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April 20, 2016

Live Sports Impact on Cord Cutting

There is one type of programming that has proven immune to cord-cutting trends: sports broadcasting.

Over the past decade, the rise of digital video recorders and streaming services such as Netflix and Hulu has changed the way people consume TV content. As time-shifting and binge-watching have become more and more popular, people often record their favorite shows. When watching the recorded versions, they will often fast forward through the advertisements to save time. Some people even wait months after the original broadcast to catch up on an episode. This means that paid advertising slots during regular TV shows have a declining return on investment.

However, there is one type of programming that has proven immune to these trends; sports broadcasting. While some die-hard sports fans may DVR games while attending family gatherings or social commitments, most of them will agree that watching a recorded game just isn’t the same. This means that people are forced to watch the commercials during sporting events. Data published by Nielsen illustrates sports programming’s relative rise in relevance. In 2005, sports programs accounted for 14 percent of the Top 100 live TV programs in the United States. Last year, that figure rose to 93 percent.

According to Nielsen’s Year In Sports Media Report 2015, the amount of sports programming available to the viewer has increased exponentially. In 2015, more than 127,000 hours of sports programming were available on broadcast and cable TV (+160% since 2005), and viewers spent more than 31 billion hours watching sports (+41% since 2005).

 

Some sporting events have huge ratings that a general TV show could only dream of reaching.

The FIFA World Cup draws an average cumulative TV audience of 3.5 billion every four years

This past Super Bowl generated the 3rd largest TV audience in history with $111.9 Million viewers

The UEFA Champions League has an annual global TV audience of $1.7 Billion

 

TV networks pay large amounts to air these events, per lastwordonsports.com, which in turn increases the total cost to the advertiser to promote a product.

- The NFL recently signed an 8 year TV deal worth $39.6 Billion

- Next season the NBA will begin a 8 year TV deal work $24 Billion

- In 2014 the MLB signed an 8 year TV deal worth $12.4 Billion

 

It remains to be seen how much longer sports fans will tolerate the rising fees for levels of their TV service. With Sling TV offering ESPN as part of its streaming TV service for $20/month, and various other streaming packages available, it’s only a matter of time before sports fans consider alternative viewing options. The NFL recently announced that it has selected Twitter as its exclusive partner to deliver a live OTT digital stream of Thursday Night Football to a global audience across devices and for free during the course of the 2016 NFL Regular Season.

While the cord is not completely cut as of yet, it is definitely shaved!