LTS 2010: The Changing Face of the Digital Sports Fan

The recent explosion of streaming media and new devices has drastically changed the way sports fans consume content. Whether it is mobile devices, tablets, gaming consoles, internet-connected TVs, or over-the-top set-top boxes, the sports world is a very different place than it was just a two or three years ago. This has created a new kind of consumer that is no longer content with just sitting in front of the TV.

“We have seen a generational shift; what we call ‘people who had the Internet before they had sex,’” said Boxee VP of Marketing Andrew Kippen at the League Technology Summit last week in New York. “We have to keep in mind that this generation of 20-somethings and under are now expecting a completely different experience than what cable TV can provide. After you’ve had some of these [digital] experiences, it’s hard to go back and just sit in front of the TV.”

Cord-Cutting? Not So Fast
This new generation of content consumers has led to concerns over potential cord-cutting. Cable service cancellations look to be on the rise as wired-cable penetration of American TV households is at a 21-year low, according to new TVB Research. However, most sports fans still flock to the only place that offers high-profile live games – their television set.

“I think it’s going to be awhile before you see cord cutting adopted by consumers on a mass scale,” said Tara Maitra, TiVo, VP of programming. “The one piece of content you absolutely need to have live is sports and news and there’s no compelling service out there today that is a viable alternative to cable and satellite for that content.”

In fact, live sports and news may be the only thing keeping many viewers from pulling the plug on their cable subscriptions. Recent research by ESPN found that heavy or medium sports viewers showed zero cord cutting and currently account for 83% of sports viewing.

“Sports is obviously a huge driver in the business,” said Kippen. “It is the content that people are most passionate about on TV. Right now, that sports content is helping prop the cable and satellite companies up. If that content was available online [for in-market consumption], I think we’d see a lot of people switching over.”

Tracking The Target
Among the most desirable aspects of this changing landscape is an increased ability to track consumers’ habits and target advertising. MLB’s popular streaming service, as well as other live out-of-market streaming services by major sports leagues, can utilize subscriber information to target advertising based on team affiliation, demographic, or region.

“At MLB, we are fortunate to have a one-on-one relationship with our consumer,” said Kenny Gersh, MLB Advanced Media, SVP, business development. “We have their email address, we know what market they’re in, and we know they’re a baseball fan. We’ve worked with targeted advertising and we will do more of that in future. Advertisers are starting to ask about that more and more.”

Free Hardware…with Strings Attached
This fall, an onslaught of Internet-connected living-room devices has hit the market, including Google TV and Apple TV. These devices are competing with devices from Roku, Boxee, and others that have been on the scene for years.

A growing number of over-the-top services are offering their hardware for free with a long-term subscription – a strategy utilized for years by traditional television distributors.

“The cable and satellite model has been giving boxes away for free or extremely cheap for years and then selling a subscription tied to them,” said Scott Hershkowitz, NBA director, digital media. “Giving away hardware as a way to attract subs has been happening for years and I don’t think that’s going to change any time soon.”

What’s Next?
As the issues of content rights and user adoption begin to become clearer over the coming months, the living room may take on an entirely new dynamic; one in which users interact with their video and television like never before.

“Where we are right now is just taking the game and putting it on the Internet,” said Kippen. “I think that is a very natural progression. You saw the same thing from radio to TV. They filmed radio productions being made and those were some of the first television shows. In the same way, we’re taking TV and putting it on the Internet because that’s what we know works.

“Over the next few years, people will start to create really create unique interactive experiences that can only live on an IPTV platform,” he added. “That will greatly increase the rate of adoption.”

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