Well before corona times, MEDIAGENIX interviewed Arnaud Simon, CEO and founder of In&Out Stories. The realisation of the vision he expounded on in this interview, may well be accelerated by the pandemic, now that DTC seems a very attractive avenue, not only for sports organisations.
Former Eurosport France CEO (2010-15) and Senior Vice-President in charge of Content for Discovery across Europe (2015-18) Arnaud Simon has a world-class reputation of leader and influencer. In 2018 he kicked off In&Out Stories to help sports organisations act as media groups.
What added value can sports organisations offer the viewer? What is their reality on their side of the media spectrum? We thought it would be interesting to hear the opinion of an outspoken man with 25 years of experience in the sports and media industry.
Arnaud, tell us, what is the future of sports broadcasting?
A.S.: “That the two currencies for the future are fan data and content. On that premise I decided to guide sports organisations in rethinking their business model. And the first thing I point out to them is that live broadcasting is no longer enough to really engage with the fans.”
We are told premium rights rule the world of sports broadcasting.
A.S.: “Premium rights are indispensable to drive subscriptions and commercial revenues, and develop a sound business model. But such rights are few and far between. In France you have the Champion’s League, Ligue 1, Top 14, a couple of motor sports with a big fan base, and that’s about it. Now that the cable business is shrinking and stations have less resources, they will go all out for those premium rights, which means the battle will grow even more fierce.”
There was a time when sports organizations made good money from secondary rights. Now they not only have to foot the production bill, they sometimes even have to pay for a place in the programme grids, as their secondary rights are considered a liability for viewing figures. The question is whether that is still viable.
“Average viewing figures for live sports are dropping.”
They offer live viewing, isn’t that the be-all and end-all for sports fans?
A.S.: “Live remains a major component in the mix, of course, but fans are increasingly turning their attention to the highlights. There is so much content competing for their attention that they just cannot watch everything. If I’m an Arsenal fan, I’ll will watch the Arsenal matches, but all the rest I’ll watch in a different way. The fact is that the average viewing figures for live sports are dropping.”
So budgets should be allocated in different ways?
A.S.: “There is an enormous shift in the way we consume sports. ‘Near live’ or ‘behind-the-scenes’ is becoming ever more important almost to the point of becoming sufficient. So, production budgets need to be allocated differently to address new purposes: storytelling with a content mix that includes short formats. Sports organisations still need to protect their revenues on strong markets with their premium rights. But for the rest, they should go ‘direct to fan’. This comes down to turning their content mindset around.”
And in that new mindset, the focus is on the fan?
A.S.: “Yes, and that’s the opposite of what’s happening now. Take football rights. The way they are being sold now is very top-down. I mean, sports organizations, federations or leagues want to optimize their rights, selling different parts of the same competition to two or three parties. This implies that fans have to take out several subscriptions and also pay for things they are not interested in. This is an enormous problem and we see that the system has reached its limits. At some point the fan will say ‘stop’, and start watching illegal streams.”
The current model breeds piracy?
A.S.: “Industrial piracy is reprehensible, of course, but you need to examine what drives the viewer to watch illegal streams. It will tell you how they want to consume your content. Look at what happened in the music industry. Don’t force me to buy a complete album when I’m only interested in a couple of songs. Piracy will decrease from the moment the sports offer meets the needs of the fans.”
What is the best way to reach the fans?
A.S.: “The gateway to the fans, for team sports in particular, is their club, the club’s matches, and the supplemental content around the club.
For a Paris Saint-Germain fan for instance, the ideal subscription could be a PSG season ticket that enables them to watch all the PSG matches in Ligue 1 and the Champion’s League. And then you can suggest other matches. If PSG plays Marseille next, would you be interested in watching Marseille play before that encounter? Or if a player is expected to sign for PSG, would you like to see how he plays in his current club? That is how you compose an offer.”
“Sports organisations should think of OTT platform models and digital distribution, and offer much more targeted and innovative services.”
And that’s where fan data enters the game?
A.S.: “Yes, sports organisations need to offer much more targeted and innovative services on a platform or application where they can collect data about the fans and understand exactly what the fans want to watch, and how. That is why sports organisations should think of OTT platform models and digital distribution.”
A.S.: “You can’t say that it is a profitable business model yet. But they have no choice. They have to jump on the digital bandwagon. But they need to do it in a clever way, with private partners, sponsors, digital partners.
Will that be profitable?
For instance: why can’t a national or international sports federation open up to private investors to set up a league? There is an urgent need for change. The great debut of the recently born International Swimming League, a 100 % private initiative, is a very good example that a sport can be reimagined with the full support of athletes and fans, disrupting the existing model.”
What are the main challenges?
A.S.: “Whether on club, national or international level, the first challenge is to invest in content in a way that reflects the changing content balance.
That is not easy, but the process is starting. Look at what the French Tennis Federation has in the pipeline. Roland Garros is a super premium right but FFT wants to keep on investing in all types of tennis content to engage with the fans. Tutorials, domestic tier 2–3 tournaments, youth events, padel, series, beach tennis, you name it. An OTT platform will be launched in the first quarter of 2020 aggregating new tennis content that has never been served to fans that way before. Great move.
Take the most popular sport in Europe : football. Are they doing enough ? Not yet ! It isn’t enough to put a couple of community managers in a club, even if they do nice things. Today you need to invest in storytelling, which you can do with formats such as interviews and behind-the-scenes content.”
So, what should the approach be?
A.S.: “Sports organisations need to proceed step by step, taking care not to endanger the business model of their premium right. They need to launch a platform that offers supplemental content, often with free access. In the meantime they should pave the way for partnerships and aggregation. They could also experiment with this type of platform in weak markets, and get the hang of this new way of working.
This content strategy, and the experience they gain with fan data will open up a lot of possibilities. If I know that you watch tennis and live near Lyon, I can offer you a family pack to come to the Lyon tournament. Or I can invite you to an open day, or a master class from a professional tennis player.
Investments in this kind of 360 degree offers should represent a bigger part of the total marketing efforts. For the rest there are four basic rules: one-stop shopping, season tickets à la carte, good user experience and fair basic fees.”
When you talk about data we immediately think of the big tech companies who own the big data. Will they take over in the end?
A.S.: “Everybody expected the FAANGs to buy the rights. But they didn’t. Google’s YouTube, Facebook, Twitter, … they are more into storytelling and amplification. That is their raison d’être. That is also what Netflix is doing with premium documentaries about Formula 1.
Amazon on the other hand is following a different logic, first of all because they have a pay model. For them content is a way to lead people to their e-commerce marketplace. Content is their shop window for attraction, communication and credibility. Their investment in sports is still in a test phase and minimal compared with what they could do. The enormous strength of Amazon is that it is a complete ecosystem. If they know you are a tennis fan, they can offer you live streams of tennis matches, tennis gear, equipment and accessories in a personalized package.
Whether Amazon will invest heavily in sports rights will depend on what Apple and Disney+ will do. Note that Disney+ will be bundled with ESPN+. It’s early days yet but I think sports will never be one of Amazon’s priority axes.”
Can’t sports organisations join forces on a common platform, like the “Salto” model in France?
A.S.: “It is true that federations can join forces. There is an interesting model in Spain where LaLiga TV aggregates and broadcasts other sports than football on its platform. But if you want to be part of such a grouped offer, the starting point is to have interesting content and to already be present in the digital world.
So yes, there are associations between federations, there are private investors who participate in broadcasting, the big tech companies could also be aggregators, and hyper e-commerce marketplaces may want to add a niche. The thing is that you have to be ready for any opportunities that may arise from that, or you risk being left behind.”
What about the path the NBA has taken in North America?
A.S.: “The NBA is really efficient in innovating their distribution. They are very aggressive on digital. They want to be on as many platforms as possible and deliver a lot of behind-the-scenes content. This is sometimes difficult for the more conservative sports organisations who want to keep control of their content. But this way you don’t’ have the same attraction to fans because the content feels too constrained.
NBA’s ‘money–time’ subscription model is something you could apply to football: you pay 1 euro, for instance, to watch key moments such as extra times or penalties, instead of the whole match. So yes, you could say that the NBA is showing the way, and that in Europe we are lagging behind.”
“On Twitch you don’t just consume eSports. You interact with the community. This kind of proximity, connection and engagement should be a source of inspiration for traditional sports.”
Talking about inspiring examples, do you think the phenomenal success of eSports is something from which traditional sports could draw lessons?
A.S.: “Definitely. Just look at what’s happening on Twitch. On this eSports platform I can stream my own content or watch competitions live, or with a freemium model with fidelity points have privileged access to tutorials. It is a platform where I don’t just consume. I interact with the community. Absolutely genius. This is the kind of fan experience traditional sports need.
Have there been privileged master classes with fans by, say, Deschamps on a digital platform? I don’t think so. This kind of proximity, connection and engagement should be a source of inspiration. Creating a universe where the fans not only enjoy the competition, but their sport in a broader sense.”
Do you think eSports represent a challenge to traditional sports?
A.S.: “eSports engage tens of millions of fans worldwide and with events, competitions, full stadiums and fans they tick exactly the same boxes as traditional sports. That is new to traditional sports, but it shouldn’t be a problem. Only, they will have to accept that they now get a smaller slice of the total attention cake. While people are watching esports they cannot watch traditional sports. People do still have a big appetite for traditional sports but this will have to be met with different formats and distribution models.”
And maybe sports organisations can harness the success of eSports for their own digital transformation?
A.S.: “Yes, but all esports fans will tell you that if you just want to use esports as a marketing tool to reach the young and draw them to your sport, that has every chance of failing. Authenticity is key.”
Thank you for this interview.