The Guardian reports that there is soul-searching and head-scratching among pay TV providers who are seeing a decline in English Premier League viewership. Figures are down by 20% for Sky Sports, while BT Sport has experienced Champions League viewership that was down by 40% on the equivalent day last year.
Football is not the only sport to be experiencing this decline. In the US, ratings for NFL matches have declined by 11%. Attempting to explaining this decline, NFL commissioner Roger Goodell said, “A lot of times, people will leave a game for whatever reason.” Feel that insight.
"A lot of times, people will leave a game for whatever reason."
That guy sounds like he knows what he's talking about. https://t.co/2BrjqqAfdl
— Duncan Stephen (@DuncanBSS) October 19, 2016
For both the EPL and the NFL, the powers that be can only point vaguely at a number of pet theories. But the idea that the US presidential election campaign is making people want to stop watching sport seems more than a little far-fetched.
In Britain the broadcasters have singled out the weather, of course. British weather, so hard to pin down, is always the UK’s go-to factor to blame for anything you don’t really want to explain in case the answer hurts.
Sky Sports managing director Barney Francis attempted to talk up the viewing figures of other sports, claiming: “Viewing of F1… is up strongly year on year.” But for those who follow Formula 1 closely, this claim rings absolutely hollow.
F1 has been facing up to declining ratings for a number of years now. The sport even has new owners, Liberty Media, who have vowed to reverse the decline.
Yesterday’s US grand prix attracted just 1.8 million viewers in overnight figures — including both Sky’s live coverage and Channel 4’s highlights. This is the lowest rating for any grand prix in over ten years.
Sports of the TV era are becoming irrelevant in the digital era
Each of these sports have been shaped immensely by the explosion of mass media in the final decades of the 20th century. The NFL’s Super Bowl became the annual US TV event. The English Premier League was designed to bring more money into football by leveraging the emerging power of satellite TV. And Formula 1 was transformed in the 1980s by Bernie Ecclestone’s ability to strike TV big deals.
These sports are all made-for-TV extravaganzas. Their formats are shaped almost perfectly for TV. The people who lead them have been focussed fully on TV because that is where the money has been.
Until now, that is. In an era where TV viewership is declining as a whole, these sports are at risk of becoming irrelevant.
I have written before about how Bernie Ecclestone’s focus on TV is going to be Formula 1’s undoing. Mr Ecclestone was an absolute master at making F1 relevant for the TV era. But his focus on TV has left him — and the sport as a whole — totally unprepared for the digital revolution.
I know less about NFL, but I get the impression Roger Goodell is in a similar position. His information-free commentary on why his TV ratings are falling off a cliff sound like a eight year old grasping to explain why he hasn’t done his homework.
Ticking time bomb of sports rights
This matters because TV companies have literally put all their money into sport. The received wisdom has been that live sport is one of the few genres of TV that people will still pay to watch live.
In an era of catch up, there is little reason to need a satellite dish or an aerial on your roof. When Black Mirror is on Netflix, and when Jeremy Clarkson is on Amazon Prime, old-fashioned linear TV is running out of steam.
As a result, the likes of Sky have diverted huge resource into securing sports rights. The idea is that people will still pay for the experience of watching sport live, if nothing else. There are few other programmes that benefit in such a way from being watched live.
TV companies have shelled out £8.3 billion for the privilege of broadcasting the English Premier League over the next three years. This year, Sky inked a deal to broadcast F1 exclusively from 2019 to 2024 in a deal thought to be worth £1 billion.
Bernie's exclusive pay TV deals are a desperate last throw of the dice from a man who doesn't understand media beyond the dying TV industry.
— Duncan Stephen (@vee8) March 24, 2016
At the time I voiced my concerns about the length of that deal. TV may be important to F1 today. But how could it possibly still be so relevant eight years from now? Consider how much the media landscape has changed in the past eight years. There is no way we will be watching sport on TV in the same way in 2024.
There is one sense that audiences are simply changing the way they follow sport. As the Guardian says, “the relevant action and talking points can all be absorbed via osmosis on Twitter and other social media channels”.
But it is also difficult to see how these sports are going to attract new, young fans when you need to pay serious amounts of money to watch them. I know I would never have become an F1 fan if it was on Sky when I was a child.
My viewing habits have certainly changed since it moved to Sky. What was essential viewing for me ten years ago is now a coin-toss. Having eschewed the increasingly eye-watering Sky subscriptions, and with Now TV costing £6.99 a day, I can now happily miss races and switch off the television set and go out and do something less boring instead.
Your broadband infrastructure suffers as a result
Spiralling sports rights costs are a global phenomenon. But in the UK in particular, they have been driven by a war between Sky and BT. The reality of the situation is that BT has been blowing its vast resources on sports rights as part of a corporate ego contest.
BT should have been rolling out broadband across the country. It has been failing to do so adequately, leading to criticism from other broadband providers, Ofcom, and the culture, media and sport select committee. Instead of providing vital infrastructure to the country, BT has been ploughing billions and billions of pounds into sports rights.
(BT’s rationale for this has literally been: if Sky are going to get into our territory by offering their customers broadband, we’ll get into theirs by buying sports rights. Grown up, huh?)
Do declining TV ratings signal the end for linear TV?
The recent declines in sports viewing figures could just be a blip that the broadcasters can ride out. It is too early to say if these are the signs of the end of the sports rights bubble.
But with Sky and BT having ploughed so much money into sport, they have bet the house on people still being willing to pay to watch sport on TV. But broader trends of declining overall TV viewership surely make this a risky bet.
[…] Is the TV sports rights bubble about to burst? (Duncan Stephen) […]
Sky has access to the viewing figures for things like Now TV and Sky Go… …which they don’t issue to the public, nor to BARB. So it is not clear whether Sky is the only broadcaster not getting huge falls in the sports TV viewership or if it’s simply talking through its hat.
I can tell you that it’s not just money that’s causing F1 to lose out (though it’s not helping – many working-class people simply can’t justify a personal pay-TV connection, and the number of people who are completely without live TV is increasing slowly, despite the TV licence now covering BBC iPlayer also). There’s also the matter that if you want all the pay TV content out there, you have to have three mutually exclusive providers – and two of those are necessary if you want what would otherwise have been the headlining F1/MotoGP combination. Also, many people don’t yet have access to a broadband fast enough to support pay TV, no matter how much money they might have.
BT’s excuses for not rolling out better broadband infrastructure are pathetic from a contractual viewpoint, but unsurprising from a commercial one – it loses money when it rolls out better broadband, but gains a (decreasing) amount each time it buys out a sports right, and also inconveniences Sky, which it regards as a goal in itself (as it worries about Sky taking over its work entirely – corporate survival instincts tend to elicit strange behaviour).
This Article was mentioned on duncanstephen.co.uk