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The Rise of Fan Engagement a Guide to the New Wave of Live Video and Interactive Broadcast for Sports and Media Companies Contents

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The Rise of Fan Engagement a Guide to the New Wave of Live Video and Interactive Broadcast for Sports and Media Companies Contents The Rise of Fan Engagement A guide to the new wave of live video and interactive broadcast for sports and media companies Contents THE DRIVERS OF DISRUPTION TO SPORTS AND TRADITIONAL BROADCAST 04 STAKEHOLDERS 07 THE IMPACT: DISRUPTION TO TRADITIONAL SPORTS 09 THE IMPACT: FAN ENGAGEMENT AND THE BOTTOM LINE 13 THE NEXT GENERATION OF BROADCAST & FUTURE OF CONTENT 16 THE ENABLING TECHNOLOGY 19 USE CASES: LIVE VIDEO EXAMPLES 22 USE CASES: INTERACTIVE BROADCAST 24 NEW RULES: BEST PRACTICES FOR INTERACTIVE BROADCAST 26 REFERENCES 30 2 www.tokbox.com Introduction Sporting organizations enjoy what In this paper you will discover: many brands spend tireless years and significant marketing budget How disruptive digital technologies fighting for, natural and unwavering have impacted the sports and media brand loyalty. It’s the holy grail for any broadcasting landscape From the proliferation of marketer - customers are acquired at birth, promptly indoctrinated by the The importance of driving fan mobile, online streaming, the generation of family brand loyalists engagement in the digital age rise of social media to more before them to become faithful fans recently, live broadcasting who stick by your side, no matter what. The technologies being leveraged to apps, the way fans watch and build engaging fan experiences Instead of viewing these forces as engage with their favorite disruptive, sports organizations and The new wave of live video and sports has radically changed. broadcasters are uniquely positioned participatory models of sports to embrace this change and leverage broadcast with case studies emerging technologies, creating new and engaging experiences for their fans, How to play by the new rules of helping them stand out from the crowd. broadcast, and win 3 www.tokbox.com The Rise of Fan Engagement // Introduction The Drivers: Disruption To Sports And Traditional Broadcast The way fans consume and engage with sports has changed dramatically. In today’s increasingly fragmented digital world, sports organizations and broadcasters aren’t capturing the attention of fans, and therefore revenue, like they once did. Sports viewing, once considered inseparable from TV, is transforming1. Totally new viewing behaviors have risen from a raft of forces that are converging and disrupting sports content. 4 www.tokbox.com The Rise of Fan Engagement // The Drivers Behavior Mobile Companion Device 2 Rise In Online Consumption 87% of consumers use more than one device at a time. 74% of mil- Online consumption of sports video grew 388 percent year-over- lennials who use a combination of TV/smartphones during viewing. year from 2013 to 20145 . Rise of Social Fans Are Not Just Watching, They’re Producing More than half of people under 35 engage with social media AT&T figures show that fans consumed 205% more data than the while they are watching TV content3. previous year during Super Bowl 50. This represents millions of status updates, videos, photos and live video broadcasts6. Second & Third Screen Growth 4 Millennials Almost a quarter of all video viewing in households with high- 14- to 17-year-olds are abandoning the TV screen at the rate of speed Internet access now takes place on a device other than a 33% for movies and television shows and 26% for sporting events7. television set. 5 www.tokbox.com The Rise of Fan Engagement // The Drivers Technology Content Incredibly Powerful Broadband Speed Explosion Of Live Streaming Content Over 15 years to 2012, bandwidth increased from 56KB dial up As sports fans cut the cord, they are streaming live sports in to 100MB+. Average broadband speed will more than double droves. Over 15 million people tuned into the first-ever global live from 2014 to 2019 from 20.3 Mbps to 42.5 Mbps8. stream of a regular season NFL game, hosted by Yahoo11. Live Mobile Broadcasting Apps Video On-Demand Mobile live streaming apps such as Periscope and Meerkat, The growth of video content platforms such as Netflix are giving Facebook Live and even Snapchat have exploded into the main- way to a generation leaving cable behind in who are in favor of stream with Periscope alone claiming 10 million registered users9. on-demand streamed television, movies and sports. Powerful Cameras At Fingertips Competing Content Fans now have the tools to photograph, film, publish and broad- The amount of sports content has more than tripled in the past cast their own content with the help of powerful smartphones decade while the time people spent watching TV increased just cameras upwards of 21.5 megapixels10. 6.4 percent12. 6 www.tokbox.com The Rise of Fan Engagement // The Drivers The Stakeholders Digital disruption to sports presents both challenges and opportunities for a range of stakeholders. In this new world, where we will later discover everyone is a potential broadcaster, the needs and objectives of those vested in sports are evolving. 7 www.tokbox.com The Rise of Fan Engagement // The Stakeholders A Snapshot Media Companies Leagues and Clubs As sporting content moves online, free-to-air Sporting Organizations are striving to engage and grow broadcasters are battling to increase ratings and supporters with shrinking attention spans advertising revenues while finding cheaper models of content and distribution. Sponsors Fans Sponsors are expanding beyond traditional media to Fans are searching for more personal experiences with the reach their online and mobile audience teams they love and through the technologies they use 8 www.tokbox.com The Rise of Fan Engagement // The Stakeholders The Impact: Disruption To Traditional Sports Broadcasting Attracting and keeping fans in the stands is getting harder to do. Live attendance across sporting leagues - pro basketball, football, motorsports, baseball and even college football - has declined or leveled off in recent years. While many argue that is due to rising ticket prices and higher-quality video broadcast, the decline in live-audience attendance hasn’t translated to an equal increase in TV ratings or subscribers. 9 www.tokbox.com The Rise of Fan Engagement // The Impact While sports TV ratings and subscriber counts fall, the digital age presents countless more ways for fans to connect with sports content. Disruption to sport and traditional broadcast means sport and media companies must leverage new technologies to engage fans. Declining Ticket Sales & Sports TV Subscribers While the US sports market is expected to grow by 4.5 percent from 2013 to 2018, PWC projects that gate revenue will increase only by 2.6 percent13 Sports network ESPN lost 3 million subscribers in 2015 For the first time, media rights are projected to surpass gate revenues and become the industry’s largest segment by 2018 (CAGR 7.2%)14 For the first time, media rights are projected to surpass gate revenues and become the industry’s largest segment by 2018 (CAGR 7.2%)15 10 www.tokbox.com The Rise of Fan Engagement // The Impact Live televised sporting events are still immensely popular, with big games or matches attracting large audiences. However the rising cost of TV rights is a challenge for sports broadcasters. Rising Cost Of Sports TV Rights TV rights are projected to rise 9% a year to $19.3 billion in 2018, according to PwC 16 TV networks including Disney’s ESPN, Fox Sports and Time Warner’s TNT and TBS will spend a combined $12.5 billion in the next year for rights to carry professional football, basketball and baseball games and the Summer Olympics 17 11 www.tokbox.com The Rise of Fan Engagement // The Impact As TV networks lose subscribers while shelling out millions for surging broad- cast contracts, sporting and media organizations must look well beyond the stadium and television set. In order to drive long term profitability, sports broadcasters must harness technology to produce and distribute cheaper yet high quality engaging sports content through channels that will reach millions of viewers. 12 www.tokbox.com The Rise of Fan Engagement // The Impact The Impact: Fan Engagement And The Bottom Line The biggest change that digital disruption in sports is driving is the need for sporting organizations, clubs and broadcasters to increase fan engagement. These stakeholders have long conceded that one-way broadcast is no longer enough. 13 www.tokbox.com The Rise of Fan Engagement // The Impact Since the birth of the internet, the rise of social media, mobile, As sporting organizations, clubs and media and multiple devices, the industry has innovated with a companies grapple with changing sports content number of marketing strategies and technologies to maximize “ consumption and look to maintain a commercial and personalize fan engagement both during, and beyond foothold, they must recognize the importance of gameday. However with the latest wave of disruption dominated engaging their audience and converting fans into by cord cutting, online streaming and live mobile broadcasting paying customers. apps, the need to create and distribute fresh, affordable content that drives fan engagement is more urgent than ever. 14 www.tokbox.com The Rise of Fan Engagement // The Impact Study: Fan Engagement and Revenue Engagement equals commercial success Hopscotch, a Californian sport mobile platform company, analyzed the data from a Ticketcity.com study on the level of fan engagement on four Research shows that the companies that create a compelling major leages18 - MLB, NFL, NHL, and NBA - using a range of criteria from fan engagement experience, both on and off the pitch, drive average attendance of all games through to Facebook and Twitter activity greater loyalty, affiliation and, as a result, increased revenues. to determine a fan engagement score. They compared the fan engagement leaders for each league with each team’s revenue and valuation. What they This is indisputable evidence that sporting companies must found was that teams which ranked highest for fan engagement also came always be pushing the envelope of fan engagement to achieve in the top 3 of revenue and valuation every time.
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