Why Sports Cancellations Will Favour Tech Giants, CTV And Gaming

Why Sports Cancellations Will Favour Tech Giants, CTV And Gaming
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With all major US sports codes called off indefinitely, the Olympics looking unlikely and Australian codes bracing for a disrupted year, there are questions over how this lull of sport will change consumer and advertiser behaviours.

Social isolation worldwide is expected to drive up media consumption in the coming months.

In the US, Nielsen has already identified a 22 per cent increase in TV, video-on-demand and streaming consumption in the last week alone.

But with no live sport to watch on traditional broadcast, these cancellations will likely accelerate the shift to digital for the wider media industry.

For example, sports fans may instead turn to Google-owned video platform YouTube to watch old games or other sport-related content on demand.

In Australia – where the AFL and NRL are both currently still running – traditional sports broadcasters are already feeling the pinch.

News Corp’s Fox Sports overnight made up to 20 employees in its news division redundant.

Speaking to the HeraldFox Sports boss Peter Campbell did not directly blame the coronavirus outbreak, but he did cite “challenging conditions” in the advertising market and a decline in Fox Sports News audience numbers.

The World Economic Forum project and engagement lead Stefan Hall earlier this week shared his thoughts on how coronavirus will change media consumption.

“As more people stay home, self-isolation and quarantine measures could increase media consumption in the home,” Hall said.

“This may result in an increased use of entertainment services such as video on-demand and gaming.”

Hall pointed to media consumption in China during the recent lockdown.

Financial Times data shows game downloads on Apple devices in China increased 80 per cent during the month of February.

Hall also suggested that even if professional sporting leagues do start up again, long term bans on mass gatherings could change the nature of broadcasting entirely.

“If sports stadiums are forced to close their doors for the long term, they could lose their allure to broadcasters,” he said.

“Would these competitions be as good, or as popular, without the live atmosphere that fans create?”

Changing ad spend

With consumers set to change their media habits, advertisers will have to quickly adapt to the changing market.

Financial analyst Adam Levy pointed to the continued profitability of tech giants such as Google, Facebook and Amazon on the back of digital advertising.

“Without sports, the shift to digital should accelerate,” he said.

“The big digital advertising giants offer broad reach that television advertisers are looking for, and they could see considerable benefits from the shift.

“Additionally, advertisers may shift their spend to more connected-TV advertising platforms like those owned by Roku, The Trade Desk, and Amazon.

“Connected-TV is an easy transition for ad spend that was originally intended for television.”

Levy explained that even if marketers don’t shift their entire sporting budget, there will still be a “greater percentage” going towards tech companies.

He singled out Facebook as one business that will “come out strong” from the current downturn.

 

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