Sports TV Rights in France : Stakeholders’ strategies, market dynamics, and emerging trends
Sport and the media have a strategic relationship with mutual interests. Historically, television has been the main driver of the change in the economic model of sports organisations. For example, in the space of a century, football has gone from being a simple sporting game to a real economic issue. The sums paid by television operators to broadcast football matches have increased exponentially since the 1980s. Today, sports TV rights amount to a total of more than €1.5 billion in France. Yet television is facing the challenge of the digital revolution and the associated changes in media consumption.
The media rights market is an economic market like any other, with a product - which we will refer to as “sports broadcasting product”- balanced between supply and demand. The central question here concerns this market’s stakeholders’ strategies and their evolution in the light of digital.
What makes sports rights a unique product? The two economic characteristics:
The “sports broadcasting product” has two main economic characteristics which distinguish it from other (flow) audiovisual products. First, it is a time sensitive product. The outcomes of a sports competition are uncertain, and therein lies its value: in not knowing who the winner is. Once the outcome of a match is known, its uncertainty no longer exists and the value of the broadcasted competition is diminished. Like any flow program, the sports product has no heritage value and favours live broadcasting.
Second, the sports broadcasting product is a non-substitutable good. No other sports program can replace, for example, a World Cup or European Champions League final. The main consequence of this non-substitutability is that broadcasters bid for these premium rights, because of their uniqueness. The exclusive nature of the premium rights gives the winning channel the sole right to broadcast major events or competitions. At the same time, it deprives its competitors of the opportunity to broadcast the respective event, and they will not be able to find substitute programs of the same importance. This explains the big difference in costs between premium and catalogue rights.
The three types of rights
Premium rights: The heart of competition
Premium rights are the most disputed because they are the least substitutable. They are the ones that generate subscriptions for pay-TV channels. The acquisition of these exclusive rights represents the main strategic challenge for premium channels such as Canal+ and beIN Sport and constitutes the bulk of their market spending. These rights most often concern punctual major events and competitions that take place throughout the sports season, and therefore allow for the development of an unfolding storyline likely to keep subscribers on the edge of their seats.
"Catalogue" rights: A volume logic
For the sports channels, these rights are essential because they can fill the program schedule at relatively low cost. These rights are often sold by media agencies (e.g., InFront Sport, Lagardère Sports) as a package and may include competitions of medium or low notoriety. They can also be included in negotiations by the rights holders alongside a premium competition.
Major events: Against a monopoly on all-payment services
Considered as "events of major importance", the free broadcasting of certain competitions is protected by French legislation. Law No 86-1067 of 30 September 1986, implemented by Decree No 2004-1392 of 22 December 2004, states that "events of major importance may not be transmitted on an exclusive basis in such a way as to deprive a substantial proportion of the public of the possibility of following them [...] on a free-access television service." There are 21 such events in France, out of which 6 are football matches.
Offer and demand: An always-already changing market
On the supply side: The organizers are systematically the rights-holders
In France, the ownership of the audiovisual rights to sporting events or competitions is regulated by Article 18-1 of the Law of 16 July 1984 as amended by the Law of 1st August 2003, under which: “The federations [...] and the organizers [...] shall own the right to exploit the sporting events or competitions which they organize." We are in this market with only one seller and a few potential buyers. It is a thwarted monopoly that puts the rights holder in a position to set the price. From this point on, the supply is divided into several lots, each with a low unit value in relation to the others, in order to maintain competition. Marketing is done by means of calls for tenders in order to guide prices upwards and to eliminate any inclination for collusive behaviour on the part of buyers.
On the demand side: An ever-changing landscape
Evolution of sport on television: From free to paid model
Since the liberalization of the audio-visual sector in France at the beginning of the 1980s, the volume of sports content has grown strongly, from 989 hours of broadcasting in 1984 to 5,622 hours in 1988, then to 11,704 hours in 2003 and 100,000 hours in 2010. In 2018, the number of free-to-air and encrypted channels combined was 145,700.
Figure 1: Evolution of free sport broadcasting TV programs (in hours) [2010-2020]
Source: CSA 2019 “Sport and Television” report
Thus, the expansion of the offer of televised sports occurred thanks to the development of paid television. Paid access represents a large majority share of the hourly volume from 1988 (65%), to reach nearly 94% in 2018. The diversification of broadcasting modes and the increase in the number of channels (7 in 1995, 14 in 2000, 18 in 2018) are at the origin of this evolution. The result is that any increase in the sports offer for viewers comes essentially from a pay-TV channel.
Paid broadcasters: A double typology
Within the category of paid channels, two types can be distinguished: Premium channels offer exclusive "premium" content, with a significant proportion of their programming based on the broadcasting of highly attractive sports competitions. Thematic channels offer programming that is almost entirely sports-based, generalist or specialized around a particular discipline. These channels thus require a large volume of programming, combining, in varying proportions, the broadcasting of competitions, sports news programs, talk shows, on-set or picture magazines and documentaries. When they are not backed by "historical" channels (e.g., Canal+ which broadcasts Ligue 1 since 1984) likely to position themselves on premium rights, these services are obliged, in order to balance their grid costs, to remain within reasonable levels of investment in rights acquisition.
TV rights market: The turning point of digital transformation in sport
The international OTT market is evolving very quickly. Technological developments and the multiplication of offers are leading to the emergence of a certain diversity of business models: payment by the consumer (in pay per view, especially by subscription) or via advertising revenues (programmatic advertising, sponsored content, special formats, etc.).
Following the precursory model of the American leagues, French rights holders are also gradually launching to broadcast their content directly on the Internet (Professional Football League, French Football Federation, French Tennis Federation, National Rugby League). Some of them offer the images of their competitions in order to improve the visibility of their sport, while others are testing the launch of their own OTT platforms. In order to adapt to new uses traditional television publishers are increasingly offering their content in OTT to maintain their attractiveness. They generally offer content that is close to that of their linear content offer, in a logic of complementarity to reach all audiences.
New entrants have developed offers around particular sports disciplines which receive very little media coverage on traditional free media (Sport Auto TV, MMA TV, Horizon Sports). Abroad, a pure player like DAZN, the first sport platform of its kind, has developed OTT sports content in several countries (generally based on secondary rights). This type of service is not yet available in France, but the company has announced that it will soon launch in 200 countries, including France (especially for boxing).
The digital giants are also increasingly present in sports content distribution, and even directly in the sports rights market such as Amazon, which will broadcast Roland Garros 2021 night sessions in on its Prime Video service. Other global subscription video-on-demand services (VOD) services are limited, at this stage, to offering documentaries or series based on sports. Video sharing platforms and social networks host sports content from publishers and rights holders who generally publish short videos designed specifically for these third-party platforms.
Economic models: Coexistence of free and paid offers
Free OTT sports content offers financed by advertising are mainly by generalist free TV publishers that broadcast sports content on their channels (France Télévisions, TF1, M6 and L'Équipe channel). Other types of players, such as Sport Auto TV, or the multi-channel YouTube Play Sports Network, have also chosen a free model, offering free video content for the general public and in particular for their members.
Free-to-air television channels broadcasting sports stream live sporting events online, on their website or application. If sports competitions are primarily the prerogative of live broadcasting, free-to-air channels also make this content available to Internet users on their catch-up television services, as a rule for seven days after their broadcast. As a result, the availability of sports events broadcast on free-to-air channels in TVR is still relatively heterogeneous.
From the viewer's point of view, the interest of a sports competition in catch-up remains low. The interest of catch-up services lies less in the access to the event itself in its entirety than in the possibility of consulting extracts (highlights or summary of the match, goals, etc.), information (results, statistics, rankings, etc.), and program complements around the competition (interviews with players, athletes, or coaches, reports, etc.)
Pay models, mainly in the form of subscriptions, are used by publishers of pay-TV channels (beIN SPORTS Connect, MyCanal, RMC Sport 100% digital, Eurosport Player), certain rights holders whose competitions are already shown on television (NBA Pass, F1 TV, GOLFTV) or lesser-known ones (LNV TV), or pure players such as DAZN. Some content is nevertheless accessible for free: broadcast on social networks and on the brand's website, it acts as a call product for the offer to attract consumers.
Sport content distribution strategies: digital becoming more and more present
Regardless of their business model, publishers of OTT sports content offers share several objectives. First, a self-distributing OTT publisher has a direct relationship with viewers and access to their data, which provides access to their consumption habits, in order to improve its offer or to better monetize it. OTT broadcasting also offers a full-fledged exposure window, even when the offer is already being distributed by other means. By providing consumers with an additional means of accessing content, OTT broadcasting actually helps to increase the visibility of the offer, the brand, or the associated sports competitions. It also allows publishers to respond to changing usage and attract a new audience.
To expand their subscriber base and differentiate themselves from television offers, most OTT sports content offers propose no-commitment subscriptions. This provides consumers with much greater flexibility than a linear TV offer. However, this flexibility increases the risk of subscribers opting out. Distributing one's offer online is also a way to achieve economies of scale in terms of technical investments and rights acquisition for publishers who want to expand into several territories. Finally, OTT broadcasting can be a lever in the fight against sports content piracy. Over the last 12 months, 17% of French Internet users aged 15 and over have used illegal means to access online sports content. Football competitions are the most pirated, in particular Ligue 1 and the Champions League. 53% of the illicit consumers of sports content access it exclusively by illegal means.
OTT platform, the masterpiece of the up-coming sport-media landscape
For the time being, the OTT sports content market is still in its infancy in France. When we evaluate the forces at work in this new market by analyzing the bargaining power of rights holders, the arrival of potential new entrants, the substitutability of offers and the behavior of users, it seems likely that this market and its uses will grow. The strategy of players such as DAZN and the recent launches of platforms by certain European and French rights holders (e.g., Formula One, Volleyball French National League, Olympique Lyonnais…) also seem to point in the direction of growth in this the sector in the short and medium term.
The risk of cannibalization of traditional television offerings by these OTT services still seems low, given the technical and economic constraints faced by the players developing this type of offer, and the still limited enthusiasm of users. The deployment of broadband and ultra-broadband networks, as well as the reinforcement of the fight against piracy should create a more favorable environment for the development of OTT offers. Nevertheless, the fragmentation of pay-TV offers and the dispersion of content remain obstacles to the development of uses and the penetration of paid OTT offers.
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