Amazon’s “Diamond” points to Open Caching for live sports streaming

In the current turbulent media and entertainment era, live sports stands out as a shining example of premium content. This distinction has led to a massive rise in costs, with the annual SportBusiness Global Media Report stating the global value of sports media rights has increased to a record high of almost $56 billion in 2023 after decades of 2%-3% annual growth. Although in-stadia attendance has declined in certain markets, the at-home audience via traditional cable, satellite, and broadcast TV has grown – while viewing via OTT delivery has skyrocketed. However, sports broadcasters face several issues, and these come with regional nuances.  

Regional live sports adapt to a streaming world

In the US, some regional sports networks (RSNs) are struggling due to the increasing trend of cord-cutting, where viewers opt for streaming services over traditional broadcast, cable or satellite TV, which has led to declining subscriber numbers for the networks. This shift reduces their cut of subscriptions and potential advertising revenue, even as advertisers allocate more of their budgets to digital advertising and streaming platforms.

The most recent example of the impact of this trend is Diamond Sports Group, which entered Chapter 11 bankruptcy protection in March 2023. In a positive move, in January this year, Amazon announced it would invest $115 million to own 15% of Diamond Sports Group to help the struggling Bally Sports regional sports network exit Chapter 11 per the final decision of the bankruptcy court. According to Variety, Amazon’s investment will unlock a commercial arrangement to make it Diamond Sports Group’s primary partner for customers to purchase direct-to-consumer (DTC) access to stream local Diamond Sports Group channels. This includes access to all local DTC content, including live MLB, NBA, and NHL games, and pre- and post-game programming for the teams for which Diamond Sports Group holds DTC rights. 

Global challenges facing live sports broadcasting

Soccer is the dominant live sports broadcasting property in the European sports market and parts of Asia. However, the disparity between the popularity of the different European leagues and the varying team ownership structures has made the live sports rights market complex – and the corresponding viewing experience challenging for local sports fans. Take, for example, “revenue per game,” where a team in the English Premier League (EPL) earns around $10 million per game compared to just over $1.5m for a team in France’s Ligue 1.  

This disparity extends to the TV viewing experience and especially costs. A UK fan would need three separate subscriptions at around $1250 a year to watch every EPL game, compared to an Italian Serie A follower who could pay less than $400 – all from single right holder DAZN. This disjointed situation extends internationally, with US soccer fans able to stream EPL games for under $80! 

Emerging growth in live sports revenues

In emerging markets, including Asia and Africa, the growth of OTT-based sports broadcasting has been staggering. According to Media Partners Asia, a consultancy, Asian live sports revenues for TV and online video will rise from $6.7 billion in 2021 to $8.9 billion by 2026, but at a growth rate that is thankfully less than the growing cost of rights. Africa and South America share a similar growth trajectory, and all three regions – unlike the US and Europe – tend to have a single rights holder for popular sports like cricket, soccer, and rugby, which has helped fuel growth. However, these regions are also plagued by illegal live sports streaming, which undermines subscription and advertising revenues. 

Open Caching opens the door for streaming live sports DTC

The live sports content landscape is disjointed, with various sports leagues and events signing exclusive streaming deals with different platforms. However, this trend directly results from changing viewer behavior, with fans now expecting on-demand access to content and often preferring to watch games and highlights at their convenience. The likely outcome is that more live sports content will be distributed via the internet instead of traditional broadcast TV, closed cable, or satellite networks. 

Deals similar to Diamond Sports Group’s proposed partnership with Amazon Prime Video will become more prevalent, as will the likelihood of more DTC offerings – at a team level or through league-wide services in a similar vein to the much-lauded NBA League Pass for basketball and WWE Network for wrestling. 

The rise of live sports DTC will be good news for the adoption of Open Caching CDNs, where Qwilt is the commercial leader, as platforms look for local capacity and scale to enhance content delivery and improve the fan experience. Additionally, Open Caching CDNs, like Qwilt, will be useful in reducing network congestion caused by the high concurrency that live events generate. Serving live sports content from the network edge will alleviate the burden on peering points and core network infrastructure, thus lowering bandwidth utilization for high-peak live sports events. This solution also benefits sports fans by ensuring less buffering, lower latency, and increasing the likelihood of more 4K live streamed sports. 

In short, this news about the streaming partnership between Amazon and Diamond Sports is unsurprising, considering industry dynamics driving live sports broadcasters everywhere to rethink their distribution and monetization strategies. More importantly for Qwilt and our service provider partners, this development is another strong indicator of the shift from broadcast television to streaming. It is an unstoppable force, and another chapter that highlights the need for proximity, local capacity, and high-quality content delivery with global reach.