Report: Streaming Services Will Spend Over $8 Billion on Sports Rights in 2023
As pay TV continues to flounder, streaming is picking up the slack. That’s true in all facets of the television industry, but it’s becoming increasingly true in the sports world. A new report from the London-based market research and analytics firm Ampere Analysis demonstrates how streaming is increasing its footprint in the sports media landscape.
The report states that over-the-top (OTT) subscription streaming services will spend $8.5 billion on sports rights in 2023. That’s a 64% increase from 2022 when such services spent a combined $5.2 billion on sports rights. The increase will be led by North America, where the NFL’s out-of-market games package NFL Sunday Ticket will move from a linear TV provider in satellite company DIRECTV to the live TV streaming service YouTube TV for the first time.
The Sunday Ticket deal, along with Apple’s agreement with Major League Soccer to become the streaming partner for the league for the next 10 years, will lead the way for sports rights deals in 2023, but the data shows streaming investments in sports will be industry-wide this year.
Ampere predicts that the share of spending on sports rights by streaming platforms will increase in 2023 to reach 21% of global sports rights investment, up from 13% in 2022. Leading the way for streaming platforms’ growing investment in sports rights — particularly in Europe — is DAZN. The global OTT sports streaming service accounted for more than half (54%) of all subscription OTT services’ spend on sports rights in 2022. In the United States, Prime Video led the way in its first year as the exclusive streaming home of “Thursday Night Football.”
Some streaming services might outspend even Ampere’s predictions in the coming years. Prime Video could become a major player for the streaming rights to NBA games when that league’s media contracts expire after the 2024-25 season, and Amazon is reportedly looking into acquiring the rights to the Pac-12 conference as well.
“The transition to streaming will take longer for sports than for other genres,” Ampere’s Research Manager Jack Genovese said. “This is in part because of the nature of sports rights deals, which typically span multiple years. It is also due to the sheer value of sports rights, and the sensitivities characterizing the distribution and consumption of sport. The need for high quality, low latency feeds will continue to favor risk-averse behavior among broadcasters and rights owners alike. However, streaming will offer opportunities for sports to experiment with content, distribution and monetization, which will revolutionize the way in which sports rights are sold and bought in the future.”
Genovese’s point about low-latency feeds is a good one, but it’s one that streamers are already working hard to address. Prime Video recently offered a preview of its technology intended to reduce latency in sports streaming, and the NBA slashed latency by 70% before the start of the season on its out-of-market streaming service NBA League Pass.
Streaming services are still not ready to completely take over from linear TV, and it will likely take a few more years for the major sports leagues to leave broadcast and cable behind. But the change is definitely coming, and many streaming services are ramping up their rights spending now to be on the ground floor when more leagues are ready to say goodbye to traditional television.