A jewel thief, the joke goes, once asked a New Yorker where he could locate New York's most precious diamond. "It's the one in the Yankees Stadium," said the New Yorker.

The joke may be apocryphal, but there's no denying that sports has an outsize influence on society. Loyalty towards teams and admiration (if not outright adoration) of sports stars leads people to stay up the small hours, skip classes or call in sick to work when there's a big match on. Countries have even gone to war over the outcome of a key game. What's more, besides time, sports fans are more than willing to spend money – an average of $664 per head in the US, as per a 2021 study - on stadium tickets, merchandise and, of course, to watch their favourite sports live on screen. It's a huge market that has been around since the first crackly radio broadcasts and is only getting bigger.

What has changed, though, is that a lot of the money in the sports broadcast business is shifting from traditional TV to the new kid in town - OTT streaming services. What we’ll be discussing here why this is so. And, how an OTT platform can leverage the power of sport to draw in and retain a committed user base, ensuring its long-term profitability.

OTT: Changing the way we consume sports content

People glued to TV screens during an important sporting event is nothing new. What's fundamentally changed things is that the screens are no longer the front-end of linear, or 'dumb' TVs, but of a variety of Internet-enabled devices. Thanks to OTT platforms, you can catch the next NBA game on a large screen in a sports bar with a gang of friends, watch it on TV at home with family, or simply stay glued to your phone during your commute to work.

OTT streaming has also broadened audience bases for sports. It's now common for Indian fans to have vociferous arguments about their favourite English Premier League teams, or for Americans to wake up at 2 am to watch an Indian Premier League cricket match. The numbers also reflect this shift. 50% of the U.S. population regularly watches live streams, with sports making a significant contribution. Monetization models are also becoming more dynamic, given that more than half of live sports viewers are willing to pay for online sports streaming .

While pure play sports streaming platforms like DAZN and Eleven Sports have established a niche in the market, the biggies in the business are not far behind. Disney's acquisition of ABC (and, hence, ESPN) has given it a huge boost in overall profitability – 40% of its subscribers now opt for its add-on ESPN+Hulu subscription. Sports franchises are also jumping bandwagons. Amazon Prime's 11- year contract for the rights to Thursday night NFL is worth a whopping $1 billion per year. Significantly, it was the first time that the NFL had ever signed a contract for exclusive all-digital streaming. Meanwhile, NFL Sunday, too has a new digital home: YouTube.

Other geographies are following suit. Italy’s Serie A’s recent deal with DAZN, for example, was at the expense of linear television provider Sky Italia. The stakes have gone so high that there's now intense competition for rights even between OTT platforms. In India, it's estimated that Disney+Hotstar could lose up to 40% of its subscribers after it was beaten to the IPL's digital rights by Viacom 18. This, even though it did win the television rights for the massively popular cricket franchise. [GU1]

Are you late to the sports game? Not really.

Industry behemoths may have had a head start in sports streaming, and certainly have pockets deep enough to match the demands of large sports franchises. But, with a clear strategic focus, emerging players in the VOD space can make sports the centre of its viewer acquisition, and subsequently, growth strategy. I see it as a three-pronged approach.

1) Go local, go niche: They say that it's tough to make an elephant dance, and it's very true in the world of sports streaming. A Netflix or Amazon Prime may be huge enough to corner large sports franchise's rights, but they may not have the reach, or the commercial desire, to cover smaller local leagues. Yet, there's a huge demand for local content. College basketball and athletics in the US, local football in pockets of India like Bengal, Goa and Kerala, or lower-league football in the UK may not have a global audience. But they have a huge potential that remains mostly untapped simply because there's a paucity of broadcast networks willing to cover them.

The same holds good for less-popular sports like lacrosse in the US and Canada or kabaddi in India. They may be niche, but they can rack up the numbers – India's Pro Kabaddi League raked in over 200 million viewers in its 2022 season. Catering to these audiences not only gets a platform eyeballs, but an audience base that will also be more receptive to view the platform's other content. A great way to think about this: Sports live streams bring in viewers, high quality content keeps them engaged. There's no either-or here.

2) Make technology a leveller: The technology that drives the OTT industry changes dramatically, and so does audience behaviour. This is especially so when live streaming. It's an ultra-dynamic environment, prone to sudden surges in traffic, massive numbers of concurrent viewers and the additional complication of a diversity of end-user devices. So, it's important that the technology platform an OTT service uses can cope with these dynamics, especially since sports is a second-by-second experience, which no fan wants interrupted.

This apart, the arrival of 5G has made streaming even more different from regular TV. Platforms now have the technological means to allow viewers to choose from multiple commentary options and viewing angles or replay key segments of a game. These functionalities are already being offered by larger OTT players who cater to the same audience, so having them gives a smaller platform a level playing field from which to compete.

3) Have an effective multi-device strategy: When was the last time you watched TV without fiddling with your phone, or reaching for your tablet? You aren't alone. US households now own an average of 11 connected devices, of which seven have screens to view content. Any effective OTT customer engagement strategy needs to have enough touchpoints to keep viewers engaged on multiple devices, and not just on their main screens. We like to call it "making them lean forward" - actually interacting further while the main sports content plays. So, while your content unfolds on, say, a smart TV, your viewers could have the option of betting on the game, taking an audience poll, chatting with fellow fans or boning up on team statistics.

Social media integration also contributes greatly to your platform's 'stickiness.' Giving users the ability to share and discuss sports content greatly improves engagement rates. It helps amplify your content by making it available from a trusted source – your primary users themselves. It also gives your platform an additional revenue stream, as each social media platform lets you reach more viewers, who are most likely to be receptive to the sports content you serve up.

Summing up: Sports live streams brings new viewers; other genres get them to stay

All in all, if you haven't already factored sports into your VOD platform's growth strategy, do it now.

Study your local ecosystem, find sporting possibilities that go beyond the obvious, assess where you can fit in. And, once you've done so, find complementary avenues to keep your fans engaged.

Your viewers, and your bottom-lines, will thank you for it.

(The article is written by Mr. Manik Bambha, President and Co-Founder, Viewlift)

(Articles under 'Fortune India Exchange' are either advertorials or advertisements. Fortune India's editorial team or journalists are not involved in writing or producing these pieces.)

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