Millennials dump traditional media channels for sports viewing

16 May 2017

Millennials spend less time watching traditional television, which is is making it more difficult for established sport broadcasters to rely on them as regular viewers, a new study suggests. The paper from L.E.K Consulting considers where traditional sports television purveyors may be able to create interest among millennials, as networks bid to secure a new generation of viewers for their product.

For decades, televised sport has been a key medium through which teams have derived an increasing portion of revenue - as well as through which they won and kept the hearts of new supporters. New technologies and changing consumer sentiments however, particularly among millennials, and are creating a new environment in which those former 'truths' may no longer hold.

In a new report from L.E.K. Consulting, the management consulting firm explores key changes in consumer sentiment, as well as what companies can do to attract and retain millennials to sports. The report is based on a survey of around 1,700 consumers.

Time spent consuming various forms of media content

Millennials have a somewhat different profile, compared to earlier generations, when it comes to consuming various media forms currently on offer. Traditional television does not garner much favour with the group, with just 13% of the total time spent consuming media, spent on traditional television compared to 32% of the time for older generations. Consumers do continue to watch media however, although they tend to do so through paid and free OTT online video services, at 20% of total media consumption time compared to 9% for older generations.

Generation Y also show considerably more interest in video games and recorded content, at 12% and 9% of total time respectively, compared to 7% and 4% respectively for older generations. In terms of absolute numbers, the groups show considerable differences in how they interact with television, with a sustained decline in viewing time among millennials. Respondents 65+ have increased their per-day viewing to 450 minutes, while millennials in the 18-to-24-year group have seen viewing times, since 2010, decrease by 4.7% a year, to less than 300 minutes, while among 25-to-34-year-olds view time is down 2.8% per year to around 250 minutes per day.

Preference for favourite eSport vs. favourite traditional sport

Losing fans

According to L.E.K's analysis, a reduction in time spent watching traditional television may have negative consequences for sports viewing. 30% of respondents said that one of the reasons they became sports fans was because it was made available on traditional television mediums, which is equal to the 30% that said that playing a sport as a child connected them with sport viewing.

Aside from millennials becoming less likely to be in contact with sports as they move away from traditional television channels, so traditional sporting types are coming under competition from a new sporting medium: eSports. Many of such sports are born from competitive, team-based, video games, such as DOTA2, Starcraft and League of Legends.

When asked what sports medium the different groups preferred, 34% of all respondents said that they significantly prefer their favourite traditional sport, although this is skewed at 45% of non-millennial respondents to 27% of millennial respondents. While for those whom significantly prefer eSports, millennials stand at 27%to 13% for non-millennials.

Appeal of a sports-specific digital subscription

Moving fans

The firm, as part of its research, also considers ways in which traditional sports view purveyors might be able to access millennials with traditional sports related content. One option the firm considered is a sports-specific subscription product in the OTT space.

The research notes that interest among millennials for such a service is relatively robust, with 58% seeing it at least appealing (6 or 7), and few finding such an option unappealing. Among non-millennials considerable less interest was shown by respondents, while for millennial avid sports fans, considerable more interest (70%) in such a service was shown.

Fantasy football as means of attracting millennials

The firm further finds that some of the new digital and eSport related media and mediums may provide a pathway towards more traditional sporting types. For instance, the millennial group is particularly more interested in playing fantasy football, at 46% of respondents in the group compared to 15% of non-millennials. The effect of that engagement is positively correlated to increased interested in NFL football, with 56% of respondents saying that they spend more time watching actual NFL games.

“All of these platforms are new and they present challenges," according to Gil Moran, Managing Director in L.E.K.’s Sports practice and a study co-author. “For example, daily fantasy sports have faced legal and regulatory challenges, and are just starting to recover. But given their appeal to millennial fans, traditional sports organizations should consider engaging with them to determine which ones work best to recruit the next generation. In fact, the NBA recently announced a partnership with Take-Two Interactive Software, makers of the highly popular NBA 2K video game, to form an eSports league based on the NBA 2K series.”

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Despite industry disruption televised sport still draws audiences

24 April 2019

Despite the disruption wrought on most areas of traditional broadcasting by streaming challengers, sports remains a major draw for audiences of television networks. This is particularly true of viewers who bet money on sporting events, with those that have skin in the game considerably more likely to follow the event on a television screen.

Arguably the true opiate of the masses, for centuries organised sports have been a major draw for hordes of fanatical spectators, from the grand coliseums of Ancient Rome to the more understated greens of local cricket grounds. The advent of television in the 20th century took this to a new level, allowing for widespread visual access to major sporting events, and sowing the seeds of a multi-billion industry in the process. Yet while watching sport remains a key pastime for many, changing consumer preferences and new technologies are affecting the traditional sport distribution channel of TV.

To better understand trends in the sporting broadcast market, Deloitte recently released an article titled ‘Does TV Sports have a Future?’ as part of its wider ‘Technology, Media, and Telecommunications Predictions 2019’ report into telecommunications trends. The conclusions in the piece are based on the firm’s own survey of 1,062 US-based respondents.

More men than women watch sport

Traditional television has in recent years begun to lose out to streaming and on demand services, resulting in a generation that is watching considerably less television. The shift in consumer sentiment has caused traditional TV companies consternation as well as shifts in business models. The average Millennial now watches 42% fewer minutes per week of TV in 2018 than they did in 2010. Yet not all areas of the traditional television market have been as hard hit by the shift, and sport is one of them. This contradicts previous studies which may have suggested that Millennials were abandoning ‘old’ media for their sport viewing.

One reason for this could well be sports betting, which means that many of the people watching the event are keen to see how their punt is faring, in play. According to Deloitte, 78% of male sport viewers, and 64% of their female counterparts would be more likely to tune in to a live event if they had bet on it.

The study found that sport gambling remains a key fixture in the gambling industry as a whole in the UK. In the United Kingdom in 2017, sports betting had £14 billion in turnover. In the four Nordic countries, meanwhile legal gambling of all kinds was an approximate €6 billion industry in 2015. In the US, meanwhile, the industry as a whole is worth around a quarter of a trillion dollars – with sports betting figuring at around 40% of that total. The industry is projected to see growth of 9% over the coming three years.

Betting on sports is associated with watching sports on TV for more than five hours on a typical weekday

However, while the gambling industry does indeed seem to have some impact on television engagement, it would be dangerous to overstate this as a positive, and such a conclusion might also put the cart before the horse. Deloitte’s study found that ‘super-superfans’ – those who watched more than five hours on a typical weekday – were more likely to gamble than average viewers.

Of those who watch more than five hours of sport per day, only 4% do not bet. Of those, 2% do not currently bet, or have never bet, respectively. Again, it could be asserted that these people are engaging with televised sport, and thus keeping the advertising-based industry afloat, due to the betting they participate in. However, it could equally be argued that they are exhibiting compulsive behaviour in spending such a large amount of time viewing sport in the first place – behaviour which would leave them as easy prey for gambling firms, who can now milk them for profit.

But where is all this set to lead? According author Duncan Stewart, the potential profitability of this model means it is likely to be exported from the UK in the coming years.

Steward concluded, “As a thought experiment, one can imagine a 30-year-old American man in the year 2025… watching a football game on the TV set, smartphone in hand. He can bet on the match at any point, modify his wager, buy back a losing wager, bet on the outcome of individual plays or individual stats such as the number of passing yards by the quarterback—all in real time, and all tailored to him. Ads could be served that are customised for him, informed by his betting and attention, and watching would have to be 100% live. The broadcaster or betting site could not only charge more for ads seen by such an involved viewer, but even have a share in (or own outright) the profits from the betting/video stream … at margins much higher than the usual for TV broadcasting. To an American, this sounds like science fiction, but in the United Kingdom, these solutions (or variations of them) are available today.”