Lessons from the frontline: How sports leagues can seamlessly transition to DTC distribution

By Manik Bambha

Just as rising sports stars emulate the style and strategies of legends like Lionel Messi in football or LeBron James in basketball, smaller sports franchises often mimic the strategic moves made by their larger counterparts. The recent buzz disrupting traditional sports viewing habits involves top-tier leagues – already beneficiaries of substantial TV and OTT rights deals – setting up their own direct-to-consumer (DTC) platforms for content streaming. The reasons for this move are not hard to understand.

The beginnings: From TV and OTT

Transitioning from traditional TV to internet-based streaming is nothing new. Streaming services, born in the early 2000s, provide customers with a vastly superior viewing experience. Faced with this alternative, cord-cutters have steadily moved away from cable, resulting in the lowest TV viewership levels since 1992

But amid all of this, it’s not just broadcasters who are feeling the pinch. Sports franchises have seen their revenues decline. In some cases, they’ve lost money altogether, with broadcasters defaulting on payments, or even declaring bankruptcy. Faced with financial jeopardy, sports franchises could still take solace in the fact that OTT majors like Netflix, Disney and Amazon were more than ready to take up the slack. But these OTT partnerships had new lessons for sports leagues and related content owners.

Self-owned DTC: Putting control in the hands of sports franchises

While OTT platforms do democratise content to an extent, they also perpetuate traditional constraints. Although the OTT mega deals make headlines, the hefty paychecks go to the most prominent names, leagues, and games. This dynamic leaves smaller players, leagues, collegiate games, and niche sports fighting for airtime and revenue.

Besides exposure, the most significant disadvantage for franchise owners is that OTT services are walled gardens that don’t grant access to granular viewer data. Sports franchises, therefore, have no way to use this data to understand their viewers or shape effective monetisation strategies across targeted ads, ticket sales, fan engagement, and merchandising.

Because of these drawbacks, many sports franchises are choosing to set up their own DTC services, either as a standalone platform or as an adjunct to their existing TV and OTT channels. This gives them better control over branding, sponsorships, and advertising revenue. And getting real-time insights into viewer behavior and preferences lets them sharpen their content and audience engagement strategies, resulting in higher profitability and fan affinity.

This approach is working for the emerging stars of DTC sports platforms. Take the example of RugbyPass, the world’s largest rugby network, which streamed 284 games in its inaugural season, reaching audiences in 92 countries. F1 TV Pro, Formula One racing’s self-owned DTC platform, has even turned the tables. Already available in 64 countries, it is now allowing Amazon Prime to share its feed, allowing it to reach an additional 100 million subscribers. Launching its DTC platform has also doubled the revenue of Italy’s National Basketball League, Lega Nazionale Pallacanestro, with subscriber growth of 100% year-on-year. The success of these DTC sports streaming platforms has lessons for other aspirants.

How your franchise, too, can make DTC streaming its winning strategy

As DTC technology becomes more accessible and affordable, many more sports franchises are considering joining the trend. However, even if a franchise has prior experience partnering with an OTT service, launching a self-owned DTC platform requires an entirely new playbook.

Content strategies and inventories. Rights management. Navigating the legal maze of existing geographical partnerships. User experience design. Engagement models. Revenue streams. Third-party linkages. Regulatory compliance. And these are just a few considerations. Launching a DTC platform is deceivingly simple.

While much can (and has) been written about these aspects, three deeper truths underpin these complexities.

1) Transitioning to DTC is a full-time job: View your DTC operation as you would a new sporting discipline, with its own rules and nuances. Your core team needs A-players right from the implementation stage. Make sure that every operational unit is represented so that the team has a holistic view of the considerations at hand, from UX to rights management and everything in between.

2) Stay realistic: Rome wasn’t built in a day. Neither, indeed, was Netflix. Seeing all the bells and whistles that other platforms offer may spur franchises to set unattainable objectives. Remember that today’s OTT behemoths have developed these functionalities after much experimentation and a few wrong turns. Besides, what works for someone else may not necessarily work for you. Getting your core operation and goals right should remain your primary objective, post which you can (and should) add more functionalities incrementally. Finally, have realistic timelines at hand. It’s likely to be a new experience for everybody, and compromises could end in disaster. You are only going down this road once, so make it count.

3) Stay focused on data use cases from day one: Access to data is a DTC operation’s raison d’être and constitutes its most significant return on investment. Making data capture and analysis a central part of your blueprint will have your platform delivering value right from its first stream. Notably, plan how every aspect of your enterprise can use this data to drive success. Doing this will make your DTC platform a robust revenue strategy, not just another dissemination channel.

It all starts with a tech stack partner who gets you (and your audience!)

Underpinning all your efforts, eventually, is how you use the technology that is driving DTC streaming. Choosing a partner, too, has several considerations.

At the heart of your efforts is the technology powering DTC streaming. The choice of a partner brings with it several considerations.

Consider, for instance, your tech vendors’ cloud capabilities. A multi-cloud OTT tech stack partner equips you with choice, flexibility, and scalability – essential elements for emerging DTC platforms. Your ultimate goal is to ensure high performance across the myriad platforms and end-user devices that constitute the DTC universe.

Given the complexities involved, the guidance of an experienced tech player could be your differentiator. Look for a tech stack partner who’s not just an infrastructure vendor but a true partner guiding your A-team at every stage of the implementation. It should go beyond setup, maintenance, and support to offer advice on audience priorities, market opportunities, and trends. And that only comes from experience.