May 2024:
Former IPL exec Raman says sport must take non-live content away from social to boost D2C
Peak’s Denyer: Everyone earns from sport on social media, except the rights-holders
(Andrew Redington/Getty Images)
An expert in sports media distribution models has argued that sports bodies need to consider restricting the supply of non-live content to social media channels to better monetise their own direct-to-consumer offerings.
Sundar Raman, who was chief operating officer of cricket’s Indian Premier League for almost eight years, from launch in 2008 to November 2015, told SportBusiness Media this week that sports bodies were missing out on an opportunity and that huge numbers of likes and shares were almost meaningless in revenue terms.
Raman said: “A lot of content is sitting on social media in the name of marketing and fan engagement. It’s not monetised. It’s only monetised through a marginal benefit to sponsorship. The truth is that the only guys who make money on all the content that’s posted on social media are the social media platforms. You make nothing out of it.”
Instead, he argued, the content should be used on proprietorial platforms. “Any sort of content, highlights, clips, anything non-live, like behind-the-scenes content, can be a monetisable asset as part of a D2C offering. It’s a growth engine. You restrict the amount of content going to social media platforms, which are data-engineered so that you see what they you want you to see. Instead, you have a more focused destination for true fans.”
With the global sports industry experiencing arguably the most difficult period it has ever faced, rights-holders across the board are looking at how to increase, or at least maintain, the value of their media rights. In October 2023, Simon Denyer, founder of the Peak consultancy, and one of the founders of the DAZN streaming service, told SportBusiness Media that a major challenge for sport was properly monetising its video-on-demand non-live content.
He said that VOD currently accounted for about 0.3 per cent to 0.5 per cent of most rights-holders’ income. Given the massive consumption of such content, its value should be 10 per cent to 15 per cent of total income. He said most rights-holders – apart from the big US leagues – had not done enough to commercialise their VOD rights.
This week Denyer, who sits on the board of the Women’s Tennis Association and Volleyball World, the commercial arm of the International Volleyball Federation (FIVB), said: “Everyone’s making money off sport on social media apart from the rights-holders. The platforms are. The pirates are. There are loads of influencers who grab our content, repurpose it and get it sponsored. The Meta family of companies, along with Google, Twitter, TikTok – these platforms are actually undermining the revenue streams we have, because they’re not doing enough to remove piracy from their platforms. It’s a double-headed challenge: they’re not giving us a share of the ad revenue and they’re not helping us with piracy.”
The argument was supported by a leading executive from one major sports rights-holder, talking on the basis of anonymity. He said: “I am frustrated by it. We all invest in content, we put it on these platforms, and they make the money, we don’t, and we even need to spend money to boost the algorithms. It’s not a normal model. Why should we spend money on content, put it on Instagram, on Facebook, or whatever, not get money back from these platforms and then spend money with them to get more eyeballs on it? It’s a horrible proposition. That whole mechanism is horrible.”
The problem, he said, is that there is no alternative. “If we didn’t do it our sponsors would not be happy and our events would go under the radar. You need to build and maintain a base of new fans. How do you build a new audience? How do you create relevance for your property in the market? It is not an option for us just to switch off the investment in digital platforms now and go dark. Apart from the commercial side, we have a responsibility to promote the game. I just don’t really see the alternative, unfortunately.”
Do rights-holders have a choice?
The received wisdom is that while video-on-demand, short-form, highlights and clips do not drive huge amounts of media-rights income, it is essential to the marketing of a property and essentially an investment in brand awareness. Raman does not buy this argument.
“There is nothing to support the idea that this is driving marketing dollars,” he said. “Leagues and teams are putting it out for next-to-zero money. Social distribution becomes a self-fulfilling prophecy, where you feel that followers and engagements are hard metrics that you want to track. So you judge it by saying, ‘I have five million followers, or eight million followers, or 80 million followers’, or whatever it is. The fact is, it’s not monetisable.”
Raman’s answer is that there is more value in super-serving true fans than trying to chase potential fans or convince casual fans to become hardcore fans. And you can do this on your own platform.
“Fans want discoverability of content and authenticity of information,” he said. “If you want authenticity, discovery and quality and it is available on the official platform, fans know one destination to go to. They don’t mind registering. It’s a more difficult task, but a more fulfilling one in the long run. I think some rights-holders are slowly moving in this direction, like the NFL with NFL+, the IOC with the Olympic Channel and the Premier League with its globally syndicated studio programming.”
One major rights-holder said that reversing out of the established distribution model for VOD would be “harmful”.
Peer Naubert, chief marketing officer for Bundesliga International, the international arm of the German football league, said: “You need to look at the future. Our viewers are different today than 10 years ago, and they will be different again 10 years from now. The target group for tomorrow is on those channels. It would be harmful to suddenly not be present on those channels. What’s important is defining the right channels and the right strategy for each channel. Then you avoid a situation where you spend a lot of money, but don’t get any return.”
He added: “In terms of social media revenues, whether it’s short form, VOD or clips, we don’t make a fortune today. But you need to look at it as an investment in the future, because otherwise you’re going to lose relevance. This is the main currency we look at when we speak about those kinds of platforms and channels.”
Even experts who are committed to developing D2C see the dangers in withdrawing from social media. Murray Barnett, the former ESPN, Formula One and World Rugby executive who now runs the D2C Sport consultancy, said: “Great social media content keeps you higher in the consciousness of the sporting public. Whether it’s selling subscriptions to your OTT service, or more general marketing of your brand, you’ve got to be out there creating content for these different platforms. The simplest way to measure it is likes and shares, which is because those are the metrics that you have available to you. It’s a very imprecise way of saying you’re doing well or not doing well. Sentiment analysis is much more interesting: is the content that you’re putting out there really resonating? It’s not completely reliable, but it’s the next best thing that you have.”
The ‘funnel’ argument still largely holds sway among rights-holders and their advisers.
Daniel Cohen, who advises multiple sports bodies on their media-rights distribution strategies for the Octagon agency, said: “Social platforms are a key top-of-funnel engagement mechanism. If you were to put all game highlights behind a paywall on D2C it breaks from the age-old adage that you want to be where your fans congregate. If fans consume your highlights in mass on X or YouTube, then you should focus on how to work with those platforms to share in ad revenue.”
The key is getting the balance right between content on official and third-party outlets. “There should be a limit to the volume of highlights shared on social,” he said. “Perhaps one alternative is an interactive, customisable function on your own D2C, where a fan can create their own AI-generated highlight reel.” But this would not serve the casual fan simply seeking a few, select highlights, he said.
But the solution, Cohen suggests, may be recognising that the main value of freely distributed VOD is always going to be on the sponsorship side and working to improve the returns here. The agency advises its clients to “work in lockstep with a brand sponsor” to customise the VOD offering on a third-party platform.
“If you are able to authentically integrate a brand into your VOD content offering, beyond simply sponsoring the content, then you can generate revenue from the outset, as opposed to revenue share off ad sales, and create new, meaningful assets for brand partners outside of traditional media asset buys and experiential.”
Alternatives to the paywall
Denyer said that VOD should not all be put behind a paywall. But there are other models of monetisation that could be explored.
“You can’t just suddenly put it all behind a paywall, because it won’t work. I think rights-holders could work together with publishers, so highlights are available on news websites. About 15 years ago, [digital specialists] Perform had a product called ePlayer. This was before social media really took off and started incorporating video at scale. We would sell the highlights for leagues to newspaper websites and we would sell the advertising. Revenue from the ads was split between Perform, the publisher and the rights-holder. I think that is a model that needs to be re-visited. It was a fair split.”
He said YouTube was an exception to the general criticism of social media platforms, even if its parent company wasn’t.
“YouTube are at least trying. We do receive shares on ads on our channels on YouTube, and they allow us to do takedowns of pirated content. YouTube have been doing this longer and have put more effort into sharing revenue, and into helping combat the piracy on the YouTube platform – although Google haven’t done that.”
This article 1st appeared on Sportbusiness.com HERE
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