In the wake of some expected cutbacks in premium streaming entertainment content spend due to massive start-up losses and increased competition, global sports content on subscription OTT services is expected to climb 64% this year to $8.5 billion, according to Ampere Analysis.
Ampere estimates sports content costs will constitute 21% of streamers' overall content expenses this year -- versus 13% a year ago. General entertainment programming is still the bulk of streamers content costs.
The biggest global streamer was sports-focused, London-based DAZN, which spent around $2.6 billion in 2022 on global sports content. DAZN's main sports include boxing, mixed-martial arts, wrestling, women's soccer and extreme sports.
Amazon Prime Video was next at $1.6 billion -- this mostly coming from the first year of its 11-year long NFL “Thursday Night Football” package of games. ESPN+ was at around $400 million.
Seven other streamers followed with much lower results -- Viaplay, Abema Premium, Optus Sport, Apple TV+, Telstra, Rakuten TV, and Peacock. Of this group, only Apple TV+ and Peacock are U.S.-based.
Analysts are expecting a bit of a shakeout among U.S. streamers, partly due to soaring financial losses and a possible recession that will put more competitive pressure on the marketplace.
Yearly losses for the biggest premium streamers (without the profitable Netflix) can now range from around $1.75 billion to $2.25 billion. This is a result of massive entertainment content deals, which can range from $3 billion (for Peacock this year) to $6 billion (Paramount+ in 2024) to $17 billion (Netflix in 2023).
Still, the shift in overall sports content moving exclusively to streamers will move slowly.
“This is in part because of the nature of sports rights deals, which typically span multiple years,” says Jack Genovese, research manager at Ampere Analysis. “It is also due to the sheer value of sports rights [on broadcasters].”
Genovese adds that sports deals among broadcasters will continue for some time due to the need for “high quality, low latency feeds.”
Long term, sports on streamers will “experiment with content, distribution and monetization.”