View from the Editor - Broadband heralds the dawn of a new era in sport - May 2003  

The take-up of broadband is gathering momentum in major markets and will provide a lucrative revenue stream for broadcasters, rights holders, sponsors and technology companies.

In April 2003, baseball became the first major league sport in the US to provide online broadcasts of its games. By offering 1,000 of its live games on a pay-per-view basis throughout the 2003 season, Major League Baseball is both driving forward broadband coverage of sport and harnessing a new revenue stream by charging fans $2.95 per game or $79.95 for the season. Meanwhile, the National Basketball Association in the US offers video highlights on NBA.com for $9.95 per month and Germany's leading soccer league, the Bundesliga is already experimenting with online video clips of its matches for a fee of $1.50 for five minutes viewing. In the UK, many Premier League soccer clubs already take advantage of their right to show delayed coverage of their matches on their broadband channels.
It is estimated that 19.5 million European and 28.5 million North American households have access to broadband via cable or DSL and all its variants. That means access to a technology that allows the streaming of video images at a speed that at best will be comparable to television images and at present is an adequate substitution for not being at a live event nor being able to watch a match or event on television itself.

Sport provides compelling content

The take-up of broadband is gathering momentum in major markets such as the UK and Germany with service providers cutting costs and governments pushing through improvements in infrastructure. Sport provides the compelling content that broadband services need to flourish and therefore broadcasters with access to sport will find that offering additional coverage through broadband channels will boost their coffers significantly. And so far the prognosis is good - consumers are ready and willing to pay for broadband programming if it adds value to what they are already accessing via traditional channels.
According to ArkSports' research, revenue generated from consumers using broadband services to access data, play sports-related games or watch additional coverage of sport globally will be a substantial revenue stream for sports broadcasters and rights holders over the next five years. Income from sports broadband services was worth over $344 million by the end of 2002 with $140 million derived from the main Asia-Pacific markets of China, Hong Kong, Japan, Singapore and South Korea. By the end of 2005 ArkSports forecasts that this will rise to $3.3 billion and to $6.4 billion by the end of 2008. ArkSports predicts that the main markets for broadband sports by 2008 will be the US, China, Japan, Germany and South Korea.

Utilising content for new channels

Broadcasters with major sports rights will benefit most from new broadband revenue streams as they will be able to make use of programming that they are not utilising on their traditional broadcast channels. They will be able to charge fans to access premium content including exclusive interviews and pre-match build-ups. Meanwhile, clubs and federations may choose to hold onto their broadband rights and show matches/events that are not being shown on television or have regional restrictions instead on their own broadband channels.
A market will also emerge for less popular or niche sports that are unable to gain television carriage at all. New communities and therefore new audiences are already being built up around new technologies with broadband in particular offering easier access to chatrooms, fantasy leagues and games based around sport. Delivering sport through broadband will be a saviour for sports unable to reach their fans through traditional means.
Broadband coverage of sport will also be good news for advertisers and sponsors. Content can be personalised for the user and sponsorship/advertising campaigns therefore more targeted.

Forming partnerships is key to success

Over the next few years the industry will see more partnerships being formed between rights holders, broadcasters, sponsors and technology companies. These partnerships will be integral to the development of sports broadband services and will provide new and lucrative revenue streams for all parties involved. Players in the sports industry that do not form partnerships with technology companies or embrace new technology will be left behind. Multiplatform delivery of sport will be key.

Rachael Church - Editor (rchurch@sportandtechnology.com )

This article was originally published in Sportbusiness.com on 25 April 2003

ArkSports' forecasts for broadband sports uptake and revenues are included in the report The Global Business of Sports Television, written by Rachael Church and published by Screen Digest in March 2003. The Global Business of Sports Television also provides an outlook for the future of the industry for broadcasters, properties and sponsors as well as forecasts for: Global sports viewing by region (individuals); Global sports viewing by region (hours); Households using sports services on interactive TV; Interactive TV revenue from sports applications; Households using VOD sport on digital TV; and sports sponsorship rights. The report, which has over 325 pages of text and 340 charts and tables, is priced at £995/$1,595 and can be ordered online at www.screendigest.com/R.Sportstv_03.htm (tel: +44 (0) 20 7424 2820; e-mail sales@screendigest.com).

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