Technology has made sports accessible to more people. It has also changed sports’ relationship with the most ardent fans
The International Cricket Council (ICC), cricket’s governing body, reported in its 2016-17 annual report revenue of nearly US$300 million, the bulk of which came from sale of commercial rights to ICC events such as the ICC World Twenty20 2016. While considerably less than the US$428 million that the Cricket World Cup generated in 2015, it underlined the sport’s appeal in specific markets.
The usual suspects of India, the U.K. and Australia make up the biggest media markets for the ICC, but a surprising entry now occupies the No. 3 spot on that list: the United States.
“You never expected the third largest media market for the ICC to be the U.S.,” said Unmish Parthasarthi, Global Head of Digital Sales & Strategy at the ICC, pointing out the rising number of affluent ethnic Indians in America that make up the U.S. market. “Technologies have emerged through the internet to address these niche communities. It’s one of the reasons why my licensees on the digital side are seeking my content.”
Just tech my money
Speaking at the recent SMU Centre for Management Excellence talk, “A ‘Match’ Made In (Digital) Heaven”, Parthsarthi highlighted the proliferation of smartphones as the crucial factor changing fan engagement with sports.
“Three years ago the ICC launched bite-sized updates of video during a live match window,” Parthasarthi explained citing how each over was chopped up into individual clips. “That is significant given time zone differences [so not everyone can watch the match live] and how not everyone has access to paid TV, but everyone has a mobile phone.”
When allied to the unscripted drama of sports, the sheer number of smartphones represent a huge market to not just to broadcasters but also to internet giants. Facebook in 2017 made an unsuccessful US$600 million bid for Indian Premier League (IPL) rights, which Rupert Murdoch’s Star India Sports won with a mammoth US$2.55 billion bid. Amazon, which has ATP tennis in its portfolio, was also interested but failed to make it to the final bidding.
While content is the lifeblood of broadcasters such as Star Sports, tech companies look at sports differently.
“Content costs for a [broadcaster] is the cost of doing business – they have to make money on the content,” explains Parthasarthi, who has experience in the broadcast industry. “For Amazon, all they are assuming is, ‘If I have cricket, then a given customer’s life cycle in the next decade is worth a hundred thousand dollars.’ So what they’re buying is not the content but access to my wallet. Once I’m in, there are recommendation engines, search results and all that that drive value.”
Sports as entertainment? No, sports is entertainment
Amidst spiraling costs of media rights, the imperative to attract a bigger audience to justify the outlay starts to affect the sport in question. Often that includes schedule adjustments to fit TV-watching habits for specific geographic markets (English Premier League football), other times it involves tweaking a sport’s format, as cricket has done with the shorter Twenty20 version.
Parthasarthi points out that casual fans who consume sports as they would any other entertainment offering make up the bulk of the market. Informed sports fans who actively follow sports form a relatively small portion of the sports-watching audience, while those he terms ‘fanatics’ make up the smallest segment, albeit a vocal one.
To fanatics who insist on sports being presented in a certain way, Parthasarthi says: “If there are less casual fans watching, the quality of the output [to please fanatics] will be compromised. The leagues are making money because casual fans are watching the product, because it’s a mass market proposition.
“It’s a virtuous cycle: the more it’s a mass market proposition, the more money there is for coaching, training, the quality of the circus go up tenfold. Otherwise it’d become like field hockey. This is fundamentally an entertainment business.”
Follow us on Twitter (@sgsmuperspectiv) or like us on Facebook (https://www.facebook.com/PerspectivesAtSMU)
Last updated on 03 Apr 2018 .
