The digital landscape and consumer demands are changing fast and keeping apace is a major challenge as Ben Miller explains.
Netflix CEO, Reed Hastings recently announced that the service had reached over 100 million subscribers. In 2016 the business expanded from 60 countries to 190. How soon before Netflix targets sports rights? What better on-going drama and differentiated offering is there than a football league?
The Millennial (18-35 year old) and Generation Z (under 18) age groups don’t watch television. They migrate between established and new digital platforms, consuming content on different devices, often simultaneously. There is a gap between what young consumers want, and what the football industry and its partners are providing. This widening void offers an attractive entry point for potential disruptors.
FANG is the acronym traders use to describe Facebook, Amazon, Netflix and Google. With unprecedented financial muscle and global reach, these companies have been disrupting industries such as music, television and movies for years. In all of these sectors, FANG have successfully upturned established ownership models, rights markets, distribution systems, pricing strategies and revenue sharing models. Complex algorithms integrated into their platforms tell them what their customers want.
Amazon is paying $10 million per match to stream NFL’s Thursday Night Game. It costs HBO around $10 million to produce one hour of Game of Thrones. In the UK, BT Sport is paying $6.4 million per hour for Premier League football. So despite the huge price hike recently for Premier League rights, football could still provide good value for FANG.
Netflix, which started life as a humble DVD mailing service, recently caused controversy at the Cannes Film Festival, by becoming the first streaming company to submit entries to this cliquey, cinematic gathering. “We like big screens too,” explained Netflix CCO Jonathan Friedland, “it’s just a lot of people in the world don’t have access to them.”
Apple has just produced the latest 16-episode batch of the hugely popular “Carpool Karaoke” series, available this August to its music platform subscribers. As well as its NFL experiment, Amazon, already a movie and series producer, plans to triple the amount of original content it creates this year, according to its CFO, Brian Olsavsky.
Successful enterprises of the digital age have cut out the middlemen, making life cheaper and more flexible for clients. Younger audiences are accustomed to low-cost, on-demand services. Sluggish response to change, out-dated governance and expensive, inefficient delivery to customers, mean that football is losing its connection to contemporary consumers.
The proliferation of digital platforms and simultaneous global smartphone penetration has created a mass of data. In 2016, Facebook created 300 petabytes of information (and $28 billion in revenues). One petabyte is the equivalent of 1 million gigabytes, or 13.3 years of HD video.
For those with the access, time or budget to properly make sense of it, data is of course very insightful (and, for several companies serving the sports industry, profitable), but for many in the sector it’s often fogging the view. As we hurtle deeper into the digital age, it’s useful to stop sometimes, wipe the mist from the window and take a look at the world around us.
Studies suggest that the average millennial is a self-entitled, pessimistic freeloader with no attention span. The millennials petulantly demand not only when and where they want their sports content, but how they want it too. I’m being deliberately provocative here – they are also creative, skilled and socially responsible – but looking ahead to Generation Z, these hard-to-satisfy characteristics look likely to become even more pronounced.
I have four GenZ’s, or “centennials”, living in my house.
My children will find the notion that I used to fork out a whopping monthly fee to a cable TV company to watch an occasional football match, or a movie, with no interest or time to watch the other 99% of the content available, as ludicrous as the idea that there was a time when smartphones didn’t exist, or that a man in a white coat used to leave bottles of milk outside the house at 6am.
It took the telephone 75 years to attain 50 million users. Radio needed 38 years to reach the same audience, while television took 14. The internet cut this down to four years, and Facebook needed just two. But at the same time, sales of vinyl records have tripled in the USA since 2010. It seems that music lovers still adore the feel, smell and sound of those old LPs.
In the same way, while attempting to navigate through this shifting digital world, football needs to continue to get bums on seats. It was that unique adrenaline rush of the first live sports event ever witnessed that converted most of us into lifelong fans, not precisely targeted content campaigns.
In addition, in this era of 140 characters, there is a swelling renaissance of long-form written content. While newspapers and magazines sack journalists in their quest to reach younger audiences and monetise digital platforms, there is a paradoxical realisation among millennials of the value, and indeed necessity, for nuanced, objective, expert analysis.
Brands now have to be quicker and more adaptable in order to keep apace with the young. But with so many platforms available there are more opportunities than ever for football to engage with new audiences. It may be harder and more complex to be on many different platforms at the same time, offering different things to different people, but that is what it takes to remain relevant.
Current challenges centre around finding the balance between exclusivity and reach, openness and piracy, plus combining long term strategy with the flexibility to adapt as quickly as the digital world dictates. Add to this framework the on-going quest to create reliable and accurate tools to measure digital ROI, and we can start to plot the next steps though this evolving terrain. But disruption is due in football, and its effects are always seismic. Only the strong and flexible will be left standing. ■
Ben W.S Miller is a communications specialist in the global football industry. He works with elite athletes, brands, digital platforms and the largest and most credible NGO in soccer.
Find Ben on Twitter @BenWSMiller and LinkedIn www.linkedin.com/in/benwsmiller
Sources: Nielson, Deloitte, Financial Times, Wireless Smartphone Strategies, Variety, The Economist, Leichtman Research Group, The Drum and Dr. Christopher Kennett.