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How The War Over Sports Rights Will Change The Media Landscape

October is the rare equinox in American pro sports, with baseball, basketball, football, and hockey all in full swing for a precious few weeks. As tech companies make a play for the TV rights to sporting events that were once the exclusive purview of traditional media conglomerates, sports viewing is on the cusp of reinvention. Players like Amazon, YouTube, Facebook, Twitter and others will bring not only unique, on-demand viewing environments to the realm of sports, but also notable changes in how our favorite sports are going to look and feel. And they will push the traditional networks to reinvent the live experience.

By 2025, everything you currently know about where and how you watch the world's biggest sporting events will have changed.

More Competition Puts More Money in Play Which Drives More Fan Engagement

Let’s start with the obvious fact that the entrance of tech platforms into the sports broadcasting arena brings a considerable number of new players to a space where only a few established players have operated in the past. Simple economics dictates that, with more players in the mix, bidding for sports TV rights will become more competitive. More competition will lead to more lucrative contracts for the leagues, and that means teams are going to have more money to spend on their players.

In short, we can expect to see some serious record-breaking when it comes to the size of high-profile player contracts in the next few years. And, in turn, the value of players and franchises to brands will rise commensurately as fan engagement reaches new heights. Looking at the biggest live sporting events from the past year – MLB World Series, NCAA Football Championship, NFL Super Bowl, NCAA Basketball Championship, NBA Championship, Women's World Cup, Wimbledon, Cricket World Cup, and Rugby 6 Nations – 4C tracked a 742% increase in social media engagement on average for the days of the events. This trend will only continue as players’ wallets get fatter and personalities get bigger.

As Cable Bundles Unravel, Cord-Cutting Rises

The digital-only nature of the players currently entering into the live sports realm has big implications for cable providers. At present, live sports is one of the main programming reasons that many people are still maintaining their current cable bundles; that’s why the rising cost of sports rights accounts for roughly 40% of programming costs paid by TV networks . As live sports migrates into new digital distribution methods and platforms, casual viewers will follow. In other words, we’re going to see an entirely new batch of linear viewers (including your parents) convert into on-demand viewers and OTT cord cutters. This is a trend already well underway with offerings like Hulu, ESPN+, and YouTube TV, each of which has made access to live sports content a central pillar of their value prop to consumers.

Sports Advertising Formats Will Be Forced to Evolve

As more OTT platforms get into the sports game, we’re going to see on-demand viewing, particularly on mobile devices, rise precipitously. This is important because the content consumption habits of people on these devices, and on OTT platforms in general, are quite different than with standard linear television. Importantly, OTT and mobile viewers are a lot less tolerant of the interruptive ad formats that are currently the hallmark of many sports viewing experiences.

The migration of live sports onto OTT platforms will create an incentive for leagues to provide more in-game advertising opportunities, enabling them to limit the number of traditional commercials that interrupt the viewing experience. Expect to see more jersey sponsorships and on-field advertising in the coming years, similar to what you see today with soccer and NASCAR, which are already less conducive to interruption.

A Whole New Type of Advertiser Will Enter the Game

On OTT platforms, advertisers are able to target by audience in ways that have been impossible under the traditional sports viewing paradigm. This opens up advertising around these events in entirely new ways.

Expect to see a lot more local promotions, even on national broadcasts. And expect to see ad campaigns with more-specific calls to action based on what the brand might know about the person watching its ad. Because OTT viewing occurs over digital pipes, such habits can be correlated at a user level with other online behaviors, and that means that TV ads of the future will reflect a much richer understanding of the consumer’s history with a given brand. That’s the advantage of TV’s emergence as a data-driven medium: marketers can plot these impressions within the increasingly precise coordinates of an ever-more-intelligible view of each consumer’s individual journey. The ads they show you will be based on this knowledge, and will be more specific, more individualized, and more targeted than the TV ads of old.

Your TV Ads Will Look More Like Your Online Ads

There’s a corollary to new types of companies advertising around major sporting events, and that’s the fact that a lot of those advertisers are going to be the ones that, as of today, are most sophisticated at marketing to people online and on social platforms. These brands – largely direct-to-consumer – will be extending their reach to live sports because, increasingly, they’re going to be able to make these ad buys based on the audiences and individuals they want to reach, rather than buying ad real estate around just a specific event (and whatever audience happens to come with it).

In other words, the ads that follow you throughout your online journey based on your browsing and shopping patterns are going to follow you into your sports viewing experiences as well. In this new live sports reality, the best advertisers will be the ones who are still able to make these ad experiences uniquely interesting and valuable to you in the context of the sporting event you’re watching.

In the final analysis, it always helps to remind oneself of the changing nature of media consumption. After all, marketers are going to great lengths to deploy media the way the way consumers consume it. Sports are the most consequential microcosm of the broader trends in how the equation has fundamentally transformed in the era of digital. Over the next three to four years, this transformation will accelerate and become more visible than ever before. It won’t be long before these changes transform the product itself, with different ad breaks, different ad formats, and more targeted ads – not to mention better games.

4C is a global data science and marketing technology company that delivers self-service software for brands to execute video-centric marketing and optimize business outcomes.