What content are sports content are fans willing to pay for? What are some examples of companies that are able to charge for access to content (better if sports specific)? What are important behaviours around paying for content online?
Sports fans are willing to pay for online content because it gives them the ability to pay only for the sports events they want to watch. Fans are also willing to watch live sports on their mobile devices, primarliy the big four in American sports: NFL, MLB, NBA and NHL. In addition, they are willing to pay for over-the-top subscriptions and online content as compared to satellite or cable packages. Many fans maintain cable connections only to view live sporting events. Examples of companies that currently charge for access to sports content include ESPN, Amazon, Athletic, Sling TV, Playstation Vue, NBC Sports, FuboTV, and Walt Disney.
SPORTS FAN DEMOGRAPHICS
86% of Americans are sports fans (92% of men and 80% of women considering themselves sports fans), and 88% of those fans like to following more than one sport. 90% of sports fans say they're willing to pay for sports programming — sports fans from ages 25 to 34 being willing to pay the most out of any age group. Older sports fans are willing to pay the least. According to a comprehensive behavioral study conducted by The Center for the Digital Future at USC Annenberg and ThePostGame, the "most intense sports fans" are 35-to-54-year-old African-American males who are married, college-educated, and earn $125,000 per year. The study also revealed that 64% of fans live in a location other than where their favorite team plays. And the more intense the sport fan, the more he or she is willing to pay.
WHAT FANS ARE WILLING TO PAY FOR
Many sports fans are willing to pay for OTT, or Over-The-Top, subscription service. The Center for the Digital Future at USC Annenberg and ThePostGame conducted a study that showed that 63% of all sports fans are willing to pay for an all-sport OTT. The same study revealed that 70% of households with children and 78% of people who "describe themselves as intense sports fans" are willing to pay for an OTT subscription. 56% of sports fans are even willing to pay more of their monthly budget on OTT subscriptions than cable packages.
The most popular sports followed by Americans are, football (NFL and NCAA college football), baseball (MLB), basketball (NBA and NCAA college basketball, specifically the Tournament) and hockey (NHL). Content that appeals to sports fans isn't limited to just the sporting events, either. 50% of fans watch supplemental sports content, with 60% saying that this supplemental content is important to them.
The NFL, Americas number one viewing sport, is especially popular with sports fans. Amazon was even willing to pay $50 million to secure the rights to stream Thursday Night Football to its Prime subscribers, a number that shows their confidence that people will be willing to purchase a Prime membership ($99/year) to access NFL streaming. Premier League soccer games are also a type of content that fans are willing to pay for, as evidenced by NBC Sports' new Premier League Pass.
FAN BEHAVIOR AROUND ONLINE CONTENT
Sports fans are willing to pay for online content because it gives them the ability to pay only for the channels they want to watch. The ability to view sports on multiple media platforms, such as mobile, PC, iPad, etc., is also attractive to fans.
32% of fans in the 29-36 age range are willing to watch a live sporting event on a mobile phone using applications such as Meerkat or Periscope.
63% of sports fans are willing to pay for an "over-the-top subscription". Whereas, 56% are willing to spend extra on online streaming as compared to satellite or cable channels. Younger fans were also found to be more willing to pay for content as compared to older fans and they were also found to be having a more positive perception when it comes to advertisement. 65% of Gen Z and younger millennials are habitual to consuming content on their mobile devices.
Fans are also willing to pay as a way to avoid expensive cable TV subscriptions. According to a 2017 poll taken by PwC, 82% of Pay TV subscribers said they would be willing to cut back or completely cut out cable packages if they were no longer necessary to watch live sports games. The average sports fan is willing to pay $23 per month to watch an unlimited amount of live sports, regardless of platform.
According to a report from Actual Experience, there's a lot of room for improvement when it comes to a consumer's experience of digital sports programming. Only 22% of users reported "very consistent and high quality experience." So while streaming sports programming may be attractive to sports fans, in order for providers to keep those fans, quality standards must be improved.
There is also a risk that with so many options available, the market could become overwhelming for consumers. According to a PwC poll, 75% of consumers "can't handle" using more than four services if they're also subscribed to Pay TV.
Below are numerous examples of companies that are successfully charging for access to their sports content.
In April 2017, Amazon announced that its Prime subscribers would soon have access NFL "Thursday Night Football" on Amazon. Amazon reportedly paid $50 million to secure the rights. Amazon is counting on the draw of Thursday Night Football to result in an increase in their Prime memberships, which cost $99 per year.
San Francisco-based Athletic charges its subscribers $40 per year for sports coverage. Athletic says they're able to turn a profit with 8,000-12,000 subscribers from one city. They cover local sports in Chicago, Cleveland, Toronto, and Detroit. They are not relying on any advertising and do not have plans to do so. Instead, they focus on delivering focused content to subscribers and they post just a few articles per city per day.
Sling TV and Playstation Vue offer sports programming from networks like Disney’s ESPN and Fox Sports.
In June 2017, NBC Sports announced the launch of their new Premier League Pass for soccer fans, with a price tag of $50. Not only does the Premier League Pass provide live streaming, but it enables access to highlight clips and replays of most soccer matches, even those not offered live on NBC Sports Gold.
FuboTV appeals to sports fans by narrowing its focus to sports. Fubo Premier has an introductory price of $35 per month, which later rises to $50 to month. They provide access to over 69 channels, including most major networks, although ESPN is not yet included.
In August 2017, The Walt Disney Co. announced a plan to offer OTT streaming for ESPN, recognizing that a "big cable bill" is no longer appealing to subscribers. Lee Berke, president of LHB Sports, Media & Entertainment, stated that "…streaming is where the growth is and it's where the next generation of viewers are increasingly heading."
When it comes to watching sports, it's very important to fans that they're able to view sports programming live. But there's an increasing openness to the method in which fans watch their favorite sports, and they're willing to pay for it. As Jeffrey Cole, Founder and Director of the Center for the Digital Future at USC Annenberg says, "Sports is the last category of must-see-now content. Based on our data, GenZ and Millennial fans are clearly shifting preferences, behavior and spending."