How do football clubs, leagues and federations build an OTT business?
The door is opening further for live streaming of domestic sports by clubs and governing bodies in the UK as EFL games will go out over OTT channels even at the hallowed 3pm Saturday slot, for the early part of the new season.
Covid has accelerated the need for sports organisations to take control of their event broadcasts, even though it's no easy task.
The English Football League is reportedly due to agree to let clubs stream all matches live until stadiums are at least 50% full, with Sky Sports waiving rights for any games it isn't broadcasting itself.
This is a sensible deal for fans and welcome for the clubs; in a slight change to the end of the 19/20 Championship season, the home team will keep all of the streaming revenue, rather than both home and away clubs being able to broadcast to their own audiences.
The Premier League does not have an equivalent arrangement in the UK, meaning the majority of games early in the season will be seen live by no fans at all.
Supporters Trusts from all six London Premier League clubs have joined together to protest this, and even when stadiums gradually re-open, the limited capacities will only allow a portion of season ticket holders to attend each game.
Add to this the fans who will not be able to attend for shielding reasons, or reduced disabled access, and the case for greater OTT coverage only strengthens.
As ever it's worth making the point that delivering a good OTT service is hard. The behind-closed-doors streams in the Championship when the 19/20 season resumed saw first-weekend technical problems for the iFollow service when it had to deal with higher capacity, voucher redemptions from first-time users and so on.
There are plenty of potential fail points for sports organisations unused to selling direct-to-consumer (D2C), from hardware and connectivity issues at the venue to login/ payment-service capacity when everyone tries to start streaming at 2:57pm, to customer service and managing social media fallout from the fans who've paid but can’t make it work.
And while it's easy for the fan to envisage live football streaming with the production values of a BT Sport or Sky game, there are plenty of single-camera setups as you drop down the leagues. Can you really charge £10 per game for that level of broadcast quality to people used to being in the stadium?
It will be interesting to see if the EFL allows any flexibility in pricing, having to-date fixed all games at £10 for UK fans and £5 international.
While previously this was worryingly cheap for some clubs - plenty only half-marketed the service for fear of discouraging attendance at the stadium - it now looks like small beans when trying to replace lost matchday revenue.
Raising prices won't be an easy sell; Now TV day-passes, which often include more than one game, go for £9.99.
And, since streams will be included in some season-ticket packages, this won’t all be additional revenue - albeit any contribution to season ticket renewals for a season where the number of games included is unknown, will be welcome.
Nevertheless, now the door to mass availability of streamed UK football is ajar, it's hard to see it closing even if this initiative finishes when stadium access passes the 50% threshold.
Football is far from the only sport that needs to accelerate a move into OTT, post-Covid (or even still-in-Covid). We work with around 30 NGBs through a project with Sport England, and this is an issue for many of those organisations. While some need to replace lost broadcast revenue, others barely had that in the first place and need to commercialise their digital assets simply to survive.
EFL clubs at least have a reasonably robust central streaming and payments platform provided for them by the league. But if you’re looking at OTT for the first time and don't have that option, where do you go and how do you make the most money out of this?
On an owned platform you can set pricing but you’re also fully responsible for marketing.
Die-hard fans will bludgeon their way through an average/bad UX to get to the stream, but you’ll have to do better than that for everyone else, with as few friction points as possible.
Vimeo is an interesting self-serve option, with very strong player features (polls, moderated Q&As), and really modestly priced if you’re comfortable without the safety net of a supplier who will be on the hook for anything from hardware issues upwards..
In all owned cases though, you have to drum up the audience yourself which likely means core fans only; there are no network effects to benefit from like you may have on YouTube, Twitch or Facebook.
YouTube has a good UX (provided junk sites aren't buying ads against your channel...), and also the best discovery process of any platform. While we don't feel as bullish as some about the relative value of highlights - ubiquity of access means the value has a ceiling - undoubtedly highlights help drive channel subscribers, which drives more live views.
Channel memberships on YouTube can include multiple levels at price-points ranging from 99p - £89.99 per month (channel owners retain 70% of membership revenues), and setting live streams as exclusive to specific member tiers is possible, albeit a beta feature.
Twitch would be another major consideration as a platform that brings an audience used to spending a long time watching live streams, and one that supports creators via donations and other features (disclosure: they are a Seven League client). They've recently launched a new sports category, hard on the heels of live-streaming Amazon Prime’s lockdown Premier League games - and with their co-streaming function, enable your community to be part of the broadcast. They also have the best chat function and there is an expectation from the audience that they’ll be able to interact with the creator.
Revenue opportunities on Twitch include a share of advertising; Channel subscriptions can be bought via Amazon Prime membership (Prime users get one free channel subscription per month), or via tiered payment levels starting at £4.99 monthly. Content is not gated for subscribers, but they have access to a set of perks and benefits such as custom emotes and ad-free viewing.
Facebook is a tough call to make from a revenue perspective; even when Eleven Sports' brought free-to-view La Liga and Serie A live games to the platform, it was a struggle to retain viewers; the churn in a Facebook live stream is often high; there's little habit of extended watch times from the platform audience.
Ad CPM rates are generally lower than on YouTube, and crucially the available inventory for in-stream ads seems low; in some monetised VOD examples we've seen, only 5% of eligible views actually featured an ad.
In summary: is going direct-to-fan hard? Yes. But while there’s plenty of work needed, there are also people who can help you plan and deliver that, not least ourselves.
Do you need to invest in production capability to create a product that fans will return to? Almost certainly. But you’ll only sell a bad experience once, so you can’t afford not to.
Is there money in it? Yes. You need a proper business plan, you’ll have to market it well (and not only on digital channels), and you’ll have to give it time to build.
But the number of broadcasters willing to pay for the privilege of taking on all the risk is dwindling all the time, and if you can’t demonstrate there’s a business in your live event broadcasts, what leverage do you have to change that anyway?
Daniel Ayers is a Consulting Partner at Seven League, leading Seven League's work with football consultancy clients and helping them build and monetise their use of digital. Previous to joining Seven League, Dan led digital strategy for Columbia Records and Sony Music Entertainment. Seven League consultancy is part of the Mailman Group, offering global digital consultancy and agency services to the sports industry.