Live sport, always in the driver’s seat

Recent reports highlight the importance of live sport to drive subscription growth for top VOD content platforms. From Apple TV+ and Paramount+ to Netflix, here’s what the world of streaming is up to.

It was fairly predicted that sport was to be ‘next big arena’ for the streaming wars. Live sport has been making the headlines for nearly a decade. Its ‘migration’ to streaming platforms has progressively challenged traditional pay TV and cable services, de facto modifying the classic patterns of management for content rights, as well as consumption habits. Looking at the latest insight drawn from periodical consumer research provided by Kantar (‘Entertainment on Demand’ report), the drift to streaming has become even more aggressive.

Cable and pay TV household penetration dropped from 44% in Q3 2022 to 40% today (in the US). And should this not be a significant enough figure, the latest Kantar report also highlights that the highest ever percentage (19%) of new streaming sign-ups have recently been driven by new and expanded sports catalogues. Has the premium sports TV package simply moved online?

All four major streaming services (Netflix, Disney+, Paramount+, and Apple TV+) achieved strong subscriber growth in the July-September 2023 period. However, whereas Netflix continues to be a dominant force, Apple TV+ and Paramount+ claimed for the first time the two top spots for share of new paid subscribers to their audiences. Adding sports content to the respective offerings, stated the report, has proven integral to business success for both in the US market.

Back in 2022, Apple agreed with the Major League Soccer (MLS) to a 10-year broadcast agreement reportedly valued $2.5 billion, covering the entire offering of soccer games per season, to be distributed across the Apple TV+ app. The new live sport offering was combined with a new litter of successful original shows (namely Yellowstone, Ted Lasso), so it comes as no surprise that Apple TV+ now ranks only second to Netflix in terms of subscriber satisfaction with the quality of content  it showcases. Paramount+ benefited from the return of its NFL coverage, through CBS live programming.

Is Netflix looking at live sport too? Yes, ish.

Despite growing speculations about Netflix’s involvement in live sporting events to be hosted on the popular VOD platform, the Los Gatos-based media company has focused on other sides of its business. The implementation of an ad-focused tier as a monetisation model being one. Content remains central, and the past few years helped to cast a positive light on Netflix’s interest in sports-relevant docuseries (The Last Dance, Formula 1: Drive to Survive, Break Point, Full Swing, or the most recent Beckham).

A landscape image showing the official artwork for the Netflix event 'Netflix Cup', representing the first live sporting event shown in real time on the famous VOD streaming platform

On the back of the acclaim won for the productions mentioned above, Netflix announced its first-ever live sports event for Autumn 2023. The golf event ‘Netflix Cup’ is set to take place as Formula 1 drivers approach the return of an F1 Grand Prix in Las Vegas for the first time since 1982. Selected drivers and golfers were paired up to compete in a match play tournament at Wynn Golf Club at Wynn Las Vegas, and distributed live to US customers while showcasing two of the company’s sports programming breakouts (Formula 1: Drive to Survive, and Full Swing).

Will this event pave the way to a more aggressive strategy for penetration in the live sports sector? Possibly, even though it’s still difficult to predict when and how Netflix will be attacking the TV rights market to secure new content properties.

What about the UK?  

Live sport remains a key focus for the UK customers, as highlighted by our ‘Consumers in the modern age’ playbook, published in September. The beginning of the 2023/24 sports season marked some changes in the landscape of televised sport in the country, with BT Sport fully rebranded into TNT Sports following the acquisition of BT's sports broadcast brand by Warner Bros. Discovery.

Our report highlighted that 21% of the UK audience surveyed (a sample of 300 people of all genders, aged 18-65) prefers to watch live events when consuming content. The figure is higher when looking at younger demographics, certainly willing to spend more time in front of a screen while watching live sports (as well as music or entertainment-based programming).

More than half of the UK-based audience interviewed believe that a fair price for a live sports content platform should remain capped between £5 and £9.99. The reluctance to pay more for a subscription to streaming platforms providing live sports is reflected by the high number of illegal streams available on match-days. Content bundling and aggregation of different services – with cost-efficiency in mind both for the operators and the end-users – go hand-in-hand with the provision of business models that could include transactional purchases for events, on top of cheaper subscription tiers.

A landscape