MUMBAI: Here is a piece of news that should make MAX, ESPN-Star Sports and Ten Sports sit up. Interactivity is expected to increase the revenue streams for sports broadcasters in a major way. The global sports industry is expected to undergo rapid transition as it explores new opportunities in broadcasting. These findings are contained in new report released by Screen Digest, The Global Business of Sports Television.
With the introduction of technologies that facilitate this form of communication between the viewer and the broadcaster, monies will increase in related areas such as gambling, advertising, sponsorship and merchandising revenues. Over the next two years these new revenue streams are forecast to increase substantially reaching $1.39bn by the end of 2005 and $2.79bn by the end of 2008.
It may be recalled that at last week’s FICCI FRAMES Convention held in Mumbai, India, ESPN-Star Sports (ESS) MD Rik Dovey spoke on a cricket match being presented in different ways by 2008. Viewers could watch a match from 15 different angles, catch the daily highlights within a span of five minutes.
It is the belief of Indiantelevision.com that when the next World Cup arrives to the West Indies in 2007 pay-per-view models will be in place and so the number of viewers watching the tournament then as compared to at the moment may decrease.
A recent survey undertaken for the report of 1,000 professionals working in the business of sport worldwide concluded that while free-to-air television will continue to offer the most opportunities for sport in the future, interactive television will offer more in terms of alternative revenue streams.
The survey respondents shared the view of Formula One’s Bernie Ecclestone and the International Olympic Committee that the Asia-Pacific offers sport the most promise as a region in the future. The region is experiencing the most growth in terms of key technologies such as broadband and wireless telephony equally enhanced by a large population of sports-friendly consumers.
The author of the report Rachael Church said: ” 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. In all likelihood we will witness Europe, North America and other regions following suit. The report predicts that there will be over 1.2bn sports television viewers in the Asia-Pacific region by 2008, watching a cumulative total of 655 mn hours of sport daily.”
Church added: “At the same time the broadcasting industry must revamp its traditional coverage of sport and identify new ways to engage viewers if it is to reverse the current downturn in audiences as sports properties increasingly become less dependent on sports rights. “
The report has taken note of the fact that sports broadcasting is at a crossroads. Television audiences for certain major sports have decreased dramatically over the past few years.
In India of course besides cricket the only other sport that seems to be hooking viewers for a lengthy period of time is wrestling courtesy Ten Sports. Furthermore, the industry has faced an escalation in television sports rights and witnessed the collapse of key rights agencies. In the US many pay-TV sports specific channels and networks have ceased operations including AOL Time Warner’s CNN/Sports Illustrated cable sports news channel due to over-spending on sports rights and lack of consumer demand.
Other US media companies are scaling back their positions as sports property owners are concentrating on their core businesses at a time of recession. For example, Disney’s Michael Eisner is said to be considering selling the Major League Baseball franchise Anaheim Angels to recoup the cost of sports rights purchased for Disney channels ABC and ESPN.
Furthermore, several sports franchises in the US and Europe face financial ruin due to an over reliance on income from television which has left them facing no alternative than to aggressively pursue alternative revenue sources.