Sports streaming is vital content for betting operators. But as with the music industry before it, the interaction between rights holders, broadcasters, content and rights specialists and user consumption is constantly evolving and will rapidly take on new forms, especially if the illegal channels are moved onto widely used, paid-for platforms.
By Scott Longley
In October 2009 English football fans woke up to the then novel idea that they could watch games on their computer or laptop after Perform Group secured the rights to broadcast the England-Ukraine World Cup qualifier exclusively via an online stream.
It was a first. The game was available for £5 via a dedicated website, ukrainevengland.com, and it drew an estimated audience of half a million. But as consumer finance site MoneySavingExpert was keen to point out at the time, it was also made available free-to-view via bet365.
The game is now long forgotten (Ukraine won 1-0) but it had longer-lasting effect on the public imagination, introducing to a wider audience the close connection between streaming and betting. Perform is a well-known provider of streaming content, but Sportradar was actually the first to offer the service to betting operators back in 2005.
In the intervening years since Sportradar began offering this content, the growth of in-play and the provision of streamed events have gone in tandem and the companies involved in supplying both the pictures and the data have gone from strength to strength.
Major players and evolution
As with music, sports streaming is a large and growing business and its future evolution has enormous implications for the betting industry. Sportradar “significantly upgraded” its own streaming offer with the acquisition in April of fellow sports rights and streaming operation Sportsman Media Group for an undisclosed sum, adding a volume of events which takes the combined total to over 31,000 matches a year.
Perform Group initially floated on the London Stock Exchange in 2011 and was then taken private again in late 2014 by majority shareholder Access Industries, owned by Warner Music owner Leonard Blavatnik.
Just behind those two is IMG, which remains a high-profile market participant – particularly when it comes to blue chip global sports rights – while back in the established realm of content for betting broadcasting, the UK’s SIS remains a significant player.
All are involved in negotiating their way through an increasingly busy sports rights market.
Back in 2011, Perform’s prospectus mentioned five categories of sports rights, from top-tier events such as the English Premier League (EPL) and F1 down to category five niche fare such as badminton and table tennis.
There were sub-categories in between for the TV rights versus the non-home market internet broadcast rights for products such as European football coverage and tennis. Indeed, since 2011 the sports rights market has become an ever more complicated and competitive market.
Among the highlights is the 10-year deal Perform signed in December 2014, a matter of weeks after its delisting, with the Women’s Tennis Association (WTA) worth US$525m. In December 2015 Sportradar, meanwhile, signed a deal with the International Tennis Federation (ITF) worth US$70m which according to reports represented a 500% increase on the previous agreement.
But streaming is not just about the (very expensive) tip of the rights iceberg; a web of rights deals across leagues and territories shared out among the top providers.
Stefan Debus, managing director at Sportsman and now with Sportradar, points out that the acquisition means Sportradar now has the broad spread of coverage that can feed its bookmaking clients with the 24-hour coverage they desire. “The most ambitious and successful operators can’t afford to have gaps in their streaming coverage,” he says.
“For years, Sportsman and Sportradar focused on securing a broad spectrum of rights, while ensuring that each company’s offering included some top-tier content. But with this year’s merger and by combining our respective portfolios of live sport coverage, we really do now provide the most comprehensive 24 hours of audiovisual, no matter the time of year, with a complement of top tier content that includes the Bundesliga and Copa del Rey in football, the Chinese Basketball Association, volleyball’s CEV, ITF Tennis and ice hockey’s KHL”
With the help of streaming – and with the data services that in the case of Sportradar and Perfrom are often packaged with it – in-play has long been a round-the-clock business. As much as deals such as with the WTA and the ITF grab the headlines, it is the bread and butter rights and data deals which are vital to the operators.
“You need a blue-riband property for marketing purposes but it’s the 24/7 coverage that you will make your money from,” says Marc Thomas, head of product at SIS. “The blended rate works because the cheap stuff can be more profitable. So, you take all the product on offer, even if there is redundancy.”
Ivor Jones, analyst at Peel Hunt, agrees, suggesting providers such as Sportradar and Perform are vital to the bookmakers they supply. “What matters is that people have enough events to bet on,” he says. “The gathering of data – and the streaming – are very important to them.”
Such is the situation for the past five or more years. Yet, outside the sports betting bubble the world of streaming – whether it is sports or more generally in the world of entertainment – is in the process of evolving further, and the changes being wrought are sure to have an impact on the gambling industry.
A matter of months before Perform broke new ground with its Ukraine v England broadcast, in the world of music Spotify raised US$50m in a Series B investment round. The cash was needed to persuade sceptical music companies to give access to their catalogues, a necessary step for streaming to become recognised by the public as the primary channel for their music consumption.
Thirty million subscribers later and still climbing, the Stockholm-based company is well on its way to achieving ubiquity in the music streaming world with a must-have app tethered to millions of mobile phones.
Now sport is potentially heading down the same route. The social media giants are experimenting with sports content. Twitter has announced deals in recent months to broadcast live NFL games and EPL highlights while Facebook is also pushing its Live product which has obvious utility when it comes to sports content.
And dedicated sports streaming services are already with us. Sporticle has emerged in the US and back with Perform, the company has recently announced its DAZN sports-streaming offering which is being made available to subscribers in Germany and, soon to launch, in Japan.
The evidence from the US is that the broadcasting market is developing at speed. In the year to June, pay-TV channels lost over 800,000 customers as cord-cutting took its toll, according to data from Jackdaw Research.
Keeping the attention of the Millennial audience (brought up, lest we forget, on free-to-access esports on streamed channels such as Twitch) is a task facing broadcasters, rights holders and bookmakers alike.
Yet, as a Perform Group insider suggested, though the conversations with sporting bodies and federations go well beyond just the provision of streaming for bookmakers, the current leading providers have positioned themselves for the negotiations to come.
“There are definitely advantages in being involved in multiple conversations with these people across data rights, across video, across Watch&Bet (in the case of Perform),” the source said. “That’s not to be underestimated.”
Debus points out that an opportunity now exists for Sportradar and others to offer end-to-end deals with sports-rights holders, or as he puts it, “maximum flexibility”, depending on whether the conversation turns to streaming, data provision or integrity issues. He also sees particular opportunities in enhancing the product that is delivered to the bookmakers.
“What will change significantly is the combination of streaming and data and the power to further develop betting applications,” he says. “We will see more technology-driven changes and the overlaying of streams with content. That will provide differentiation.”
The widespread consumer interest in sport makes change all but inevitable, and as with music before it, the corralling of illegal downloading into mainstream paid-for streaming might be a process which is already under way.
This will throw up its own challenges but it also has the potential to transform how people view betting, particularly in terms of mass-market consumption.