17 May 2020
Posted in Technology
Cancelled sporting events due to COVID-19 boosts esports content and introduces licensing issues
While the cancellation of most major sporting events due to COVID-19 has led to uncomfortable negotiations regarding licensing rights, it has also provided an opportunity for esports, says GlobalData, a leading data and analytics company.
Tammy Parker, Senior Analyst at GlobalData, comments: “Content rights holders and pay-TV providers must sort out license fee issues due to cancelled sporting events as soon as possible to insulate against customer enmity and defections. Despite canceled live games, pay-TV providers remain on the hook for paying sports leagues such as the NBA, NHL, MLB and NCAA to carry their content, at least until contracts can be renegotiated. Therefore, service providers are continuing to charge their end users the unpopular regional sports network (RSN) fees, even though live sporting events have been cancelled.”
RSN fees can add close to $10/month to a customer’s bill – even if that customer never watches a local professional or college live-sports broadcast. Some consumers are starting to demand refunds and the elimination of those fees.
Parker continues: “Esports content was on a steep upward trajectory before the current crisis. Now it is benefitting from being one of the only games in town.”
Sports channels and major broadcast and cable networks will continue filling the void created by the cancelation of traditional sport events by airing alternatives such as live esports matches, sometimes played by athletes who play the real-life versions in the NBA and NASCAR. They are also charging for sports channels such as ESPN that are bundled into service packages, even when those channels have no live traditional sports on the schedule. To help justify what it charges pay-TV providers for its content, ESPN has turned to esports. For example, it dubbed April 5 ‘Esports Day’ and delivered 12 consecutive hours of programming on ESPN2.
Parker concludes: “Esports in the US is finally having its day in the sun. Communications service providers should take this opportunity to build on their existing initiatives to sponsor events and teams, which are becoming more well-known to mainstream audiences.”