From football (or soccer to some) to cricket to baseball to golf, streaming video providers around the world are spending billions of dollars on live sports rights in a bid to attract, retain and monetize an increasingly fickle audience. Deloitte predicts that in 2023 alone, streamers will spend over $6 billion on exclusive rights to major sports in the largest markets across the globe.
The Direct-to-Consumer (D2C) streaming model continues its upward trajectory as one of the biggest areas of growth in the sports media market in years, one that will also remain very competitive as well. Providers must be agile, innovative and equipped with a long-term fan engagement strategy rather than fixed monetization models. “What is going to be my Customer Lifetime Value (CTV) within sports streaming” will remain one of the toughest that providers must answer.
Within the D2C streaming landscape, prospective businesses will need the capability to build different monetization models rather than going the one-size-fits-all route. When considering how to go about this task, experience speaks volumes. At Evergent, we have extensive experience working together with different multichannel video programming distributors (MVPDs), regional sports networks (RSNs), major sports leagues and individual team networks in applying our Evergent Monetization Platform (EMP) to help those entities acquire, monetize and retain a customer base.
Digital transformation for sports streamers starts with building an engaging tech stack, but, based on our experience, most streaming businesses do not follow that up with a lot of effort spent ideating on different monetization models. That lack of follow-through, unfortunately, slows many potential providers down while speed in time to market is essential in sports. Hence, having a strategy based on each season, each game and each moment is pivotal.
Here, we cover five key monetization models every sports streamer needs to consider -
1. The Wide Variety of Direct Monetization
Typically, every streaming provider starts out with the direct monetization model, in which an enterprise sells its own products and services, but do not mistake that high usage rate as equating to ease of use, especially when it comes to D2C sports streaming.
Let’s consider all the various options just from the perspective of one type of sports league. Offerings could include a league pass, an individual season pass, commercial pass, a pass for one particular team, streaming options based on geographical region, based on couch rights, financial status (i.e. student, senior), multi-tier pricing for various games, then all the associated promotions as well.
Direct monetization is both the most common and the most dynamic and complex model to be considered. This is certainly not a one-size-fits-all model.
2. Indirect Monetization
By applying the indirect monetization approach, derived assets such as advertising data, leads or other insight generated from activity on a platform itself can be monetized. An example of this would be referral fees, license or revenue share within a partner ecosystem. And more specifically for our purposes, the rights to a live sporting match could be sold to another streaming partner for viewing purposes in other parts of the world in exchange for associated contract and other outcome-based fees.
There are compelling reasons to consider this type of proposition, including minimal acquisition costs and access to purchasing preference data. Yet, this model also comes with complicated considerations including how to choose which assets to monetize, pricing and the involvement of partner entities into the equation.
3. Building Out Additional Revenue Streams
In this approach, elements of both direct and indirect monetization can be incorporated. The most important consideration for any D2C sports streaming enterprise is to keep customers engaged.
Providers must think beyond their bedrock - dynamic content - to consider additional opportunities such as merchandising, sports betting, bundling services. Deliver to fans a full product catalog along with an immersive platform experience personalized to their interests. The sports streaming providers who do this have an open opportunity to sell inventory around both their programming and platform.
4. Intermediary Monetization
Some D2C sports streaming providers may choose not to sell their own products and/or services themselves. Instead, these entities serve in an intermediary capacity and earn revenue by brokering transactions between marketplace buyers and sellers. This revenue would come in the form of, say, a commission, take rate, per-transaction fee or a variety of pricing approaches as a result of brokering these transactions.
The potential benefits in going this route, with the right digital technology applied, include more self-service options, reduced geographical challenges and the possibilities for new concept creation.
5. Hybrid Monetization
Each potentially successful D2C sports streaming enterprise presents its own unique perspective, content and catalog of offerings so much in the same way there is no one-size-fits-all model within the direct monetization approach, there is no one monetization model that fits each and every sports streaming business. Every streaming enterprise must find the right monetization model, or combination of models, to fit individual offerings and objectives.
The end result may mix and match from a variety of models, based on what an enterprise can bring to market and is trying to achieve.
By partnering with the Evergent Monetization Platform, your burgeoning sports streaming solution can focus on what you do best and utilize our proven capabilities in all monetization models to help transform your business into a viable and growing enterprise.
Consider what we do best:
- Extensive experience launching high-impact, concurrent sporting events across the globe
- Rapid sports streaming scalability to manage billions of simultaneous sports-related transactions
- Frictionless subscriber management delivering instant game access in parallel to transaction processing
- Performance and scalability to process hundreds of thousands of event-critical transactions in microseconds
- Optimized payment platforms powered by global payment gateways
- Minimized churn rates with automated customer communication and promotional strategies
- Loyalty programs to reward your subscribers based on spending habits
Make the right monetization decisions for your growth objectives through data-driven insights delivered by EMP. If you want to speak to our team of monetization experts please contact us.