Sports rights holders missing out on US$28.3bn a year due to piracy

[Chewy_fox]

Sports service providers and rights holders are missing out on up to US$28.3 billion in new revenue each year as a result of piracy, according to a new study by video technology company Synamedia and market research firm Ampere Analysis.

The report found that over-the-top (OTT) sports streaming services alone would stand to gain US$5.4 billion - equivalent to 19 per cent of the total - by eradicating piracy, with the remainder available to pay-TV broadcasters.

The overall figure in the study, titled Pricing piracy: the value of action, was generated by identifying the demographics and characteristics of illegal users that are most likely to convert to legal services, including their reaction when illegal viewing is disrupted.

As part of the report, a survey of 6,000 sports fans conducted by Ampere Analysis found that 74 per cent would be willing to switch from illegal services if a legitimate alternative is available and if the illegal streams become unreliable. 

By understanding those motivations and behaviours, the report says that service providers can target interventions - such as disrupting streams and incentives - at the ‘converter cohort’, which refers to viewers most likely to switch to legitimate platforms.

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The study found that the converter cohort primarily comprises younger fans and are often families with young children. The group is made up of avid sports viewers, many of whom watch ten or more different sports using connected devices. 

Some 40 per cent of the converter cohort said they would subscribe to OTT sports streaming services, including single-sport platforms operated by rights owners, with the balance opting for traditional pay-TV services, particularly those with exclusive coverage.

Despite being the most likely to switch from illegal streaming, the study also found that 57 per cent of the converter cohort already pay for legitimate subscriptions, while 52 per cent are putting money in the pockets of illegal services.

The study therefore calls on service providers and rights holders to ‘transform piracy from a cost centre into a revenue opportunity’ by identifying the triggers that lead consumers to turn to piracy. Some of the reasons that consumers favour illegal streams are listed as flexible access without complex installations or long contracts, ease of use, availability on every device in any location and a price point that is often much lower than a traditional pay-TV contract.

Yael Fainaro, senior vice president of security at Synamedia, said: “After years of growth, a recent downturn in rights fees has been exacerbated by the pandemic, hitting sports rights hard. But just as the value of rights is being eroded, there is now the prospect of creating new revenues by converting illegal viewers into paid subscribers.

“While previous attempts to value the revenue leakage from sports streaming piracy took a crude approach, we now have the detail to develop targeted approaches and the tools to deliver quantifiable results, ensuring every investment hits the jackpot.”

It is the latest report on piracy released by Ampere and Synamedia, which last year carried out a ten-country study of more than 6,000 sports fans. That analysis that found 51 per cent of respondents still used pirate services to watch live sport on a monthly basis, despite some 89 per cent of participants owning a subscription to a pay-TV or OTT platform.

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