Italy's Serie A could award its 2021-24 broadcasting rights tomorrow to either Sky or DAZN (backed by TIM) for a fee significantly down on the previous cycle.
Either outcome looks good for Sky: increasing coverage at a lower fee, or pivoting to aggregation as DAZN will need to access Sky’s subscriber base.
DAZN and its ally TIM are also shifting strategy, but with weak rationale. The Italian auction reinforces our expectation of a drop in Premier League fees in the imminent British tender.
The games industry enjoyed a robust 2020, with the pandemic creating high demand across titles and platforms. Now a core part of the mainstream media and entertainment ecosystem, games share of entertainment spend and audience viewing time will maintain momentum and increase in 2021.
The demand for, and value of, premium content has migrated to game IP, with top franchises driving increased M&A activity and tighter integration with film and TV output, and providing an important advertising channel.
The pandemic has provided breathing space for the industry on regulatory scrutiny of revenue models, and overall consumer safety. Regulators need to increase their speed in 2021, and act decisively on predatory ‘free-to-play’ game mechanisms.
The value of certain sports rights can be appraised through three major metrics: the ability to command viewing/engagement, the ability to drive subscriptions incremental to other rights, and the propensity of those subscribers to provide the rights holder with additional revenues.
In this report we examine these three metrics in order to gain an understanding of the tensions in the market, along with the reasons as to why there is competition (or not) for certain rights.
Unsurprisingly, outside of a few primary sports rights, there are an abundance of secondary rights which find it difficult to display their value over others. Their value relies just as heavily on whether rights holders are committing to, or retreating from, major rights.
Sky made a surprisingly weak start to 2019, with revenue growth decelerating to 1.9% (the first time below 4% since the European businesses merged in 2015), due to weaker ARPU trends.
However, Sky expects improvement to follow, blaming one-off factors in the quarter. The ARPU weakness drove EBITDA down 11.3%, but this should bounce back across the rest of 2019 as football rights costs turn from a drag to a positive.
Comcast highlighted collaborations with Sky across tech, advertising, content distribution and even news, stating it is on track to achieve the anticipated $500 million in annual synergies over the next couple of years.
Google’s Stadia promises the most credible game streaming service yet, but building a subscription bundle of top titles would require an all-out bet in the sector
Google is building its own game studios – to win over others it must overcome a troubled history in gaming, mitigating risks to developer business models and creative integrity
Games are much more technically demanding to stream than video, presenting an advantage to Google, Microsoft and Amazon – and a boost to telecoms network demand, welcomed by operators
Amazon’s recent deals with Apple in TV, music and device sales mark a turning point after a decade of frosty relations
The context for this involves shifting priorities at both firms, growing pressure on Apple’s iPhone business, and rivals in common — first and foremost Google, but also the likes of Netflix and Spotify
The uneasy alliance helps both companies consolidate their strengths in the platform competition over media and the connected home — but trouble already brews