Digital Sports Summit: Great Digital Makes for Great TV Ratings, Not Cannibalization
Networks and rightsholders have often shied away from streaming live sports online and on mobile devices for fear of cannibalizing their prized television ratings. However, that theory is quickly falling by the wayside, as evidenced by a pair of panels at SVG’s fourth-annual Digital Sports Summit on Wednesday that focused on the evolving digital strategies of leagues, teams, and networks.
“There is this notion that putting [live video] on a phone will cannibalize TV, but what we should be much more worried about is that people are not going to watch at all,” said Joe Inzerillo, SVP of multimedia and distribution for MLB Advanced Media (MLBAM). “Ultimately, consumers are going to do what they want to do. If we don’t give them flexibility in watching our [content], they’re going to leave their house and do something else altogether.”
No Cannibal Here
Widespread streaming of high-profile sporting events like the FIFA World Cup (ESPN), NCAA Men’s Basketball Tournament (CBS), US Open tennis (USTA), and the 2008 and 2010 Olympic Games (NBC) has gone a long way in proving the importance of online and mobile to television ratings.
“Great digital makes for better television consumption; this was totally proven by NBC in Vancouver,” said Andre Mika, SVP of creative for NHL. “They were really worried about putting 3,000 hours of the Olympics online. But it actually ended up driving huge numbers to watch television because of the digital piece. This is absolutely hand in hand.”
NBC Sports saw huge ratings for both the 2008 Beijing Games and 2010 Vancouver Games, which were streamed heavily on NBCOlympics.com. Beijing was the most-viewed event in U.S. television history (211 million total viewers, according to Nielsen), and, although NBC reduced live streaming for the Vancouver Games (only hockey and curling were live), the online video content served as a major driver for NBC’s primetime ratings, which were up 20% from the 2006 Turin games and included 27.6 million people tuned in for the U.S.-Canada gold-medal hockey game (the most U.S. hockey viewers in 30 years).
“We certainly make 99% of our money on the TV side, there’s no doubt about that, but cannibalization is just not there,” said Rick Cordella, GM of NBC Sports Digital. “For the most part, I think the philosophy now is that people will go to the best screen available. You’re likely to watch on your mobile phone, your iPad, or your laptop only if a TV is not available to you. So I don’t think that really affects the ratings.”
The Early Days of In-Market Streaming
While streaming live out-of-market sports is off and running, in-market streaming appears to still be in its infancy. Comcast attempted in-market streaming for Comcast customers for the Chicago Bulls (free) and Philadelphia 76ers (paid) last season and failed to attract even 1000 subscribers for each.
“It’s really early in this scene,” says Rich Libero, VP of digital content for Comcast Sports Group. “We did [in-market streaming] more as a test. It is completely at an evolutionary state because we still need to figure out what the value proposition is for our fans. Is it about convenience? What is the rights situation? What platform can we deliver it to? We also have to balance our affiliates and make sure they don’t feel like we’re shorting them. It’s a delicate balance.”
In the final months of the 2009 MLB season, YES Network partnered with MLBAM to begin live in-market streaming of Yankees games to Cablevision, Verizon FiOS, and Blue Ridge Communications customers, attracting 6,000 subscribers. Time Warner Cable joined the party for the 2010 season, and YES seems confident that the service will continue to grow.
“The numbers haven’t been huge, but I certainly wouldn’t say that it has not been a success,” says Michael Spirito, VP of business development and digital media for YES Network. “If you look at MLBAM in their first year doing the rest of the country, it was roughly the same as what we did with the Yankees in our first season. Granted, we are six to seven years further along in terms of broadband penetration, but the business model itself is still evolving.”
Choosing the Right Platform
The number of mobile devices and platforms continues to grow seemingly by the day, and, as a result, sports rightsholders and networks are faced with the conundrum of reaching the largest possible audience while providing a quality video experience.
“You can’t design something for everything out there,” said Mika. “There’s just way too many devices. We try to be surgical in what we do because there’s a significant cost to develop apps that actually work well. If you want to win on a device, you have to actually design a user interface specific for the device that you’re launching on. You can’t build an iPhone app and then spread it across all these other devices.”
Since leagues like the NHL and MLB cannot develop top-notch apps for every platform, they must choose wisely when they decide to invest in one. In an effort to avoid spreading themselves too thin, Mika and Inzerillo focus on the more video-centric platforms like Apple’s iPhone and iPad and Google’s Android platform.
“When you choose to go into a platform, it not just about deciding to go there; it’s about deciding how much effort to put into that platform and what the offering is,” said Inzerillo. “For example, people that really want to consume streaming media and, most important, want to pay for streaming media are not buying Blackberrys. So, for us, there’s not much value in going to the Blackberry right now, because it’s not the right demographic for our particular streaming-video product.”