The State of Live Streaming 2023

2022 was the year in which sports, the appointment-to-view genre with massive audiences and revenues, moved to the center of major streaming provider strategies. Headlines tell the story: “Live Sports on Streaming Is the Newest and Most Expensive Entertainment Battleground,” screamed IndieWire; “Sports Rights: The New Battleground in the Streaming Wars,” yelled Broadcast. Ampere analyst Minal Modha titled her article “Why Sport Could Be the Next Battleground in the US Streaming Wars”; Streaming Media published “Live Sports Are Headed to Streaming Services, and Audiences Are Ready.”

Got the message? Live sports have been slower than premium drama and film programming to move to the internet and for good reason (technically, things are still not sorted), but the deals are stacking up as fans get more comfortable with viewing their favorite teams and athletes online.

Perhaps the most significant deal is Amazon’s exclusive rights to Thursday Night Football (TNF) games for US$1 billion a year through 2033. It’s the first time that the NFL—owner of the most valuable sports property on the planet—has offered a package exclusive to streaming.

The second significant OTT deal is Apple’s 10-year US$2.5 billion Major League Soccer (MLS) package. Beginning in 2023, it will put every one of the league’s games on a new MLS service. This is important because of its total shutout of traditional channels, and analysts as well as major sports league boards will be eyeing its momentum.

All of this could mean that live will account for the leading share of a US$750 billion total video streaming haul by 2031, estimates Future Market Insights (FMI).

Live sports are proven to deliver eyeballs, and rights keep on rising. The most eye-catching in this regard was ESPN’s renewal of rights for Formula 1 (F1) in a 3-year deal to 2025 for US$75–US$90 million a year. That’s a titanic leap from the US$5 million ESPN is currently paying. This raise is attributed to the growth of the sport that owner Liberty Media has generated in the United States, itself powered by the popularity of the Netflix series Formula 1: Drive to Survive and competitive bids from Netflix and Amazon.

With major leagues in the box seats, sports are finding buyers with deep pockets in Silicon Valley. As The Wall Street Journal reported, DirecTV was losing US­$500 million a year after paying US$1.5 billion a year for the rights to NFL Sunday Ticket in a deal to 2023 that it won’t renew. Those rights instead will likely head to streaming, with Apple and YouTube the frontrunners, according to Forbes.

With business models that do not rely on entertainment except as a means to drive purchase of its other product and services, Apple and Amazon can afford to use sports as a loss leader.

In summer 2022, Apple began streaming Friday night MLB games on Apple TV+ as part of a pact worth a reported US$595 million over 7 years. Amazon’s investment in sports includes broadcasting 21 New York Yankees games in the 2023 season. (It also has a stake in the Yankees’ YES Network.) Outside the States, Amazon holds a selection of English Premier League (EPL) rights to stream in the UK; from 2024–2025, it will also broadcast UEFA Champions League, Europe’s top football tournament.

This is not to say that everything is tilting right now in favor of OTT. While that remains the long-term forecast, in the mid-term, linear TV is where the vast bulk of the value and the audience for live sport remains.

The NFL’s US$113 billion deal through 2033—an 80% premium over the current and expiring deals—is testament to this, since the most games will be screened on traditional broadcast channels. Disney, Fox, Viacom, and NBCUniversal (NBCU) will give the lion’s share of their NFL games to TV, simulcast others (ESPN’s Monday Night Football package can also stream on ESPN+), and send some games exclusively to respective OTT platforms (e.g., ESPN+ and Peacock).

The NFL itself is having its cake and eating it too. The deal with Amazon calls for TNF to be sub-licensed to a free-to-air linear partner in the home market of the teams that are playing. Meanwhile, its US$5-a-month, mobile-focussed service, NFL+, launched this past season, is expected to complement—rather than cannibalize—existing partners’ distribution plans. It is also a chance for the league to build its own prowess in DTC streaming with an eye to the future.

The same split—and rise in sports rights value—is evident at the college sports level. The Big Ten Conference deal (worth US$8 billion over the next 7 years) will see games mostly divided by Fox, CBS, and NBC across their linear TV and streaming services.

“In a way, the distinction between broadcasters and streamers is becoming increasingly artificial as broadcasters use their in-house streaming platforms to host rights,” says Minal Modha, consumer research lead at Ampere. “For example, NBC started a new ten-year, US$7.75 billion deal to show the Olympics in 2022, and then distributed the Beijing Winter Olympics both across its linear channels available on cable and satellite products and via Peacock.”

ESPN’s F1 deal is another example in which most races will be carried on ABC or ESPN with a few shown exclusively on ESPN+.

There’s also a structural and consumer behavioral reason for the major sports leagues to be engaging with streaming. Nielsen points to the availability of broadband in more than 90% of US homes as providing audiences with ample choice outside of traditional TV options.

Sports fans also account for nearly 40% of US in­ternet users, according to Ampere. It’s a group which readily engages with subscription services, over-indexing against the average for household access to SVOD, pay TV, and premium channels. They’re also affluent. More than 20% have household incomes of more than US$100,000 per year, making them a particularly attractive target for subscription services.

“[T]his isn’t just about tapping into a high-value potential customer base, but also reacting to changing viewing preferences among different demographics,” says Modha. “With the US being arguably the most advanced streaming market in the world, it’s unsurprising that viewing preferences there lean towards OTT platforms.”

Ampere data shows that more than one-third of US sport fans now primarily want to watch live sports via an online streaming service, and they are 32% more likely than the global average to want this option. According to Nielsen Fan Insights, 80% of sports fans, 76% of NFL fans, and 89% of football/soccer fans regularly or sometimes watched sports on any streaming or online channel in 2022.

Deirdre Thomas, managing director of audience measurement at Nielsen, says such trends illustrate “how comfortable fans are in accessing sports content without traditional broadcast and cable access.”

Encouragingly for streamers, Thomas notes, “audiences appear far more engaged with streaming NFL games on Amazon than they are with watching them on premium cable. Nielsen TV viewership data shows that the first three TNF games on Amazon Prime Video this year [2022] attracted significantly more viewers (13 million, 11 million, and 11.7 million, respectively) than each of the seven Thursday games last year [2021] that aired only on the NFL Network.”

Evidence outside of the US for this trend can be found at Discovery, where its digital coverage of the Beijing Winter Games in February 2022 hit more than 1 billion streaming consumption minutes in Europe. That represented 19 times more streaming minutes consumed compared to the 2018 Winter Olympics, attracting more than 156 million people. Discovery+ also drove an increased number of new paid streaming subscribers, the total of which exceeded PyeongChang 2018 by almost 50%.

In addition, “ESPN’s contract with the NBA ends with the 2024–25 season. It was signed back in 2014—eons ago in the media landscape,” notes IndieWire, “making basketball broadcasts the next streaming target.”

“In 2023 we’ll see whether these streaming giants decide to go big or go home,” says Julien Signes, SVP and GM of video network at Synamedia. “Sports streaming at scale is not for the faint-hearted, and achieving profitability is no mean feat given the cost of sports rights. Although on paper it sounds like a challenge suited for big streamers with deep pockets, they really don’t like its territory-by-territory model.”

Technical Glitches When Streaming at Scale

If streaming really wants to unseat linear as the favored way of watching sports, then its technical infrastructure needs to be water-tight, and that is still not always the case. Even Amazon couldn’t prevent frustrating viewers with poor video quality and buffering on the occasion of its TNF debut.

Many viewers noted the disappointing picture quality, regular freezing, and choppy feed when the NFL’s San Diego Chargers played the Kansas City Chiefs, according to a report in SportsPro. Cable customers also took the chance to again complain about having to sign up for Amazon Prime to watch TNF.

To compound issues for the NFL, users trying to add NFL RedZone via YouTube TV’s Sports Plus package received error messages, while the new NFL+ service had usability issues, including fast-forward malfunctions. As Alex Perry writes in a Mashable review, “thanks to performance problems, the product as it exists right now just isn’t up to par with what you’d expect from the NFL’s first foray into the streaming business.”

Perry’s chief complaint is a frame rate “seemingly capped at 30 frames per second, which is half of what you would get out of a genuine TV broadcast of any sports game.” He compared this unfavorably to Amazon’s TNF “broadcast at a smooth 60fps and a sharp 1080p, loading up quickly within the Prime Video app without much buffering or stuttering at all. You can pull up stats while watching the game, and those will even update in real time.”

A critical technology for streaming at scale will be the emergence of dynamic CDN experiences with the instant elasticity needed to support millions of users switching on at the same time to view a top sporting event, whilst optimising the delivery for each users’ exact application, bandwidth, and device.

The drive for this instant elasticity comes down to managing scale, quality, and costs. For example, supporting the 5% of NFL viewers who want to place a bet means provisioning ultra-low latency for those users only in order to manage costs.

“A dynamic CDN takes end users’ requirements, their locations, devices, and time zones into consideration when delivering video streams on the fly,” says Signes. “It can adapt to unpredictable network, infrastructure, and audiences, and automatically scale cloud resources up and down, while maintaining quality of experience."

Betting on the Sportsbook

Although sports streamer FuboTV shuttered its online sports wagering business in October 2022, the odds are firmly with the sportsbook being opened wider across sports in concert with live streaming the game. The global sports betting market is expected to reach US$114.4 billion by 2028, which is a whopping 86% growth over 2021, driven by the increasing popularity of online and mobile betting and the relaxation of laws permitting sports gambling in the US. Another analyst charts the glo­bal market attaining US$182 billion by 2030. The low latency of 5G combined with ATSC 3.0 could be a great enabler of sports betting.

Media companies with a large sports streaming presence have either already integrated sports betting into their platforms or are exploring ways to do so with betting operators. NBCU offered betting on Peacock during the PGA Tour in Jan­uary 2022. In September 2022, NBC teamed with BetMGM, LLC to produce and deliver gambling and fantasy content on NBC’s Football Night in America pregame show and across NBC Sports broadcasts on Peacock.

Also around the new NFL season (and the first in a new set of rights for the league running until 2033) is Amazon’s pact with DraftKings and TNF. This contains DraftKings integrations in the live pregame, including odds. Betting giant FanDuel launched its gambling-focussed cable channel (FanDuel TV) and streaming service (FanDuel+) in some US states, available on YouTube TV, Hulu, Roku, Apple TV, and Amazon Fire.

The most anticipated entrant is Disney, which is reportedly looking to licence the ESPN brand to gambling operators for US$3 billion over several years. That partner is likely DraftKings, a company in which Disney holds a stake from its 2019 acquisition of 21st Century Fox.

ESPN chairman Jimmy Pitaro told Bloomberg that the sports media giant wants to “eliminate friction” for bettors, adding that sports fans crave “the ability to actually place bets in a seamless fashion from their online digital sports experiences.”

In a September interview with Bloomberg, Disney CEO Bob Chapek confirms this thinking. “Sports betting is a part of what our younger, say, under-35 sports audience, is telling us they want as part of their sports lifestyle.”

This heated new revenue stream is less intense outside the US, where regulations remain tighter. “Betting is treated with mixed feeling in a number of countries,” says Sanjay Duda, COO of Planetcast International. “In India, for example, there are severe limitations to public betting. However, rightsholders are finding adjacent engagements such as fantasy sporting and skill-based gaming, where points are linked to performances or game outcomes.”

The necessary technical component for integrating betting with the live game is synchronized ultra-low latency. Get that wrong, and legal issues could mount as well.

However, the cost of implementation may outweigh any direct benefit, particularly for large-scale events. “If, say, the Super Bowl, streamed in [ultra-low latency] to everyone, the internet wouldn’t cope,” suggests Chris Wilson, director of market development for sports, at MediaKind. “Even if there were enough silicon in the world to do it, the cost would be prohibitive.”

Rightsholders could enable ultra-low latency for a limited number of paying customers, while keeping the main feed to the broadcast-standard 6-second delay.

“This would control cost and unlock a different tier of engagement, but to get there you’d have to pay, and this would be part of the commercial strategy of the platform,” Wilson explains.

Metaverse and Web3 Video Offer New Channels

Rightsholders are starting to explore live events in the metaverse, although this remains more a marketing placeholder than anything substantially different from current digital activations.

At the end of 2022, Warner Bros. Discovery Sports (WBDS) previewed what it calls a “metaverse experience” around the London leg of the UCI Track Champions League. Among other things, this included greater chances for fans to interact live with athletes, but execs admitted this is very much an exploratory and brand-positioning phase intended to onboard Gen Z.

In a November 2022 IBC article (“UCI and WWE Bring the Metaverse and Web3 Video Into Mainstream Sports”), Scott Young, SVP of content and production at WBDS, acknowledges, “The metaverse is a bit of a confusing reference at the moment but as soon as people start to see what we’ve developed you will see it allows a very different touch point for the sport. It is saying, you can create your own avatar [and] we will deliver you all the content and give you the ability to navigate and access it as you wish.”

By contrast, he calls conventional streaming “very two-dimensional. Fans stay longer with [interactivity] and tend to return more often to it than to a dot-com platform. …”

WBDS used the term “Web3” in its press around this event but didn’t specify what this meant. The metaverse is arguably being built using elements of Web3 tech like blockchain and decentralized methods of organising data and ownership.

Eluvio is at the forefront of a potentially more far-reaching Web3 development as it helps sports (and entertainment) rightsholders unlock new revenue. This began with non-fungible tokens (NFTs) and is now moving into tokenized video. WWE Moonsault, created by Blockchain Creative Labs (formed by FOX Entertainment and Bento Box Entertainment), runs on the Eluvio Content Blockchain and, as Eluvio CEO and co-founder Michelle Munson explains in the previously mentioned article, provides NFTs “that transform from digital images into exclusive video of specific highlights.”

Although based on a video archive, distributing a live event itself on the blockchain is the next step. In autumn 2022, Eluvio partnered with an (unnamed) sports organization in Australia in a live-streamed pilot. This would potentially cut traditional third-party licensees like broadcasters and streaming service providers out of the value chain.

“We can harness this technology to make a new way for publishers, creators, and for fans to be around media and to disintermediate value extraction,” Munson confirms.

The Price of Piracy

Monthly bills for legitimate services providing all major sports and entertainment are rising. In the UK, Synamedia say it’s reached £150 per month, excluding the cost of broadband. Synamedia say that’s why consumers are heading to free or cheaper pirate services.

In research conducted with pirate consumers, Ampere Analysis identified the scale of the problem, with 84% of those surveyed watching sport illegally. Of the pirate viewers, 89% also have a legitimate pay TV service and 44% have a legal sports streaming service, demonstrating that they’re prepared to pay for media and sports media within their means.

“This can only mean one thing in 2023, an increase in the consumption of pirate services,” says Simon Brydon, senior director of security business development at Synamedia. “Streaming technology makes it simple and cheap to steal, aggregate, sell, and deliver content illegally, rubbing salt into the wounds of broadcasters who face spiralling rights costs. For a get-rich-quick criminal enterprise, piracy is a winning business model and requires no technical know-how. The super-aggregated illegal pirate service offers premium sport and entertainment content at a price point that no legal service could ever come close to rivalling.”

The Rise of 8K and the Augmented Experience

The FIFA World Cup was one of an increasing number of premium sporting events being streamed in 4K (+ HDR in the case of BBC iPlayer), but trade-offs between network congestion and video quality remain a barrier to wider adoption.

Extreme personalization is in demand. Amazon Prime debuted TNF with X-Ray statistics, Alexa integration, and a simulcast of commentary from YouTube sports and comedy group Dude Perfect. Other areas of personalization include targeted advertising using DAI, choice of commentary, or multicam toggling.

Several sport streamers are tentatively exploring 8K as a service differentiator or additional revenue stream. BT Sport has trialled 8K broadcast, and the 2022 Winter Games featured 8K VR. For better visual quality, VR headsets need higher-resolution screens, and the source feed would ideally be culled from 16K (as was claimed by the producers of the Beijing Olympics VR experience).

From its discussions with operators, Synamedia reports high expectations around 8K over the next 12–24 months, possibly driven by big-screen fan zone experiences.

“The fan event experience is about to get an overhaul,” says Signes. “Imagine a $100 match ticket has a QR code with an offer to download an app to use in-stadium with a bunch of fun features such as watching the game from a different part of the stadium, replaying a tackle, keeping an eye on a [rival’s] match, or placing a bet. Meanwhile, F1 fans could view the track from a drone or drop into a car for the driver’s view.”

The infrastructure needed includes 5G, Wi-Fi, CDN with Web­RTC support, and support for multiple latencies within a streaming service. “The augmented fan viewing experience and 8K will also underpin the metaverse as sports brands start experimenting there,” he adds.

UHD also includes parameters such as HDR, higher frame rate (HFR), and immersive audio that have a strong impact on user experience. Any of these shifts becomes a largely economic decision to budget for increased bandwidth.

“Arguably, higher frame rate is more important for sports than 8K,” says Wilson. “But to make 120fps viable, you’d essentially have to rip out the entire production infrastructure and replace it because nothing will support that today. Maybe 8K HFR supported by AI/ML will be able to create that extra uplift for the viewer.”

The State of Live Sports Streaming 2024

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04 Apr 2024