In February 2015 Sky and BT Sport paid a record £5.136bn for live Premier League TV rights for three seasons from 2016-17. This was a 70% increase on the previous deal held by the broadcasters. Under the new contract, 168 games would be broadcast live at an average cost of £10.2m per match.
Fast forward to today, the aftermath of the 2016/17 season and the end of the first season of the record football TV rights deal and for Sky, the latest news on viewing figures does not bode well for the next 2 seasons of the deal. Per the latest report from the Financial Times, average viewing on Sky’s live TV channels fell 14% over the past season despite the heavy investment and the extra live football it secured.
Sky has pointed to several factors which will have contributed to a decline in live Premier League TV viewing. The Olympics Rio games which crossed over into the start of the football season, the relegation of two well-supported clubs, Newcastle & Aston Villa and the increase in games, which allowed Sky to show more of the ‘less popular’ clubs.
With a Sky subscription costing, upwards of £50, other ways have been found to watch live football. Illegal streams of football have never been higher among ‘millennials’ who are a key demographic for football viewing. A recent report found that 54% take advantage of piracy to watch events. The Premier League announced back in March, its plan to fight back against piracy in order to protect its business model ahead of future football TV rights deals.
Away from the illegal activities, people’s viewing habits have changed. They have grown accustomed to watching what they want when they want. Which poses a headache for traditional broadcasters. BT acknowledged that viewing habits are changing, with many people watching on digital platforms including the BT Sport app and YouTube. “For example, more people watched the UEFA Champions League final with us this year across digital and TV platforms than last year.” Of the 6.5 million people who watched its coverage of the Champions League final, 4.4 million did so on TV and 2.1 million across digital platforms, BT said.
So how much trouble does this put Sky in? Although this hurts commercial revenue, Sky is buoyed by their own figures which ‘show the total number of people watching Premier League coverage last season was at its highest for three years’. Said figures are based on people watching their Premier League coverage across any platform for any longer than 15 minutes.
David Bond writes for the Financial Times ‘The broadcaster pointed to a 31 percent increase in viewing through Sky’s own streaming services Sky Go, which allows subscribers to watch on a smartphone or tablet, as well as Now TV, where football fans can buy day passes for £6.99 instead of signing up to a longer-term pay-tv deal.’
Sky clearly has taken successful measures to protect revenue streams and can be held as an example to all broadcasters on how to adjust to changing viewing behaviours. Being a subscription based service, ad-revenue is not the be all and end all. Sky will be looking to see a return on their sizeable investment in the next 2 seasons. The latter half of last season saw an increase in viewing figures and with no big summer events the likes we saw in 2016, and continued investment by clubs into big star players could see a more positive result for the broadcaster this time next year.