Study finds that sport is king among live streamers

0
26

Events streamed live on the Internet are becoming increasingly popular among Internet households, especially live sports, according to a study released by Parks Associates

The report “Livestreaming: The Next Hot Video Market” indicates that more than 40% of US Internet households have streamed content in the past three months. More than three in five households (61%) watched a streaming sporting event.

The survey also found that live-streaming consumers spend about half of their online video time watching live events.

“Traditionally, live sports programming has performed well,” noted Parks Contributing Analyst Eric Sorensen, Sr.

“However, the pre-event and post-event programming doesn’t perform nearly as well in terms of ratings as the actual event itself,” he told TechNewsWorld. “These facts apply to both linear television and live streaming platforms.”

“Sports are popular because they matter when they’re live and much less when they’re watched later,” added Michael Pachter, director of equity research at Wedbush Securities in Los Angeles.

“You don’t care about a baseball game that ended 12-2 or a football game that ended 49-14, and there’s no point in watching a replay,” he told TechNewsWorld. “Some lopsided wins might have value if records were broken — Brady’s 500th touchdown or a no-hitter in baseball — but they’re largely worth a lot less in hindsight.”

Hunting for eyeballs

Sorensen explained that live sports programs are migrating to online platforms as more rights become available.

“Numerous streaming providers continue to outbid each other for coveted sports media rights,” he said. “Sports consumers don’t want to miss out on ‘water cooler’ moments with their favorite sports teams.”

Professional sports leagues don’t want the fans to miss those moments either. “The leagues want to be where their viewers are and today it’s online,” said Michael Goodman, director of digital media strategies at Strategy analysisa global research, consultancy and analysis company.

ADVERTISEMENT

“Streaming gives them additional revenue streams,” he told TechNewsWorld. “Amazon pays a huge amount of money for Thursday Night Football. Streaming is also driving up rights fees because there are new competitors for it.”

Michael Inouye, Chief Analyst at ABI researchnoted that sports have always been the biggest driver for live streaming due to the nature of its programming, audience size and market potential.

“One issue with live streaming was latency,” he told TechNewsWorld. “OTT [over-the-top] services have lagged considerably behind the live broadcasts in the past. A typical live broadcast is six to eight seconds behind a live event, while live streaming is 30 to 45 seconds or more behind.”

“Now we’re seeing more live streaming at the same broadcast levels — less than 10 seconds — so this also makes this kind of programming more equitable with traditional broadcast channels,” he said.

Edge on Netflix

Inouye noted that live sports streaming is growing as more viewers cut the pay-TV cord. “Securing distribution rights is the biggest hurdle, but more and more streaming is often part of new deals and negotiations and as direct to consumers continues to grow, we will see more content going through streaming channels,” he continued.

“The strong growth of video advertising in streaming markets is also an important driver for bringing sports and other live streaming content to a wider audience,” he added. “It’s still not at traditional broadcast levels, but at least it’s now seen as an important additional channel.”

Some online platforms see live streaming as a way to get a leg up on the market, noted Neil Macker, a stock analyst at Morningstar. “Live streaming is something that companies competing with Netflix have added to packages not only here in the United States, but internationally to differentiate themselves,” he told TechNewsWorld.

Those moves by its competitors may not be long ignored by Netflix, which is reportedly mulling over a live streaming strategy.

“Streaming is getting more attention from Netflix because it’s hard to compete with companies with massive intellectual property wealth, like Disney and Warner Bros. It could be a way to diversify a bit,” said Ross Rubin, the principal analyst at Reticle Investigationa consumer technology consultancy in New York City.

“It’s also interesting, given the recent discussion about Netflix opening an ad tier, that live events — especially news and sports — tend to be associated with ads,” he told TechNewsWorld.

“However, it remains to be seen how much investment live streaming will receive as Netflix looks to cut spending and be more fiscally conservative,” he added.

An important opportunity

Sorensen noted that with Live TV, Amazon Prime Video and Disney+, Hulu are key providers now offering live streaming services that test Netflix’s leadership position in the OTT ecosystem.

He insisted that offering live streaming content is not only an opportunity for Netflix to acquire new subscribers, but also to retain existing subscribers. “Sixty-four percent of Netflix subscribers currently stream content on other services,” he explains. “Live streaming allows Netflix to stay involved with its service for longer.”

“This is especially important in light of Netflix’s recent revenue call, which expressed the expectation that they will lose millions of subscribers by 2022,” he said. “There are several opportunities for a service like Netflix to offer egaming, esports and red carpet premiere events as live streaming entertainment in addition to sports and news.”

ADVERTISEMENT

“Netflix appears to be suffering from higher costs and lower viewership due to increased competition and changes in behavior as people leave their homes.” added Charles King, principal analyst, with: Pund-ITa technology consulting firm in Hayward, California.

“Live streaming of popular events can help the company bolster its fortunes,” he told TechNewsWorld.

Not for Netflix

Pachter claimed that Netflix would fail miserably at live streaming.

“Live streaming is by appointment and Netflix is ​​on-demand,” he explained. “The customers will never associate it with events being watched live, and I think it will abandon the idea after it gets on and fails.”

“Netflix grabs straws. The brand is not built around live streaming,” added Mark N. Vena, president and principal analyst at SmartTechResearch in San Jose, California.

“I think a lot of the mistakes Netflix is ​​making are self-bent wounds,” he told TechNewsWorld. “Live streaming isn’t going to help them get out of their swamp.”

“The amount of content the average consumer has access to is overwhelming, but Netflix is ​​acting like it’s 2010, not 2022,” he said. “The amount of content available to users is exponentially higher than it was 10 to 12 years ago, when Netflix didn’t have much competition.”

“Now they have a lot of competition,” he continued. “They won’t be able to livestream themselves out of that situation.”