Shrinking Audiences and Unintended Consequences

Looking forward to the Giro? You must be, once glance at the start list and you feel like the astronaut David Bowman in the Arthur C Clarke novel “2001 A Space Odyssey” as you exclaim “my god, it’s full of stars“.

If you’re Dutch it’s even better as Steven Kruijswijk is back for revenge with Tom Dumoulin, Wilco Kelderman and Bauke Mollema all in the mix too. So far so good but broadcast deals mean the race will no longer be shown on the main public channels because the rights have been bought by Eurosport. This may pose problems for some teams and their sponsors as it means a shrinking audience.

There’s been a shake-up of broadcasting rights this year with RCS selling coverage of its races (the Giro, Strade Bianche, Tirreno-Adriatico et cetera) to Eurosport, instead of Sporza in Belgium and NOS in the Netherlands and this has advantages and disadvantages too and these are shared unequally.

A brief history of Eurosport

Eurosport was launched in the late 1980s after a pan-European consortium of broadcasters realised they held so many TV rights for sports events and they didn’t know what to do with them. Satellite television was taking off in Europe and the channel was launched with Britain’s Sky behind the project but legal issues saw things stall it was resuscitated by France’s TF1 channel in the early 1990s. Think of it as a cheap space for spare sports programmes but its ability to attract a niche audience was valuable and the costs were low because it was piggybacking on the filming and production done by others. In 2012 TF1 sold a stake in the channel to US firm Discovery Communications and in 2015 Discovery bought the channel in full.

Eurosport today

What’s it mean? Well for starters Eurosport now has a wealthy backer and sports rights have become more valuable, they’re not the surplus images dumped onto a back channel, they’re valuable content. This is good for the cycling fan as the rights for more races are being bought, although as ever the price is never high given modest audiences and high production costs. But the likes of Eurosport offer us fans plenty of good coverage and because they know that a lot of the audience are hardcore cycling fans they can spend time on air talking about tactics and tech rather than cheese and castles.

But Eurosport is a niche channel. In some countries, like Britain and France, it’s a premium or subscription service available via satellite or cable providers. In others like Germany or the Netherlands it’s free to air. Free but not watched so often, for example Eurosport is available to watch in 37 million households in German but when the average German citizen turns on their TV it’s not Eurosport that comes on. So it’s a niche, something you go to rather than sit on front and wait for whatever’s on to come to you.

Eurosport offers plenty of good coverage, it typically relays the video from races around the world but employs professional commentators and often co-commentators as well as others for pre-race and post-stage analysis. Chances are it’s so good that many fans outside of Europe even resort to pirate feeds or elaborate VPN systems in order to watch the content. This might be wrong but it shows how some will jump over any hurdles put in front of them just to get cycle sport coverage with commentary in a language they understand.

Which brings us to the problem. Dutch teams like Lotto-Jumbo and Team Sunweb (which is part Dutch, part German but that’s another debate) are going all in for the Giro with their best riders. Only having made their plans it turns out the race won’t be as visible in their home market of the Netherlands. Of course you can find it, just as you’ve found this blog and just as you might watch a pixelated feed with those whack-a-mole pop-ups. But that’s you, a fan of the sport, a convert. For others, it won’t be as easy to find and the typical Dutch household won’t see the Giro so easily. This matters because sponsors like Jumbo and Sunweb are not targeting you and I but want to reach the consumer mass market, they don’t want tens or hundreds of thousands of fans, they want the millions in the mass market.

Shrinking audience

This was a hypothesis in January and now it’s becoming reality, we’re already seeing the problem show up in audience numbers. The Strade Bianche got an audience of about 50,000 this year on Eurosport’s Dutch channel compared to 400,000 when it was live on public television last year. Professor Daam Van Reeth – editor of the surprisingly compelling The Economics of Professional Road Cycling – who keeps a close eye on these things predicted that Milan-Sanremo would only get 100,000 viewers in Belgium when normally it’d get 800,000 to a million viewers on Eén (“One”, Flemish public TV, aka Sporza). With the results in it turns out that the viewing figures were not down by as much as Van Reeth forecast but still down by half. The point isn’t the professor’s ability to forecast ratings but the actual numbers that viewing figures have halved. That ability to reach a mass market has shrunk.

Domestic vs Foreign viewers

A note on the importance of foreign broadcast rights. In short it’s nice but the domestic audience is what counts. For a race like the Giro d’Italia there was an average global audience of around 2.9 million per day in 2012 according to Van Reeth and if precise data is hard to come by typically half or more of the daily audience is based in Italy. So once you divide up the rest of the world between all the different markets then the importance of the Belgium and Dutch markets isn’t too high for RCS. But it is crucial for the likes of sponsors like Jumbo or Sunweb.

Conclusion

The moral of the story is that race owners get to pick who they sell their TV rights to and there are consequences. When RCS sells the broadcast rights in some markets to Eurosport – now backed by the deep pockets of Discovery – it could earn more money for the race itself but there are consequences, it can also mean smaller audiences. We’re already seeing this in Belgium and the Netherlands where the TV ratings for RCS events like Milan-Sanremo have halved. With luck the Dutch audiences will sustain themselves as people make their way to Eurosport in order to follow the fortunes of Steven Kruijswijk but that’s just the point, it requires people to find a channel rather than just turn on the TV and this simple change can result in hundreds of thousands of viewers being lost.

The piece above looks at the topic from the example of RCS and Eurosport’s Dutch language coverage but this is only an illustration, the same issues apply to other races in other markets with other deals*. Perhaps all TV is going this way as the audience fragments into ever smaller niches so that everyone can find something they want to watch when they want to watch? Overall that’s no bad thing but there are unintended consequences. Pro cycling’s model has been based on mass market television from the days when everyone in a household or a café would congregate around a TV and accept the implicit pact where riders were pedalling billboards and teams named after their sponsors. If this is coming undone then it will impact teams and their sponsors. For now there’s nothing drastic, there’s no need for doomsday headlines but like the Monolith in the 2001 film it’ll take us a while to work out what it all means so until then watch the trend as over the long term the shake-up of broadcast rights and Eurosport’s deeper pockets could alter the sport’s model.