Leagues Don't Get Younger on Streamers—They Just Lose Viewers

Leagues Don’t Get Younger on Streamers—They Just Lose Viewers

Tier one sports properties have sold a small percentage of their rights inventory to streaming platforms to achieve the revenue growth desired. The median age of viewers on those digital services is often cited as an ancillary benefit.

Sports Media Watch founder Jon Lewis noted that NBA games exclusive to Prime Video during the league’s opening week “skewed younger than games on linear television…45.6 compared to 53.3 for games on NBC and ESPN.”

But that claim is deceiving. It’s not as if young people are consuming games en masse on digital platforms. 

The NBA games that aired on broadcast television over the same period beat games on streaming by 79% amongst fans between the ages of 18-34.

It simply reflects the large number of older fans that remain inside the established pay TV system. Games on broadcast beat streaming by 371% amongst fans in the 55+ demographic. 

“Any time you have a standalone, separate paywall you’re going to create friction that can lead to lost reach,” Patrick Crakes (media consultant, Crakes Media) said. And “if you reach less viewers and your composition of a young adults increases, or even just goes down less than the total audience, your median age goes down as well.”

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Fox Sports’ president of insights and analytics Michael Mulvihill has called the notion that streaming is the way to reach younger fans ‘the most stubborn myth in sports media’. It stems from a broad assumption that older people aren’t on or don’t use digital platforms. 

The problem is that’s not an accurate assumption. A ’21 Pew Research study indicated 73% of respondents between the ages of 50-64 said they use Facebook. 

It’s also widely assumed that young people are more inclined to consume video programming via a streaming service. That’s not necessarily true, either. 

“There’s clearly a lot of 18–34-year-olds still in the established pay TV system,” Crakes said. “How else could sports viewership be growing amongst all demos when 90% of the games that matter still reside inside the pay TV bundle?”

But the broader media’s failure to understand (or acknowledge) reach drives the inaccurate narrative.

While pay TV is technically ‘paywalled’, at one time it effectively scaled into 90%+ of all U.S. homes. Today, just 50%-60% have a MVPD or vMVPD service. However, because there are more TV households than ever, that still equates to ~70mm residences.

The broadcast networks are essentially higher circulation pay TV channels.

For context, Disney has 60mm subscribers across the U.S. and Canada. 

But “they don’t produce anywhere close to the viewing minutes of the pay TV bundle,” Crakes said. Disney represents “like 4.5% of all video minutes consumed across platforms versus 45% for pay and broadcast TV.”

That’s because people engage with traditional television services and streaming platforms in fundamentally different ways.

It simply doesn’t matter how many people might buy toasters on Prime Day, NFL aside, a rights owner moving game inventory exclusively to Amazon Prime (or any other streamer) is going to lose viewers.

TNF on Amazon has been the exception. Its viewership amongst 18-34s has risen over the last four years.

Of course, it’s the only sports property that benefits from local broadcast affiliate viewing.

“And when your reach goes down, typically the median age follows because the young adult numbers tend not to go down as much as everybody else,” Crakes said.

Streamers tout their median age because the normal reach or ratings story is impacted by the standalone paywall. Even Netflix, which is more general market than most OTT platforms, commands just 9% of all video minutes consumed.

“One of the reasons why Netflix doesn't commit to regular season games is it doesn’t believe it will regularly get older folks there to watch them,” Crakes said.

Viewers 35+ aren’t going to spend their precious time looking to find a regular season matchup to watch inside of an expansive digital platform, even if they subscribe to it.

“For the general market, live sports watching is supposed to be about entertainment and relaxing,” Crakes said. “Going on a safari for content is not something older people typically want to do.”

Digital content discovery should get easier over time. As consolidation occurs, the few remaining platforms will likely play nicely with one another (think: cross promotion). 

It’s just never going to be as easy as viewers had/have it flipping around inside a cable TV service.

“These streaming platforms originated on the idea that they were going to be never-ending DVD libraries at your fingertips,” Crakes said. “Sports aren't programmed like that, though. They’re programmed linear, which means there must be some decision-making taken out of the viewers’ control.”

Streamers have tried to solve for that reality with algorithms. But predictive modeling only works for rights owners if the viewer regularly watches games (i.e. it won’t surface sports if the viewer doesn’t watch them).

“If you are a tier one league that wants to be broad, you may not get all the exposure you need on a digital platform,” Crakes said. “Do these streamers need to turn off their algorithm and just blast games at everybody to solve for discoverability? Maybe they do, but we haven't gotten there yet.”

Even if the digital platforms reach that point, they’ll still never be able to command the reach, duration, economics, or margins of the old pay TV bundle—simply because it's not a natural monopoly system.

That’s not to say rights owners should shy away from moving some of their inventory over to the streamers, particularly if those companies are offering meaningful money for the rights.

“It gets back to the tri-cast strategy that makes sense,” Crakes said (think: broadcast, cable, streaming).

Remember, the goal is to expose as many people as possible to compelling games.

It just means large portions of the top leagues’ primary rights packages are likely to remain inside the pay TV system for the foreseeable future.