New Data on Sports TV Viewing: Turning the Bubble into a Better Bundle

by Brian Ring, Contributing Editor

What if there really is a sports TV bubble? Can we grow consumption of sports TV so that it doesn’t pop? After all, a bubble is just a ‘stretch goal’ for our industry. And if we urgently need to expand sports TV viewership, how should we do it?

To answer strategic questions like this, we need data. Sports TV viewership data, specifically, which is remarkably hard to find if you’re not a Nielsen subscriber. As my readers know, I’m a research nerd, and so took it upon myself to use yet-another disruptive survey platform (called Survata) to get some noteworthy results.

My survey divided respondents into five segments based on sports TV consumption. Digging into those segments generated a few insights that I’ll share below.

For now, here’s the headline:

Between the sports-nuts and the sports-nevers is a big group of regular and occasional sports TV viewers. We need to nudge those people into more sports TV viewing.

We asked 247 respondents whether they watch sports on TV.

• 17% said “all the time”
• 19% said “regularly”
• 23% said “occasionally”
• 10% said “rarely”
• 31% said “no”

With this, we can see a framework for increasing sports TV viewing overall. We need to move ‘rarely’ viewers into the ‘occasionally’ box, ‘occasionally’ viewers into the ‘regularly’ box, and so on. OK, but how to execute?

In my view, the pay TV bundle – including the business models and technologies embodied by a well-executed TVE strategy – is actually the best asset we have to execute the kinds of consumer use cases that can drive meaningful increases in value for sports TV across the dial. (It’s true, such well-executed ‘Better Bundle’ strategies will require relationship ‘re-sets’ between Networks and MVPDs.)

But first: What’s this about a sports TV bubble?

Is there a sports TV bubble?
We’ve seen an explosion of sports TV channels, programming hours produced, and rights fees paid. In a recent report, Nielsen estimated 116 thousand hours of sports programming was made in 2013. This was an increase of 232% over the 2003 figure of just 35 thousand hours. (1) Impressive!

But the fact that struck me was this: 

During the same period, Nielsen estimated the collective hours of sports viewing increased by only 27%, from 26 billion hours of collective viewing to 33 billion.

In fact, other data also points to the possibility – or probability, in my view – that there may be an oversupply of sports content for today’s relatively mature & fixed TV viewership capacity (i.e. what we can think of as ‘demand’.)

In May, a CNBC piece combines Nielsen viewing data and SNL Kagan per subscriber fees to calculate the ‘theoretical a la carte cost’ of every cable channel on the dial. Among the 21 most ‘expensive-relative-to-viewership’ channels, 12 are sports nets. ESPN is #3, watched by 24% of the cable TV viewing audience on a weekly basis. Its theoretical a la carte price? $26 dollars a month. (2)

Then there’s the December 6 post on the Daily Beast. It’s a take-down of the pay-TV-bundle that details the recent woes of ESPN in the context of two oft-written-about challenges – shifting viewing habits and over-the-top distribution. (3)

Indeed, if there is an oversupply of sports TV, it starts with the market dynamics between MVPDs and the networks. Where does that stand in 2015?

• In April, Verizon offers a skinny TV bundle that excludes ESPN. ESPN responds with a lawsuit.
• In September, Pac-12 Networks rejects a final carriage proposal from AT&T/DIRECTV. Viewership data no doubt informed AT&T/DIRECTV’s math. It’s been (sparsely) reported that Pac-12 Networks has received 0 ratings by Nielsen for some programs. (4)
• In November, Comcast kicks YES Network off the dial citing set-top box data as proof of low viewership. (5)

Why does it matter? It’s a question of urgency & strategy.
Whether you’re an MPVD or a network, a bubble believer or a relentless sports TV bull, the right strategy going forward seems clear:

We need to bolster the fundamental consumer value of the undisputed cornerstone of sports TV – the pay TV bundle.

That means driving increased consumption of sports television content in all forms, on all platforms, and in all viewing environments – in context of the pay TV bundle. Today, this essentially translates to a Sports TVE App strategy.

One problem with the sports TV bulls? They tend to focus on the ‘pricing’ side of the content equation rather than on the volume of units sold (i.e. the ‘viewership’ side.) For example, they often cite the unique, DVR-proof nature of sports as a rationale for higher programming costs and ad rates.

But research I conducted in September suggests that 23M TV viewers may in fact be watching sports off a DVR on a regular and frequent basis. (6)

Rather than pretending this ‘time-shifted sports’ segment doesn’t exist, a TVE strategy might be to launch an uber-DVR service that super-serves this segment. Features like spoiler-free alerts and ‘condensed-catch-up-to-live’ would be a great way to delight sports fans of all stripes.

The overly bullish view also diminishes the urgency needed to act boldly. Viewership numbers are the fundamentals of the sports TV business. The healthier they are, the healthier the bundle is, the more that sports TV can sustain growth.

The Opportunity for TVE: Making Sports TV More Productive
And that’s where my new sports TV viewership data comes into play.

To recap, my data suggests that 17% of the TV viewing audience are ‘all the time’ sports TV viewers. Another 31.6% responded with a clear No.

That puts the percentage of the TV viewing audience that we can nudge into additional viewing at about 51%. Not a small number!

I suspect many of these fans have interest across sports, but can’t possibly follow it all. They may be displaced from their home team and not sure where to find broadcasts. And they’re probably terribly time-strapped. Worse still, they might indeed be (shh) fair weather fans.

Yet for these fans, the opportunity for a better TVE bundle is simple: Make it easier, faster, and more convenient to watch a wider variety of sports TV. In short, make sports TV viewing more productive.

How much influence can we have? To answer that, I surveyed my respondents on their overall interest level in sports and compared answers across my segments.

28.7% of the ‘occasionally’ segment was ‘very’ or ‘somewhat’ interested in sports, suggesting a 1/3^rd of ‘occasional’ viewers can be converted into ‘regulars’.

Similarly, 21.1% or more than 1/5^th of the ‘regularly’ sports TV viewers stated they were ‘extremely’ interested in sports.

Another interesting insight came from asking the following question:

Pretend that you had more time to watch sports TV. How would your sports viewing habits likely change?

The data suggests that increasing the productivity of sports TV viewing would not only increase viewership amongst the one or two declared ‘favorite’ sports, but that it would broaden viewership across all team sports and in fact all sports in general.

For example, 17.6% of the ‘all the time’ sports TV viewers would expand their TV watching across ‘all team sports’ – and 19.6% would watch more of ‘all sports’ as opposed to increasing viewership of one or two sports. Similarly, 17.6% of the ‘regularly’ sports TV viewers would expand their watching of ‘all team sports’ and 18.4% would expand their watching of ‘all sports’.

OK, but How? Four Simple Ways to a Better TVE Bundle
Here are some TV Everywhere use cases that leverage authenticated mobile and TV apps that might well have the capability to increase sports TV viewership for less-than-avid viewers stuck in the middle of the sports TV landscape. As mentioned before, all of these suggestions below require bold and innovative partnerships between MVPDs and Networks. But isn’t that how we built this industry in the first place? With the rights, content & creativity that the Networks have, and the impressive video tech plant that the distributors have, we can probably do amazing things.

• Challenge #1: Constantly shifting and uncertain TV schedules. Not only is it impossible sometimes to find when and where to watch for all but my favorite sports, it’s frustrating too.
• Fix: The primitive TV guide simply has to go. (Granted, I’ve been saying that for a decade and a half.) Thankfully, MVPDs like Dish & Comcast have taken the right baby steps by providing Sports-specific TV guidance apps, even providing real-time excitement ratings. Great! Let’s do more.

• Challenge #2: There’s a dire lack of usage & awareness of today’s TVE Apps – including Sports Network & MVPD versions.
• Fix: We’ve got to reinvent these apps from the ground up. Some UX experts argue that mobile notifications are the next new UX battleground. If that’s true, I need one app in control of my notifications. I need them tailored to my preferences and viewing credentials. There’s no point in trying to drive tune-in to a channel that I don’t get, and please don’t notify me of a score when you should know that I’m catching the game off the DVR tonight.
• Challenge #3: Sports is a vast, multi-dimensional landscape in our lives. So many different sports, leagues, teams, athletes, and games. All with rich, complex storylines that engage existing fans – but make it hard to access on a dip-in, dip-out basis for casual or single- or dual-sport fans with limited time.
• Fix: Sports TVE Mobile apps should be able to leverage the consumer shift to mobile and the digital shift to personalization. Where’s my Pandora-like drip of personalized headlines and video highlights? And why don’t they link to a fuller experience when it’s convenient for me? Sports is filled with magical storylines that have the power to get people excited enough to tune-in from the sidelines. We simply need to surface and curate those stories.

• Challenge #4: Highlights and instant replays have always been a key element to sports programming. But the rights issues are still a bit too sticky, despite the tremendous progress that has been made.
• Fix: We need to acknowledge, embrace and innovate on time-shifted sports viewing. In my view, that means more real-time highlights; vastly improved production value on recaps & condensed games; personalized, navigable highlight portals; and as I’ve said several times before, an uber-DVR service for working Dads like me, that cannot watch even 100 SF Giants games at 4 hours a pop. Don’t get me wrong: The leagues have been aggressive on this front in the recent past, with plenty of sports highlights in direct-to-consumer destinations. But still, I can’t seem to find a single app with a definitive, reliable catalog of highlights across all sports and tailored to my preferences. And I think that’s because it’s only commercially feasible within the context of that pay TV bundle.

The bottom line?

There might be a sports TV bubble, but it doesn’t have to pop. Let’s work overtime to increase sports TV viewership across all segments by making sports TV viewing more productive and accessible for all.

Notwithstanding all the pressures on the current pay TV bundle, a better TVE bundle it is the best shot we have to make a significant impact on this challenge.