Countering Cord Cutting – How Sports Can Combat the Trend

It’s no secret there are daunting challenges ahead for the sports industry in the face of rapidly changing demographics and consumer behavior. Chief among these challenges is the question of what to do about younger sports fans who have turned off their TVs.

Over the last four years, live TV as a percentage of viewership has declined 12 percent, down to 40 percent of all types of viewing. This trend correlates with the broader issue – cord cutting. It’s estimated that about 30 percent of millennials are either cord cutters or, more worryingly, cord nevers. That’s nearly one third of a generation that has no concept of or loyalty to traditional TV viewership. That significantly impacts the sports industry.

Over the last four years, live TV as a percentage of viewership has declined 12 percent, down to 40 percent of all types of viewing.

ESPN, the canary in the proverbial coal mine, has lost seven million households from 2014 to 2016, thanks not only to cord cutting but also the proliferation of so-called “skinny” bundles, cable providers’ attempt to compete with the myriad streaming services now available. In the 2017 sports season we have already witnessed the decline of NFL game ratings – something that was once inconceivable – and the NBA finished last season with fewer viewers as well. This despite efforts in both leagues to not only improve the “product” but, in the case of the NBA at least, an unprecedented boon in talent.

And yet, sports dominate the cultural conversation in much the same way it always has, and the ripple effects of cord cutting have yet to make a significant impact on actual attendance to events. So where have all the viewers going and how do sponsors reach them?

If you don’t have a social strategy by this point it’s highly unlikely you’ll weather the coming years. But even for those who do, the landscape has changed so much in the last 18 months alone that it can be extremely difficult to articulate what that strategy should be moving forward. During that timeframe, Facebook and YouTube have both launched formidable live streaming platforms, and Amazon acquired Twitch, the go-to destination for eSports (more on that in a bit). Disney’s acquisition of Fox also throws tremendous negotiating power to the house the mouse built even as they build ESPN’s stand alone streaming service.

So how can programs built for fan engagement and community pivot to serve customers that are now expecting high-quality video packages and compelling experiences across channels? Here is where leagues and sponsors have a leg up on the rest: they already have all the ingredients and experience to put together compelling stories and maximize brand exposure attached to some of the most dramatic real-life cultural moments. For a roadmap, let’s take a look at an emerging platform: eSports.

eSports events are now regularly driving viewership of one million+ for major events worldwide.

eSports events are now regularly driving viewership of one million+ for major events worldwide. Those aren’t playoff numbers but considering that there are still those who see eSports as a novelty, it’s impressive. The fan experience for eSports stands in stark contrast to the traditional fan experience with athletes, and yet looks oddly familiar. Instead of waiting after the game or a practice to get some balls signed eSports fans not only watch but also interact with their favorite athletes in real-time. An intimate bond is formed through not only the viewership aspect but the interactions that happen between tournaments during a “season.” eSports athletes are accessible at an unprecedented scale, without the filter of media or handlers between them and their fans.

This has turned into a boon for brands that have invested in eSports sponsorships, including some leagues themselves. There is an authenticity and credibility from these sponsorships that brands and leagues would be remiss to ignore. What we are witnessing now is a shift not only in how people watch, but their expectations of the relationship with their favorite athletes and when/where they can watch them in action.

That gives significant opportunity for brands to experiment and test new types of presentation, engagement, and sponsorship models that they can then bring over to the more traditional and established sports. As current demographics shift, these brands will be well positioned to meet the expectations of younger fans by bringing over their experience from eSports. This is all on top of the benefit of playing a major role in the founding of a new sport.

In the meantime, there is still a lot more that can be done within the existing landscape to build and activate relationships with fans. The sports industry should be all-in on Live content production for Facebook, Instagram, Twitter, and YouTube. They should likewise be investing in Story formats for Snapchat and Instagram, not just to provide “behind-the-scenes” glimpses but to showcase compelling content in partnership with athletes.

As we look ahead there are still a few things that will remain true no matter how technology changes. Keep the following in mind:

  • Invest in fan relationships – no matter what we have to remember this is what truly matters.
  • Empower athletes to connect with fans – there is risk in letting players live and speak more publicly but this is also essential to continue building long-term loyalty among fans.
  • Explore new extensions of the brand – leagues, most notably the NBA, are already exploring opportunities in the eSports realm. Sponsors would do well to follow suit.
  • Improve the core product experience – above all give fans a reason to keep coming back.

For now, the sky’s the limit, and even with the challenges ahead one thing remains true: everyone loves a good game.

Jurgen Castro

Senior Director, Digital Strategy at imre
Jurgen Castro is Senior Director, Digital Strategy for imre, a transformative marketing firm that works with major brands to leverage their sports sponsorships. Contact Jurgen at jurgenc@imre.com.

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