MUMBAI: The market value of sports media rights in the Asia Pacific is estimated to hit the $5 billion mark by the end of this year, according to a new report published by research firm Media Partners Asia (MPA).
As per the report – ‘Asia Pacific Sports: In The Age Of Streaming’ – the region will see a 22% growth from last year, due to an increase in demand for digital rights across sports, especially in countries such as India and Australia and for events such as the FIFA World Cup.
MPA expects the value to rise in 2019 due to events such as the ICC Cricket World Cup and the Indian Premier League in the country, largely being commercially successful due to the Indian market.
“In our view, the value of sports media rights across TV has probably peaked in Asia Pacific with the notable exception of India, where the market for linear channels remains robust and scalable,” said MPA senior analyst Srivathsan AR, the report’s main author.
“The proliferation of broadband is fueling the growth of online video platforms, with a number of players investing aggressively in sports rights.”
MPA divided the market for digital sports consumption in the Asia Pacific into 2 parts: Broadcasters with scalable distribution that are investing in digital rights for new and emerging platforms and those telcos and pure-play digital platforms that are monetizing tentpole rights through subscription, advertising and commerce.
When it comes to the first group, Star India for instance grabbed headlines when it paid a record Rs 163.47 billion to gain the Indian Premier League’s media rights for the next 5 years across the television and digital mediums globally. A total of 769 million people tuned in throughout the tournament, with a reach of 200 million on Hotstar which broke digital streaming records in the country with Akamai.
Although sports is not a favourite for pay-TV operators, OTT delivery is becoming the main driver of inflating the price of media rights as it opens up new opportunities for rights-holders as deals and negotiations get more complex in nature.
Online platforms currently contribute between 10-25% of the media rights value for a sports franchise, the MPA analysis revealed. Many of them are looking at the Asia-Pacific market for their long-term growth such as DAZN, Facebook, Twitter and Amazon Prime Video.
DAZN and Amazon are adamant to diversify their sports portfolio, with the former being more aggressive.
Australian telco Optus, meanwhile, has invested close to $300 million for two cycles of EPL football in Australia to drive customer acquisition and market share across its broadband services.
“We expect bidding for live rights to escalate across the region over the next two years as sports-based digital platforms drive viewership, especially in large ad-dominated growth economies such as India and Indonesia as well as big mature markets such as Australia and Japan,” Srivathsan added.
Sports properties are also considering direct-to-consumer services, with the NBA leading the way courtesy its own OTT offering, NBA League Pass. Formula 1, the Liberty Media-owned motor sports series, has entered the fray with F1 TV, a live Grand Prix OTT subscription service that went live in certain European and American markets earlier this year, though it remains a work in progress.
In Australia, the National Rugby League and Cricket Australia run their own services for fans outside the country. One Championship, the MMA event has also launched a free ad-based digital service.
“Many franchises share free highlights and archive content, although others are looking at more direct monetization, pioneered by the NBA League Pass.
“These services offer one-to-one and customized fan relationships that can drive engagement and merchandize sales. At the same time, small markets which are currently grouped alongside major markets in media deals may see better representation and consistency in delivery. NBA has also shown that a readymade service can help distribution partners augment their own packages rather than disrupt existing deals, although some leagues and federations may bypass traditional TV partners with their own direct-to-consumer plays,” Srivathsan signed off.
