The media and entertainment space is evolving, with sports being a high-growth area that can provide immense opportunity for those that have a smart strategy and execution plan in place. In 2018, this sector generated more than $49.5 billion in media rights revenue, up from $43.6 billion in 2016. Unsurprisingly, 94% of this revenue comes from linear broadcast TV rights. However, while the majority of live sports content is still distributed via linear broadcast, cable and telecoms networks, the industry is making way for OTT.
Although OTT is still a relatively small part of the revenue model for rights owners and service providers, consumer demand for streamed sports content is continuing to grow and players around the globe are taking notice. Amazon recently secured distribution rights for the English Premier League (EPL) in the 2019/20 season, opening this content up to a new set of subscribers. Meanwhile, operators and broadcasters are making significant investments to gain access to the distribution rights across platforms.
Then there is viewer demand for sports entertainment, anywhere, anytime and on any device. While OTT sports streaming can open up exciting new mobile opportunities, it presents major challenges that only a select group of service providers has overcome. This includes scalability and synchronization issues across video devices. And, while technology components are increasingly accessible, assembling and deploying a high-performance OTT direct-to-consumer services remains challenging from a technical standpoint -- and it can result in high integration costs.
Fortunately, there are broadband networks, low-latency CDNs and device technologies that can address these issues and can drive live sports streaming adoption and revenue generation. Unfortunately, this increase in value comes at a cost. Sports content piracy is growing at an alarming rate, damaging the industry and pushing down the value of rights in all international markets.
Easy access to unauthorized devices, combined with the growing worldwide appetite for live sports, are forcing rights holders into a front-line position in a war against illegal content distribution. Piracy is no longer the unsophisticated offerings of years gone by -- today "commercial piracy" offers a high-quality, professional-grade experience at a low cost. And the piracy ecosystem is continuing to evolve. With broadcasters prepared to pay $3.3 billion for NFL rights, what can sports leagues and other players do to control illegal rebroadcasting and streaming?
The good news is that there is a solution. However, the solution cannot just be one tool or tactic alone. It takes a comprehensive approach. This includes a unique combination of anti-piracy technologies and services, such as forensic watermarking, global network monitoring, server takedown capabilities, technical countermeasures and legal actions, as well as collaboration within the industry to make sure consumers still look to get their content through legitimate avenues. Let's take a deeper look into these areas.
It starts with technology. With the right technologies, service providers and sports content owners can identify illicit streaming services, track the source of leaks and take action against illegal streamers. This is possible for both broadcast and OTT-distributed sports content, through a unique, invisible identifier -- the forensic watermark -- embedded into the content itself. In combination with CAS and DRM technology, watermarking provides a complete content value protection solution to secure, mark, monitor, quantify, identify and stop the pirates in their tracks.
Smart technology is only part of a much bigger effort that enables sports leagues around the world to take the fight to the pirates. Collaboration, intelligence and legal action are also vital. With only a fraction of live sports content distributed directly from the leagues themselves, broadcasters, pay-TV operators and OTT providers, as well as Internet service providers (ISPs) and cloud infrastructure vendors (CIVs), must do their part to ensure their content is not illegally re-distributed. Working with an anti-piracy service provider, sports content owners can gain evidence against the pirates, tracing the illegal streams from the source to redistribution. In turn, this can reduce the number of consumers accessing content illegally, as it limits potential earnings for the pirates.
Rounding out the comprehensive approach is collaboration. Collaboration with distribution partners is essential to entice consumers back to the pay-TV environment. Leveraging flexible distribution models, particularly OTT streaming, sports leagues and service providers can work together to develop new pricing and packaging models that will address the needs of both super-fans and casual viewers, increasing reach while driving up profitability.
Sports OTT streaming is by no means an easy ride, but the opportunity is significant. The vision is possible today. It is a next-generation, cloud-based, highly scalable, end-to-end and productized OTT streaming service for live and on-demand premium content, integrated with sports data sources, social media platforms, payment and loyalty systems to maximize fan engagement, reach and monetization. Combine this with broadcast-quality video with low and predictable delay, perfectly synched across all devices, and a comprehensive approach to anti-piracy technologies and services -- and you will be set to win in the sports OTT game.
Once this is established, the possibilities for the future are endless. Not only will consumers tap into legitimate channels for the high-quality events they want, but providers can better connect with fans across the globe. This could include pre-game communications, interactions during an event and post-event marketing opportunities and long-term engagement for the ultimate fan experience. When it comes to live sports, the possibilities are limitless.
— Ivan Verbesselt, Senior Vice President, Marketing, NAGRA