The Future of Linear Television Depends on Sports

From Zenith39s point of view it39s digital that39s driving all that I would add largely by making advertising affordable to smaller businesses The recent COVIDtriggered cultural switch to leave another39s employ to start your own enterprise is going to feed that SMB small and midsized businesses fire It looks good for agenciesHow does it look for larger advertisers and for media companies Media companies having invested in a huge and successful distribution platform had hoped to be able to milk those investments for a few decades Streaming and to come ATSC 30 both forms of digital have made distribution efficient enough for individuals to stream their own shows if they wanted to This means the period planned for milking has to turn into yet another period for sowingDuring the shift into streaming by the media companies anything can happen It39s not like during normal times when the shares of audience can be expected to change relatively slowly when looked at from the network level not from the series level No now the shares could look quite different on the streaming side vs the linear side because of the consumer sitting in judgment of how the big media companies handle the transition And that depends on a host of factors mainly the content But consumers are also leaning into SVOD to avoid ads Netflix Amazon Prime Video and Disney are SVOD Observers predict that the portion of the video audience accessible to advertisers is going to shrink And it appears likely that adsupported TV in its current form will eventually shrink to people whose pocketbooks don39t have a lot to spendReturn to sponsorshipAt TV39s birth and for its first decade and a half sponsorship was the dominant form of TV advertising It was also such a powerful sales medium mostly using both the power of demonstration in ads and castpresented commercials that the expression quotcans flying off the shelvesquot was oft used to describe the mediumIn the early 1960s this began a rapid seismic shift to scatter plans as media researchers a new breed advised brands about the importance of dispersion for reach Now 60 years later we have pods of up to 20 ads on some channels The original social contract has been ahem breachedSports is the One Big Thing that is growing on linear TVStandard Media Index SMI reports that between January and November 2021 TV sports was at its highest level since January 2014 when SMI began fully operating in the US Sports media experts opine that it39s the historic top level everquotThe importance of sports to linear TV has never been more prevalent than in 2021quot notes media consultant Brad Adgate quotOf the 50 toprated primetime telecasts of the year 43 of them were sporting eventsquotKey findings courtesy of SMIYou are indeed correct that sports39 share of national TV ad dollars indeed hit a new high during the latest yeartodate period ie Jan amp8211 Nov 2021Total Sports 28 of ad spendLive Sports new high 22All Other Sports eg Sports Talk Sports Docs 6 of ad spendLive sports stood out with a CAGR of 3 during the periodLive sports also hit a new high of 83bn during Jan amp8211 Nov 2021 This surpassed the 82bn level last seen in Jan amp8211 Nov 2016Entertainment 61 is still the genre leader during the yeartodate period but share has waned over timeNews 10 maintained its newly established doubledigit share but receded vs last year39s election period 12 shareClick here for the full reportFootnote News also grew its share 20142021 from 7 to 10Twentyeight percent share of ad spend but only 9 share of content costsTwentyeight percent sports share of total TV ad income compares with only 9 of content investments 220B for total content vs 20B for sports content Likely this portends that the rights costs to distribute the video for live sports and other sports related programming will be going upThis is relevant because it is a pivot point of history If those who control linear TV keep the sports rights the core audience to the original television companies will always be there and not limited to downscale audiences willing to watch or ignore long pods of commercialsIf the SVODs win over some of the big sports rights Amazon made a 1 B NFL play recently linear TV will shrink faster and the marketing people at the networks will be key to keeping the old audiences through the transition into the new technology And winning new audiences The last to leave the old distribution platform will of course be the older and less affluent segments Sponsorship and branded entertainment will probably become more automated and scalable because it will need to beIRI independently confirmed that almost double ROAS for Sports in CPGSponsorship will parallel ad growth within sports as more and more advertisers discover the real sales impact of sports watching something alive and real viscerally engaged the next moment is totally unknown and will be a surprise to everyone It39s the oldest form of public entertainment in the world and the most survivableSports could be 30 of the content investments by 2030Beyond the live games the athletes themselves are the next wave of social media influentials now that the NCAA has blessed NIL college players are now allowed to receive monetary compensation for licensing the rights to their name image and likeness There will no doubt be a stream of new programs of all kinds involving athletes of all sports and at all levels with a backend of eSports videogames and VRAR what they are now calling XR Virtual Reality and Augmented Reality will mesh with video content in the next ten years in ways beyond those I39ve novelizedMaking this next transition will demand the best of all of us Listen to your kind and wise inner voice Listen to everything Choose a path that is inclusive and empatheticWhat does quotempatheticquot mean in the context of marketing advertising and media Please tune in next weekClick the social buttons to share this story with colleagues and friendsThe opinions expressed here are the author39s views and do not necessarily represent the views of MediaVillagecomMyersBizNet

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The Future of Linear Television Depends on Sports

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Bill Harvey

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