The use of the word “disrupt” and “innovate” in Google search terms has increased dramatically since the Silicon Valley giant began tracking them in 2004. Both terms are now searched around twice as much as they were in the early 2000s.
These words have become popular as entrepreneurs have turned to the internet to solve problems and find better ways of doing things which has led to untold benefits across multiple industries.
Decades of Disruption
This age of disruption has given us services like Dropbox, which offers us a new way of backing up and sharing files. We also have Amazon, an online store that allows us to buy almost anything and have delivered quickly.
Casinos and sports betting businesses have also been disrupted by the innovations of online casinos and bookmakers that let customers place bets from the comfort of their own homes. Further innovations in this sector have come from companies like oddschecker who review and compare the odds and promotions of major players in the industry to help consumers get better value.
Another major innovation has been streaming services. Led by Netflix, the video rental industry has been severely disrupted as digital services companies entered the fray. Traditional brick and mortar stores like Blockbuster where you’d spend time browsing the shelves to find a VHS or DVD to take home for the weekend were driven out of business by the convenience of streaming.
Cinemas, video stores, and record shops have all suffered at the hands of streaming services. Music charts have even had to change the way they measure song popularity to ensure they report accurately.
Another area that streaming is threatening to shake-up is the multi-billion pound sports broadcasting industry.
TV and Sports
TV has been one of the biggest drivers of the commercialisation of sport. For example, sponsorship deals in football were not signed until after games began being shown on TV. Regular scheduling of race weekends did not occur in Formula 1 until after TV rights deals were signed. Before that, sessions were not always held on the same days as they are today.
The birth of the Premier League in 1992 changed this even more, as it created dedicated sports channels in the UK where advertisers could target football fans which had not been possible with the BBC coverage.
For the next nearly 30 years, the face of sport on TV changed dramatically. Almost all of Britain’s most-watched sports disappeared behind paywalls. Football, rugby, cricket, golf, tennis and Formula 1 all sold their rights to commercial broadcasters like Sky and BT.
This worked out well for the owners of the sports themselves.
Today, the Premier League has sold the rights for 2019-2022 for £9.2 billion, making more than £3 billion per season. That equates to around £40 million paid to each club from an “equal share” of domestic TV rights alone. Even more than this comes from international broadcasters.
Similar sums can be seen in other sports, with the UK rights to Formula 1 costing Sky more than £200 million per year, while broadcasters in other countries also hand over similar amounts of cash. Sky also pays around $2 million (£1.5 million) per year for the PGA Championship and recently bid £300 million for the Six Nations rugby competition.
Disrupting Sports Broadcasting
While TV companies have been the meal ticket of sports leagues in recent years, many are currently examining ways to cut out the middle man and sell directly to the consumer.
Most major sports leagues in the US already have an over the top (OTT) streaming service that works like Netflix or Amazon Prime Video. The NFL Game Pass, for example, gives fans access to live games as well as on-demand coverage and highlights. It’s also created its own original content, mostly pre and post-game magazine-style shows.
Fans outside of the US have access to all games for a fee of around £144, while those in the US may have some limitations on which games are available live due to existing TV rights deals.
Similar services are offered by the NHL, MLB, and NBA.
Formula 1 also offers a streaming service, live broadcasts are generally only available to fans in countries where a TV rights deal doesn’t already exist. The sport also airs live and recorded content over each race weekend, including discussions on technical changes to cars, news shows, driver interviews, and pre and post-race analysis. It also publishes short highlight videos of each session.
Going it Alone
It seems all of these leagues are slowly developing their own in-house broadcasting abilities to be able to eventually go it alone.
In the UK, the EFL has already done this. It offers an OTT service to fans through the teams in the league. This iFollow service airs live games with more camera angles and full commentary for around £10 per game.
For the latest round of TV rights, the Premier League sold a small package of games to Amazon. The US company aired the games live over its Amazon Prime Video service during December 2019 and will do the same in 2020 and 2021. It did this alongside offering behind-the-scenes documentaries about several leading teams that let fans get closer to the sport than ever before.
Some pundits are suggesting that this was a trial for the Premier League to see how much demand there was for the streaming service.
Rumours are circulating that the league is working on its own OTT streaming service which has humorously been nicknamed “Premflix”. This may seem counter-intuitive at first, especially since the league makes more than £3 billion from broadcasters and cutting them out of the process could be seen as “biting the hand that feeds them”.
However, a Premflix service could make commercial sense. The league could sell to fans directly, charging less than a Sky Sports or BT Sports subscription while still making significantly more.
At £20 per month, the Premier League could make £5.5 billion per season if all of Sky’s customers subscribed. This doesn’t account for sponsorship deals and ads that the company could also use to make more money.
While there have been no official announcements from the Premier League itself, its clear that this is the direction of travel for sport as a whole, and that football is ripe for disruption and innovation.