Sports is fast becoming the new battleground where live OTT streaming is challenging traditional pay-TV (cable and satellite) operators and distribution models.
The value of global sports rights grew by $49.5 billion in 2018 (a 5.5% increase YoY). Still, with increased interest from Amazon, Twitter, and Facebook plus a range of new sports-focused live OTT streaming providers such as DAZN and ESPN+, the value of sports rights has been predicted to grow to as much as $85 billion by 2024.
Live and exclusive premium sports have traditionally been one of the mainstays of pay-TV, with Fox founder Rupert Murdoch famously calling it “the battering ram” of all their pay-TV operations. Live OTT streaming of sports has the potential to completely upend that model and may be the decisive victory in the war against pay-TV.
One survey found that 82% of U.S. sports fans would terminate or reduce their pay-TV subscription if they no longer needed it for sports. Other data shows that global subscribers to sports-focused OTT providers grew 74% between 2017 and 2019.
So, what is driving the growth of live OTT streaming of sports, and what is standing in the way of it becoming the world’s leading sports viewing platform?
What’s Driving the Growth of Live OTT Streaming?
Sports are time-sensitive and appointment-driven: you only get to watch it live once. That usually means that you have to be at home or at a sports bar at the designated time, or you’re missing the game.
However, with the world becoming more mobile-driven, live OTT streaming and TV Everywhere is making sports accessible wherever the fan happens to be, whether during a commute or at the airport, or by a cabin by the lake, essentially what have earlier been “sports-free zones.”
Ability to Choose the Packages They Want
A common complaint is that traditional pay-TV subscription packages come with a lot of fluff, and include many themed channels or obscure sports that the mainstream sports fan has no interest in. With live OTT streaming, fans are getting to choose and pay for exactly what they want. This could mean paying for only certain conferences in the NCAA or soccer leagues from certain countries, right down to just focusing on one team, like Real Madrid.
A recent survey of UK pay-sports subscribers found that 96% of fans would be willing to pay more for a channel where the content was personalized to their needs. Greater choice and control over what customers are paying for is a major draw factor for live OTT streaming sports providers.
Flexible Payment Models
The recurring income of monthly pay-TV sports subscriptions was the driving force of creating sports broadcasting giants like ESPN in North America and Sky in Europe. Along with cord-cutting and the move to OTT streaming providers in general, there is also a greater desire for more flexible ways for fans to pay. This might include just paying for a single day of action, one game, or even breaking it down to paying for a 10-minute slot. Content can also be monetized through ad-driven platforms or as part of a much broader subscription service (such as Amazon Prime).
Open to all devices
For many sports fans, the idea of kicking back to watch an event in front of an 82” flat screen doesn’t suit their lifestyles or their pockets. In India, for example, where the IPL cricket tournament has become one of the world’s most valuable sports events, the IPL’s live OTT streaming partner Hotstar has reported that its streaming app had been installed by 45% of the country’s 300 million smartphone users.
Live OTT streaming means fans can watch what they want on whatever device they want, which also makes multi-screen viewing throughout a household on game day a real possibility, perfect for when several big events are running concurrently, or where household members have different preferences on which kind of device to watch it (for example, teenagers in their bedrooms, mom and dad in the family room).
Challenges Facing Live OTT Streaming
Combating Live Sports Piracy
The instantaneous nature of live OTT streaming means that piracy needs to be countered – effectively, shut down – in real-time. A stream being shut down two hours after the event ends doesn’t harm the pirate’s business model. Additionally, there is a very lax attitude, especially among younger people, toward accessing pirated content. Over 50% of Millennials in the UK admitted to watching pirated sports streams, and 1/3 admitted to doing so regularly.
Sports stream piracy is estimated to cost the industry up to $37 billion a year. If OTT providers are going to ensure adequate monetization of their sports rights, content and service theft needs to be addressed successfully.
Therefore, modern content security technology is essential to protecting the revenue of premium live sports streaming services. However, protecting a live sporting event with legacy conditional access systems (CAS), or even modern digital rights management (DRM) technology alone may not be sufficient to block piracy services and redistribution of the event. Today, pirates effectively bypass CAS/DRM systems by restreaming live sporting content using various circumventing tactics such as screen recording software, external camera recording, or HDMI capture devices with a high-bandwidth digital content protection (HDCP) “stripper”.
Anti-piracy measures that can be adopted include video watermarking technology, which is a crucial element to enhance content security systems. User-specific forensic watermarking is a method to identify the source of restreaming piracy by pinpointing the last authorized user and device. Session-based forensic watermarking enables the service operator to embed a unique identifier for each user, and therefore to identify the actual device that is “leaking” (illegally restreaming) the content. This process allows for real-time detection of the source of piracy and enables instant shutdown of the illegal redistribution, or the ability to take other actions subject to the service provider’s policy.
Ensuring a Quality Experience
One of the biggest problems facing live sports streaming is how its experience compares to the clear and timely signal arriving via traditional broadcasting. For TV or movie viewers, slight buffering or delays aren’t a major issue, but for live sports, it could mean missing the biggest play of the year or the annoying event of hearing your neighbors cheer before you see what’s happened.
To improve that user quality of experience (QoE), live OTT streaming providers need to counter potential latency issues and get live events to their viewers as quickly as possible. This also means creating digital video security mechanisms that can defeat piracy without adding latency to streaming speeds or impacting the overall QoE.
OTT Has Potential
OTT sports streaming is on the rise and has the potential to become the major platform of all sports viewing. It has multiple advantages over the traditional broadcast-based model, and the sports rights market overall is also growing significantly in value.
There are still challenges that need to be overcome, however, in terms of combating piracy to reduce revenue leaks, and to offer a consistent broadcast-like QoE.
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