Cinco de Mayo is a holiday of independence celebrated by Mexicans and Mexican-Americans alike. This weekend has also been nationally anticipated as one of the marquee dates in the boxing calendar year. Over the past decade, some of the biggest fights have featured Oscar De La Hoya versus Floyd Mayweather, Diego Corrales versus Jose Luis Castillo, and Manny Pacquiao versus Ricky Hatton. Boxing fans from far and wide gather together to watch this Pay-Per-View special over some chips and dip. The Mayweather versus Robert Guerrero match on Saturday won’t be any different.
The conception, however, that viewership hasn’t changed therein lies the problem. If one isn’t going with a group of people to a friend’s pad to catch the fight, then one is going to a bar that bought it. In Las Vegas, where these fights usually take place, fans cannot watch it at bars or casinos, unless one pays a premium. There’s always the avenue to log into illegal websites like FirstRow Sports or VIPBox Sports, which are growing in acceptance by millennials who can’t afford to have both internet and cable services. But these outlets don’t provide the same experience and one’s likely to have to buy Wi-Fi service elsewhere, especially in Vegas. These primetime events shouldn’t solely be distributed by one media vehicle or cornered to a lone cable provider’s network any longer.
Thus, accessibility continues to be an issue in the sport of boxing and should foster an impetus to modify the overall business model.
An underreported newsworthy item related to this subject was HBO Sports’ President’s, Ken Hershman, presence at Harvard Law School’s Sports Law Symposium. The Verge detailed that he said boxing will be shown live on HBO Go, the channel’s cable-provider-only app destination, by the end of 2013. At the moment, just supplementary and delayed sporting telecasts are offered on the platform, be it through smartphones, tablets, computers, or smart TVs. HBO’s Senior Vice President of Corporate Affairs, Jeff Cusson, later rebuffed the possibility of boxing being livestreamed by stating “no immediate plans” to The Verge. Despite conflicting statements from the network’s behalf, there’s no doubt this opportunity has floated around their private programming strategy meetings.
Currently, HBO Go comprises a mere two to three percent of the company’s total audience. This app has already surpassed 6.5 million downloads and 85 percent of users have watched more of their shows as a byproduct of it, per The New York Times. These figures represent a measured growth derived from controlled distribution. At the same time, though, HBO is perhaps wary to immediately commit the resources to expand this medium’s capabilities. There have been numerous reports on the rampant piracy over their most popular show, Game of Thrones, that accrued north of a million illegal downloads—163,000 simultaneously—during its season-opening episode and 4.3 million downloads from last year’s season-finale, per CNN Money. This widespread circulation has led to even The New York Times’ resident tech expert, Jenna Wortham, admission to sharing logins.
This negative circumvention certainly has proliferated to a point where HBO and other network executives pause before revamping their digital content efforts. However, they should look beyond their own history and examine the tangible potential that livestreaming something like boxing would have on their bottom-line, especially in relation to the entire sports landscape.
Before analyzing the field, though, this Mayweather bout does shed some light on the opportunity missed and gained via livestream. HBO lost out to Showtime for his future broadcasting rights at an undisclosed figure, which would virtually guarantee him the “richest individual athlete deal in all of sports.” According to Forbes, the network netted 9.6 million PPV buys and $543 million in TV revenue off of his nine fights in their past partnership. That’s an average of $60.3 million per match. These kinds of returns are extremely hard to replace, particularly when these events are essentially continual one-offs. What Showtime is offering Mayweather in additional promotional appearances, could’ve easily been subsidized by livestream options of in-stream ads or exclusive bonus pay-per-view choices.
“The worldwide leader in sports,” ESPN, understands fans’ changing viewing habits and have built platforms to accommodate them, while staying ahead of networks’ distribution leverage. As noted by Bloomberg Businessweek, their $5.6 billion agreement with MLB runs through 2021 and provides them typical broadcasting rights in addition to the lucrative potential to livestream content on mobile. Why is mobile such a critical piece in this partnership? Owners of wireless connected devices are expected to eclipse 24 billion by 2020 and spawn a $1.2 trillion—yes, that’s trillion with a “t”—market, per Gigaom. All ESPN would have to do between now and then is to sell ads and subscriptions for the livestreamed games on WatchESPN as the market matures.
Simpler put: “Right now, what you can pay for a property is based on what you can bring to a property, how can you surround a property,” Norby Williamson, ESPN’s Vice President for Production, told Businessweek.
As far as sports leagues are concerned, the NBA, who has accomplished distinctions in the digital space, has constructed a model that works for them through its basketball-specific programming in NBA League Pass. Fans have had the option to purchase the broadband version of League Pass to include all 30 teams for $49 or 5 teams for $29.99, which could be access via the NBA Game Time App. This subscription-based service is feasible because of the 82 games regular season and the wealth of superstars spread across the league. Yet, the NFL and the Super Bowl as a one-time only event better aligns with boxing. CBS recorded 3 million unique viewers to jump by 43 percent compared to last season’s free livestreamed big game, and 10 million live video streams coupled with 52.5 million social mentions, per Engadget. The demand and adoption rate are certainly there based off this comparable sporting event.
Speaking of social media, HBO Sports could’ve juxtaposed livestreaming with an exclusively curated Twitter feed within the HBO Go. Mayweather has close to 4 million Twitter followers that networks could’ve leveraged to increase his volume and monetization. During the last Pacquiao fight, Twitter went haywire when Justin Bieber—who is a part of the Money Team—tweeted out an Instagram meme aimed at him. Something as controversial as this incident and channeled the right way would manifest to a practical business solution. Better yet, HBO striking a partnership with SnappyTV would make more sense as a second-screen option than Turner Sports’ March Madness coverage because boxing highlights would translate a lot better on this medium due to the live, high, and immediate demand.
Arguably the best commissioner in sports, David Stern, said it best: “There is value on each platform. And the more platforms you have, the more value you can place against a rights acquisition.”
Boxing as a sport, though, is nearly in extinction. The mega-fight that the world has been waiting for between Money Mayweather and Pac-Man will never happen. Maybe HBO Sports investing on livestream technology can revitalize a dieing sport and provide fans a slimmer of hope that one can witness this fateful knockout punch…