans who may not pay for a stream but would be willing to view other forms of video or branded content.
YouGov claim that 43% of global engaged sports fans and 30% of the general population are interested in sports lifestyle content. The challenge is to engage and monetise audiences across the interest funnel with content that suits their time preferences and aligns with their consistent viewing habits – something we will address in a future update