With sports streaming on the rise, traditional broadcasters are no longer the gatekeepers of sports content. Let’s consider the implications, and the trends…
In South Africa – a notoriously proud sporting and sports-loving nation – sports media marketing platforms remain in high demand. However, with ongoing shifts in consumer behaviour and media consumption habits, both media owners and buyers are having to pay attention to keep pace.
The old cliché, “knowledge is power” has given way to “data is power” – particularly in the kinetic and highly competitive sports media world.
Given the vast amount of data available in the digital age, however, sometimes extracting the insights you need can be a challenge.
At Nielsen, we extract and extrapolate to keep sports media stakeholders empowered.
Here is a brief summary of the insights garnered from the latest research.
The Pay TV paradigm: What comes next for broadcasters?
With the proliferation of streaming options bursting onto the scene, audiences are becoming more fragmented and traditional broadcasters are losing their grip as the sole gatekeepers of sports content.
Viewers now have the flexibility to choose from a variety of platforms based on their preferences and interests, leading to a more diverse and dispersed audience base.
According to the Nielsen Fan Insights Study, which incorporated research conducted in May 2020, July 2022 and July 2023, sports content consumption levels have declined on both free-to-air and pay TV since May 2020 – most notably, between 2020 and July 2022.
We approach this century’s quadranscentennial with rapid technological advancements and an equally fast-moving shift in consumer behaviour. In sports-mad South Africa, the sports broadcasting industry is rapidly evolving.
This is mainly due to necessity, as the meteoric rise of over-the-top (OTT) streaming services has disrupted traditional sports rights distribution, challenged the status quo and ushered in a new content consumption standard.
So, what comes next for the often-beleaguered broadcast industry?
Pay TV broadcasters can’t help but pay attention to the transformation. After an initial period of resistance early in the game, they are beginning to embrace OTT platforms, finding ways to adapt and adopt streaming to provide consumers with consumption options that work for them.
DStv has strategically extended its broadcast offering, making its channels available via the recently relaunched DStv Stream. Similarly, the platform’s parent company MultiChoice has expanded the English Premier League offering by including it on the latest iteration of its own OTT service, Showmax.
National broadcaster SABC has been growing its subscription base and sports audience on the SABC+ streaming platform since its launch in November 2022, further allowing the free-to-air consumer an opportunity to watch sports on the move.
However, the public broadcaster faces several financial challenges in terms of acquiring broadcast rights, and it will be interesting to see how they navigate the Olympics and any other major upcoming events.
The recent trend of getting brands to sponsor the broadcaster to acquire rights could be problematic, and an unreliable business model. Other factors, such as loadshedding, the digital transformation push and the reluctance of viewers to pay for their TV licenses, make the operating environment difficult.
The SABC will require some robust strategies, innovative solutions and dynamic commercial models to keep serving sport to the nation.
Digital and social media sharing: Setting a new standard
From live events to behind-the-scenes footage, online sports streaming has revolutionised how we watch and engage with our favourite teams and sports heroes.
Social media platforms and most streaming options have steadily gained traction in the sports consumption space, year-on-year. And streaming platforms owned by rights holders (for example, DStv) have taken the lead – for now.
It’s essential to differentiate the roles social media and streaming platforms play in the sports consumption arena – with social media entrenched as a robust communications and marketing tool, and streaming as the key consumption tool. This critical distinction needs to be factored into all plans for both rights holders and broadcasters, along with sponsors in the sports industry.
The chart below shows that sports streaming is on an upward curve. However, TV broadcasts have not quite yet shown a drastic decline. This highlights that linear TV is still the dominant viewership option, while mobile viewing and short-form content on social media complement linear TV.
A surge in pay TV broadcasters transitioning to streaming platforms seems inevitable. However, this shift will likely lead to fragmentation in the streaming landscape, forcing consumers to assemble a bundle of platforms to fulfil their viewing needs – particularly for sports content.
Still, given the nation’s devotion and passion for sports, fans, by and large, are likely to subscribe to as many sports platforms as they can afford to pursue their sports viewing.
Sports sponsorships and investment: Event-driven spend takes the lead
The lines between entertainment, marketing and sport are becoming increasingly blurred. Sports sponsorship is a dynamic, ever-evolving stage that consistently finds innovative ways of captivating brands, organisations and other relevant stakeholders worldwide.
Three notable trends have occurred have become apparent, and these have firmly informed the energetic resurgence of sports sponsorship in the past two years:
- Covid-19 rebalancing
The lifting of Covid-19 restrictions and a return in consumer confidence has seen a rebalancing of sponsorship fees and a recovery of market conditions.
- Commercial development
Rights holders are driving commercial development through new rights and data-led approaches to extract greater value from the current inventory.
- Major events and responsible branding
Brands are leaning more towards short-term sponsorships tied to significant events, rather than signing long-term deals. And as brands navigate the harsh economic climate, this will likely continue.
The impact of hosting major events, such as the 2022 Women’s Cricket World Cup, 2022 Netball World Cup and the Betway SA20, has significantly boosted sports sponsorship and revenue for various rights holders in South Africa.
Furthermore, the sponsorship has evolved beyond partnerships for the sake of visibility, giving rise to authentic collaborations grounded in shared values, ethos and a mutual dedication to effecting positive change.
Socially-conscious brands are transcending mere partnerships and embarking on shared missions where brands and sports entities unite to pursue singular objectives, forging meaningful alliances that resonate with audiences and generate societal impact.
As a subtext to the three major trends we have seen in sports media spend, there has been a significant uptake in women’s sports sponsorships, which seems logical, considering it’s an area that has historically been overlooked –and this trend is likely to maintain momentum for the foreseeable future.
The financial services sector is still strong in sports investment, particularly with the big banks leading the pack. And we would do well to keep an eye on the crypto industry making a comeback in sports sponsorship, as public interest resurges.
The illustration below highlights some of 2023’s top sponsorship deals. Note, however, that the various entities did not directly declare actual rights fees. Still, Nielsen’s inside track in the sponsorship landscape places it well to give an approximate indication of the deal values.
Globally, football has maintained its position as the sport receiving the most sponsorship support, thanks to the excitement generated by the 2022 Qatar World Cup.
A prime example of this is the massive commitment made by Adidas, who extended their partnership with Manchester United until 2035 – a record-breaking deal valued at £900 million, which came into effect in June 2023. This 10-year extension marks the most significant agreement in the history of the Premier League.
The next big thing: The Olympics
En masse, South Africans show higher levels of interest in content representing the country, its athletes and events that raise the bar for South Africa on the international competitive stage.
Nielsen Fan Insights data shows that awareness levels of the Summer Olympic Games average out to 81% across nine waves of NFI SA data collected between May 2020 and May 2023. This speaks to South Africans’ wide range of sports interests and the sports that will see notable interest levels amongst NFI SA respondents, with an average interest level of 45% in the Olympic Games.
This data affirms that the Olympics is an event of national interest, and the national broadcaster will likely find a way to broadcast the games.
What next?
Media buyers, brands and rights holders have had to reconsider how they approach sports media in order to deliver on audience requirements and be more effective and engaging.
As streaming options continue to increase and sports go digital, competition in that area is hotting up, and maintaining a connection with sports-hungry consumers generally boils down to who owns the rights.
What is exciting, though, is that sports branding and media options are more diverse and exciting than ever. This clearly calls for all role players in the space to be more aware of the data driving audiences while being increasingly creative and innovative in capturing consumer attention in the near future.
Tumelo Selikane, managing director of Nielsen Sports SA, is an experienced commercial, brand and marketing and entrepreneur with over 12 years’ experience growing revenue and increasing market share through commercial and client service relations.
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