The market for interactive sports coverage is set to undergo massive expansion in coming years and new revenue streams will generate almost $3 billion worldwide by 2008, according to a new report issued by Screen Digest.
Sport was, until recently, regarded as an unstoppable bandwagon and media companies showed a particular inclination to hop on board, believing that broadcasting rights amounted to a licence to print money. Many of these same companies have since had their fingers burnt and declining audiences coupled with a fall in the value of sell-on rights have forced broadcasters to investigate alternative sources of revenue.
The CNN/Sports Illustrated cable sports news channel has been one of the high profile victims of the recession and many media companies, including Disney, have been forced to make cutbacks after excessive spending on broadcasting rights. In Europe, the likes of ITV and KirchGruppe overinvested and football clubs have felt the knock-on effect of the recent economy drive.
However, the arrival of new technology offers some hope to the sports industry. A survey of 1,000 professionals in the business found that while free-to-air television is still seen as the best medium for sport, interactive television has more potential in terms of alternative revenue opportunities. Respondents were less than enthusiastic about mobile and dial-up internet services but cable broadband is considered a viable platform on which to show action.
The onus is on broadcasting companies to adapt their sports coverage to meet the needs of modern viewers and interactive TV is already starting to have an impact. In addition to subscription fees, there are opportunities for gambling, advertising, sponsorship and merchandising. Screen Digest sees revenues from these activities increasing from $81 million to $1.39 billion by the end of 2005 and soaring to $2.79 billion in 2008.
Far East audiences are particularly attractive to broadcasters as they are most likely to have access to cutting edge devices and show a appetite for top sporting events. The study forecasts that there will be more than 1.2 billion sports television viewers in the Asia-Pacific zone by 2008, watching a cumulative total of 655 million hours of coverage a day.
“The Asia-Pacific region is a forerunner for the adoption of new technologies and therefore may well set a precedent for defining new business models in the sports industry,” said Rachel Church, the author of the report. “In all likelihood we will witness Europe, North America and other regions following suit.”
