New Study Points Out What A Boon Sports Streaming Piracy Could Be To Leagues

from the making-use dept

When it comes to cable cord-cutting and the set box vs. streaming revolutions, I have always argued that professional and college sports plays an outsized role. In fact, sports programming is one of the few threads by which the cable television industry is currently hanging. Some leagues have made better use of these trends than others, with Major League Baseball still representing the gold standard in sports streaming, with the other major sports leagues riding along in its wake. And, yet, one of the most common complaints about streaming copyright infringement one can find out there is that of live-streaming professional sports. While much of this comes from the broadcast partners of these leagues, the leagues themselves still make a significant amount of noise about pirated sports streaming.

It's never made sense to me. Sports league revenues generally are dominated by two categories: merchandise and advertising revenue. The former gets boosted with the maximum number of eyeballs on the product while the latter becomes something of a complicated mess, given that ad revenues have traditionally gone to broadcast partners, which translate into large contracts with revenue going from the broadcasters to the leagues. Despite that complication, the interest here is in advertising revenue. I wrote the following paragraph way back in 2012:

Here's my question: why is any of this necessary? With that same smart phone, I could have gone to one of dozens of websites (evil, evil websites) that would simply stream the games I wanted directly to my device for free. More to the point, they'd stream the local broadcast that I wanted, complete with commercials. Why wouldn't the major sports leagues do the same thing? If advertising is still the major money-maker for professional sports (and, along with merchandise, it is), why wouldn't they want to increase their reach by offering their own free advertisement-laden stream? Coupled with location identifiers, I'd think the leagues could partner with local broadcasters to make sure that people were getting the same geographical broadcast they'd get watching at home. Again, the same commercials can be in place, so what's lost? Why charge me $50 a season to watch the game on my phone or tablet, but not levy that same charge for watching on my television? It's the ads that matter, isn't it?

The ads, and the eyeballs, of course. Pirate streams increase reach, full stop. Why wouldn't leagues and broadcasters see that reach as a good thing? Well, according to a recent MUSO study, they absolutely should.

In their study, the companies looked at eight matches of the previous Premier League season. They found that these matches had an average pirate audience of 7.1 million viewers across as many as 149 countries. Most of these unauthorized viewers came from China, where nearly a million people tuned in per match, followed by Vietnam, Kenya, India and Nigeria. The U.S. and the U.K. took 10th and 11th places among the piracy audience. These numbers were complemented with GumGum’s marketing and sponsorship insights. After factoring in the exposure of different brands in various regions, they came to the conclusion that there is £1 million in uncaptured sponsorship media value per match. The majority of value is linked to field-side LED advertising and the sponsorship placements on the front of the players’ jerseys. While pirates may not pay, they definitely see these sponsored messages.

Based on the study, it seems that even a lack of localized advertising still leaves an enormous amount of money on the table in the form of on-the-field sponsorships. I would add that, at least for large global brands, there is value in the commercials as well in pirated streaming. Per the study, the retort from broadcasters and leagues thus far appears to be complaints that, because they cannot control or directly count the streams in question, those viewers aren't represented in advertising or sponsorship contracts.

But all that tells me is that that's the problem. Not the pirated streams themselves, but the failure to capture the boon of those streams in the contracts with sponsors and advertisers. Given that, and considering the laughable game of whac-a-mole that is blocking pirate streams, how is it not the better solution to put these pirate stream numbers in front of sponsors and increase contract costs for sponsorships as a result? When MUSO, an antipiracy outfit, states the following, it's probably time for rightsholders to listen.

MUSO co-founder and CEO Andy Chatterley hopes that the findings will change the perception of pirates. He emphasizes that this audience should certainly not be disregarded. “Piracy audiences have too long been disregarded as offering no real value to rights holders and distributors, but the reality is that these huge audiences still see the same shirt sponsors and commercials as people watching the game via a licensed channel,” Chatterley says.

In other words, these streams are not an enemy, but an opportunity, if only the leagues would finally take notice.

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community. Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis. While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: opportunity, piracy, promotion, sports, streaming