Today’s guest post is by Peppercommer Chris Gillick.
Yesterday, the NBA announced its most recent broadcast rights deal with Disney and Turner: a whopping 9 year contract for $24 BILLION through the 2024-25 season. This deal is further confirmation that broadcasters and advertisers are placing an ever-increasing premium on sports content. (Sorry Real Housewives.) Since fans still watch sports programming almost exclusively live in an on-demand world, broadcasters are willing to pay ever bigger bucks to reach these captive audiences. Unless someone is a competing coach or scout, no one DVRs games.
The biggest buzzword in our business over the last year or two has been “content marketing.” If brands don’t create and share their content with the right audiences at the right times, they will fall behind their competition; Peppercomm continually stresses this to our clients. Sports is no exception, and leagues are hardly resting on their laurels of fan goodwill, offering more interactive content than ever before and more forms of delivery though online streaming and mobile channels. (The NBA deal addresses this change in viewer behavior in its new deal.)
Because content is now so widely available and assumed to be free, at what point are fans going to revolt at the higher cost of programming? This new NBA contract nearly triples the rates that Disney and Turner are currently paying to broadcast games, and that drastic increase will be in part borne by cable and satellite subscribers. This begs the question of how much longer fans are willing to put up with the higher costs of a cable package before feeling priced out of their favorite teams and leagues, if they haven’t been already.
But in the end, content is king, and ESPN and TNT are betting that consumers will continue to pay a ransom for it.