NBA Commissioner Adam Silver Sees D2C Play as a Key League Initiative

NBA Commissioner Adam Silver laid out a vision for league production and distribution at the SportsBusiness Journal’s World Congress of Sports that will see the league engage with fans in new ways and, most importantly, on new devices and services.

“Probably the biggest issue for us right now is we are a sport that’s heavily on cable which has had enormous amount of disconnects over the last decade,” he said. “Something like 20 percent fewer homes receive cable, but it’s much worse than that and is closer to something like 30% fewer viewers because many people are just using broadcast or cable connection to get broadband.”

Part of that transition will also require a change in how events are produced as the goal will be to offer more personalization something that has been lacking to date due to the functionality limits on cable set-top boxes.

“High definition has changed everything but other than that, it’s still essentially a standard broadcast,” says Silver. “And part of the limitation was of course technology. It wasn’t that the great broadcasters and distributors out there didn’t want to change it, but they were locked in. And I think as we now move to more of a direct to consumer model what will come with that is personalization and customization.”

Part of the urgency is because fans in the coveted 18-34 demo are especially disengaged from relying on a cable set-top box to get their content. Instead, they are leaning into streaming services.

“You could argue that the bundle is just being recreated through these streaming services,” he said. “But putting that aside, I think at least for now, clearly the bundle is broken.”

What is the solution? Silver said that as the NBA moves into the direct to consumer market, they would very much like to have their digital rights.

“My long-term view is that we need to be in the direct to consumer business,” he said. “Exactly how it manifests itself I’m not sure and it may be that in certain cases we’re part of multi-sport offerings. In other cases, it may be an NBA standalone [service] as we have now with our League Pass product.”

“It seems pretty clear that’s the direction and I think that’s what our fans are going to demand,” says Silver. “They want deeper, richer, more personalized content, and we have to respond to the market.”

The great news for everybody, he added, is that people of all ages are devoting more time than ever to watching a screen.

“They’re watching streaming services and whatever they can watch on their phone,” he said. “We’re a little bit caught in the switches right now and we’ll work through that with our partners. And I think that where we end up will be a much better place. But we’re going to have to work through that transition.”

Helping in those personalization efforts will be the use of smartphones and other devices that offer new ways to tell stories.

“We’re learning how to produce events in a very different way, much less expensively, much more intimately,” says Silver. “What we’ll see now in the sports industry is people rethinking how they can create some incredible content. In some cases, it’s using iPhones or smartphones so intimacy can come through. There’s a huge desire and demand for deeper content from our players and from the activities around the league. I think it’s going to take us in a whole new place, especially as we move to more, to a direct to consumer relationship.”

Silver also discussed sports gambling and its ability to also drive fan engagement. The biggest issue is that without federal oversight of sports gambling anyone looking to get serious about it on a national level quickly will find themselves dealing with dozens of entities.

“Roughly 30 states have some form of legalized sports betting and if you are a content creator provider like we are you’re dealing with 30 different jurisdictions which is a bit of a trap sometimes,” he said. “You can have somewhat of a race to the bottom where no jurisdiction wants to be overly restricted or too heavily regulated because then people go elsewhere. You see that a little bit in DC, we’re its more regulated than in Virginia. So, I do think there should be national framework here. I don’t think it’s on the top of anybody’s agenda in Congress right now, but I think we would be better off in a few years to legalize sports betting.”

He points to how European soccer leagues which have made the transition from betting parlors to online gambling which offers safeguards against irregularities and corruption.

“Online people have to identify themselves and they’re using credit cards, he says. “And just like with insider trading, computers are highly sophisticated and if they’re detecting irregular activity the flags go off and they can tell leagues or other governing bodies. There’s a lot of bad that could happen from this but, on balance, you can’t turn the clock back. I think we’re a lot better off with a regulated, transparent framework.”

All of the efforts around personalization, gambling, and next-gen services are focused on one thing: making sure NBA fans are more connected than ever.

“[All the leagues] need to focus on this in our own way but we really need to find ways to make sure that coming generations of fans aren’t just fantasy fans or fans looking at highlights or what our players are doing off the court,” he said. “We want them to make an appointment to say there is a game on tonight at nine o’clock and I want to be part of that experience.”