The past couple of years have seen a major shift from traditional linear broadcasting of sporting events toward livestreaming as cable providers and content owners adapt to changing trends in video consumption. Online players, particularly Facebook Inc. and Amazon.com Inc., media groups such as Discovery Inc. and Walt Disney Co., and smaller firms like Perform Group LLC and The Channel Company LLC have been investing in premium and niche sports rights.
Streaming live programming over the internet comes with technical challenges that can affect the quality of experience for viewers. However, over-the-top distribution also offers several benefits not found in traditional multichannel offerings, such as multiscreen capability, flexible contracts, lower monthly costs and ways to interact with fellow fans via social networks.
F1 TV Pro
F1 TV has launched in a number of Eastern European markets such as Ukraine and Russia in an attempt to engage hardcore fans by offering an enhanced experience. It is available in two tiers. F1 TV Access, the lower tier, provides a live data feed from each race as well as an on-demand library of past events. F1 TV Pro, the premium option, offers all the content of F1 TV Access plus livestreaming of all the races. F1 TV Pro has launched in approximately 59 markets worldwide.
Liberty Media Corp., the owner of Formula One Group, believes in a strategy of streaming content via OTT while also maintaining existing relationships with local broadcasters. For example, in the U.K., Formula One has a long-term licensing agreement with multichannel operator SKY Network Television Ltd for the exclusive rights to broadcast the races and as a result, F1 Pro TV is not available.
UFC Fight Pass
Ultimate Fighting Championship Ltd. launched Fight Pass in December 2013 in the USA, Canada, New Zealand and Austria, followed by a global expansion a few months later. With the goal of becoming "Netflix for fight fans," Fight Pass began offering a number of live events each year as well as access to its video-on-demand library of past events. Since then, the mixed martial arts promotion has signed partnerships with other fighting and submission-grappling promotions such as PRIDE, Invicta FC, Polaris and EBI to add more events as well as producing its own originals, such as "The Ultimate Fighter" and "Dana White: Lookin' for a Fight".
Similar to F1 TV, the UFC has signed international partnerships with a number of multichannel operators, such as BT in the United Kingdom licensing both Prelims and Main Events from UFC Fight Night and pay-per-view cards. In markets where no such deals are in place, PPV main events are available for purchase.
The only exception is the U.S., where fans can only buy the PPV card through a subscription to the ESPN+ streaming service, following the WME IMG Holdings LLC-owned company's extension of its deal with ESPN Inc. from five to seven years. In addition, the Main Events for UFC on ESPN cards are exclusive to ESPN+, reducing Fight Pass' live offering to the Prelims, which it shares with ESPN+. With DAZN also in the race for combat-sports OTT market share, we forecast a decline in the number of the U.S.-based paying subscribers to Fight Pass.
FloSports Inc. was founded in 2006 by Martin and Mark Floreani in an attempt to offer niche sports coverage over the internet. Six years later, FloSports introduced subscriptions. The streaming platform offers separate subscriptions to 25 dedicated channels, each focusing on one sport such as amateur wrestling, submission grappling, gymnastics, hockey, swimming, bowling and others. More than 10,000 live events are available each year from with a reported portfolio of 250 programming deals as of 2018. FloSports is currently backed by Discovery, Causeway Media Partners, LP, Fertitta Capital, DCM Ventures and World Wrestling Entertainment.
The company stated that both subscribers and revenues grew by more than 50% year over year and said it has a few hundred thousand paying accounts. We believe FloSports can capitalize on Discovery's experience with D2C sports OTT (Eurosport Player) and grow its market share. Earlier this year, FloSports signed a deal with Eurosport and acquired the rights to livestream more than 40 professional cycling events during 2019 on its portal FloBikes.com.
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New Service Launches Help Sustain Western Europe's OTT Video High Growth Rates