The game has changed. In the last decade, many of the biggest telco companies have moved into sports by hoovering up exclusive content rights. And with telcos of all shapes and sizes working hard to avoid being labelled ‘dumb pipes’ in consumers’ minds, these investments are only going to increase.
That’s good news for their subscribers. The benefits telcos get by moving in these circles are clear, too. Sports content appeals to a ready-made, loyal fanbase - so much that BT splashed $1.4 billion on UEFA Champions League and UEFA Europa League coverage in 2017. Australian telco Optus invested close to $300 million for two cycles of the Premier League. And in North America, Turner Sports, owned by AT&T, pays on average $1.2 billion a year for the NBA.
Sports content has long been a vehicle for service providers to gain market share and keep subscribers on board. But competition is always increasing from disruptive online-only newcomers, and traditional broadcasters have their substantial foothold as well. On top of this, consumer expectations have risen. Telcos are also having to stump up truckloads of cash to roll out 5G. And premium sports properties will be up for grabs again in the next three to six years, which could upset the applecart even more.
The question, therefore, is what can telcos do to stand out from the crowd? And how can they use sports to grow ARPU? The answer is two-fold: taking advantage of 5G investment to deliver a deeper user experience, and repositioning video as a core operator service.
5G investment sparks mobile video opportunity
With 5G just around the corner, telcos are at a critical juncture. The money pumped into next generation networks will be substantial for years to come. It stands to reason they will need to take full advantage of high-value assets (like premium content) to help recoup those costs. 5G, more so than any network technology before, can support this goal.
New consumer research about the expected impact of 5G upon sports content consumption shows, in 2019, one-third of consumers already watch over four hours of sports content on mobile each week. Nearly half expect their consumption to go up significantly in the near future, particularly as mobile devices get bigger and the handheld experience improves.
If over 30% of consumers watch four hours of sports content a week using 3G and 4G, it should come as no surprise that 5G will bolster these figures. Consumers see 5G as being able to deliver the high speed, low latency promises of previous technologies. A faster and more reliable data connection is fundamental as a building block for the future of content consumption, so telcos are at the heart of the digital transformation taking place in sports as a result.
The next generation of sports technology, as underpinned by 5G, will soon help sports providers open up new viewing opportunities for fans through VR and AR, real-time data capture and distribution, live betting, and, most importantly, to-the-second synchronised content between mobile devices and the live game.
Positioning video as a core telco service
But simply rolling out 5G is not enough for telcos to secure a long, profitable future in the sports arena. They must reposition video as a core service, harnessing the direct-to-consumer relationship in a deeper, personalised way through greater control of the user experience. Sure, telcos are already in the game, but the competition has taken several strides forward in recent years to double down on improving the user experience and drive immersion.
Investment will need to take place here, too, as a result - particularly as mainstream sports providers are investing heavily into their own OTT technology. It is expected that $6.8 billion (or 15% of their total budgets) will be spent by sports providers on the OTT tech stack by 2021, meaning 5G spending needs to be coupled with enhancements to the capabilities of a telco’s sports streaming service at the same time.
A sizable chunk of this spend will be to improve the user experience for fans, bringing them closer to the action. As sports providers are making this leap, telcos will need to offer the same high-quality experience. Otherwise they risk not seeing the huge return on content spend that premium sports rights can provide.
Getting the tech stack right
Today’s viewers expect to be able to access content from anywhere and on the best device at their disposal. They expect their experiences across devices to be seamless and also expect a highly tailored, personalised offering. As sports is an emotionally charged experience, having the insights in place to better understand the audience - from the casual committed football fan to the die-hard F1 fanatic - is now essential for any sports provider to improve stickiness and make future decisions into what premium content to invest in next. Telcos, more than any other media provider, are in an elevated position to get this more rounded view of the consumer.
Coupling analytics that track mobile and broadband usage can help glean behavioural insights into purchasing patterns, spending limits, usage, demographic, and more, which is important for achieving the deeper user-level personalisation needed to stand out in what’s become a crowded market. Introducing an advanced (and tailored) user experience platform to the mix will enable telcos to go further, making it possible to take advantage of those data insights in real time to put the right content in front of the right subscriber, on the right device, at the right time, and in a way designed to interest them most.
This approach is the rocket fuel necessary to supercharge what a telco’s service can offer. By having the platform flexibility to tap into the emotionally charged sports experience their subscribers are after, telcos can apply these insights across the board - whether that’s increasing ARPU by upselling a subscriber on other sport-related services such as live match betting, or using sport as a hook to encourage them to sign up for a more expensive broadband package. Get this right, and it’s possible to build a subscriber base that is as loyal to their provider as they are to their favourite team.
The future for telcos in sport
The future of sports content delivery looks bright for telcos. When it comes to media, consumers come for the content but they stay for the experience. Telcos have a wealth of data at their disposal and the opportunity to use 5G as a vehicle to position themselves at the forefront of delivering a next generation experience for the future of sports. They also have built-in distribution, audiences and billing, putting them in a potentially strong position to become distribution partners for other D2C OTT services (something we have seen growing rapidly over the past 12-18 months).
With mobile consumption increasing, telcos can enhance their own video services to double down on this market. And with 5G just around the corner, it’s a chance to hit the reset button on the competition. Now is the time to make those investments into OTT video, helping grow the bottom line in years to come.
