Eleven Sports

Eleven Sports in the UK Reported to be in Trouble

I wrote something on Twitter about this, but thought I’d elaborate a little here too.

There was something of a shake-up in rights prior to the start of this football season when newcomer Eleven Sports entered the UK market and snapped up rights from Sky (La Liga) and BT Sport (Serie A and UFC) amongst others. 

Eleven Sports had hired Marc Watson, former CEO of their TV operation, and were expanding into the UK. The company, founded by Leeds United owner Andrea Radrizzani already operated in a number of other markets around the world, but was now entering the competitive UK market with its OTT service. That said, it was clear from the outset that Eleven Sports really wanted to agree so-called “wholesale” deals with existing TV operators like Sky and BT. The idea with these is that when, say, Sky sells a viewer a sports package, Eleven Sports would be bundled in alongside Sky Sports, Eurosport and others, and get a guaranteed revenue per month. This would be lower than the £5.99 Eleven Sports was selling itself to consumers directly, but the slightly lower fee would be made up for in volume. 

However a report in the Telegraph, and picked up in The Guardian, suggests that these negotiations have not gone well.

Talks have collapsed with Virgin Media, and both Sky and BT have been playing a game of wait and see. They could afford to do that because, while Eleven Sports had picked up some very good rights including the next two biggest leagues in Europe (from a UK perspective) after the Premier League, these aren’t necessarily essential for a British viewer. And I suspect that neither Sky nor BT saw too many cancellations when they lost those rights.

While Eleven Sports has been in the background trying to do wholesale rights deals with the big TV operators, in the foreground they don’t appear to have been doing a great deal to sign up consumers directly – something that Netflix, for example, spends a lot of money doing. I noted at the beginning of the season that they didn’t even seem to have a TV ad. And since then, I’ve seen little to no direct to consumer marketing (It’s possible that it’s just not been targeted at me, but I’m squarely in the bracket of their potential subscribers).

The cynic in me would think that they’ve been betting the house on getting those wholesale deals through. And the TV operators just don’t need to do them. Sure, they miss out on showing El Classico, but that’s more than made up for my Manchester, Merseyside and North London derbies.

The Telegraph reports that Eleven Sports may have as few as 50,000 subscribers bringing in £300,000 a month. That’s nowhere near enough given their rights costs. But I’m amazed that they even have as many viewers as that. You imagine that these are mostly die-hard Spanish and Italian football fans, alongside those from other smaller leagues they have the rights to (Volume is not the issue with the service). I suspect that their upcoming UFC rights which are due to kick in this January, would have added a few more subscribers. But it’s not clear that these would be enough. In any event, the UFC is said to be talking to BT about a last minute extension of their existing deal in the event that Eleven Sports does close down.

The one deal that Eleven Sports did manage to do was with STV, the Scottish ITV franchise holder. Last month they announced a strategic partnership, that would see the broadcaster sell advertising and sponsorship around Eleven Sport’s programming. In a related deal, the STV Player would also get access to two games from La Liga and Serie A each weekend.

(Sidenote: The STV Player, of course, is targeted at viewers in Scotland, and there seems to be some kind of agreement between ITV and STV to politely point viewers towards the correct player depending on which region they live in. You have to supply a postcode during sign-up, and there are content restrictions on non-Scottish domiciled viewers as a result. It’s unclear if this includes the Eleven Sports games.)

But all of this feels too little, too late. The UK sports market is highly competitive, and the existing players have very deep pockets. It’s instructive that a different OTT service that operates in a similar manner DAZN Sports, has chosen not to launch in the UK for that very reason.

It’s notable that Netflix has chosen to steer clear of sports. Only last month, their CEO Reed Hastings said:

“Sports, like live sports, for on-demand adds almost no value to it. People want to watch sports now. They want to know who won. They don’t want anybody to tell them who won.”

Although he didn’t totally rule it out in the future.

But it doesn’t take much to do the sums. The most recent NFL deal in the US, was a $650m a season deal Fox paid for Thursday night football. They get 11 games for that. But that roughly means that per hour, they’re paying more than double what Netflix pays for an hour of The Crown or HBO pays for an hour of Game of Thrones. And that’s for a single market for a property with essentially zero repeat value.

Not that this has stopped Amazon experimenting. Next season it becomes home to ATP tennis in the UK, and it has bought a limited package of Premier League matches beginning with the 2019/20 season. Although the latter were certainly sold very cheaply as I’ve noted here before.

Amazon does have different strategic goals to Netflix, and it’s possible that Amazon identified a segment that they underperformed in, which tennis might help them reach.

I can only think their football investment is purely a marketing initiative that will see them give games away to viewers who use their hardware and/or their apps. There are too few fixtures for them to try to sell subscriptions, but you can get people to use an app/device that they otherwise might not use.

Back to Eleven Sports. You feel that despite the people involved, they entered the market naively, and didn’t have the killer sports package that they really needed. They didn’t get any Premier League football or even any UEFA packages, and that put them on the back foot from the start.

They may manage to turn it around. Reports suggest they improved their app, adding functionality like Chromecast to it. But the low subscriber numbers just kill them.

Sporting Value

The new Premier League season is well under way, and it’s at this time of year that the big sports TV players tend to gather up their marketing spends and splash the cash around, trying to persuade those of us who don’t subscribe that we really should be.

BT Sport has an entertaining video of a small girl taking on heroes, promoting BT Sport’s coverage of the Premier League, Champions’ League, Europa, Moto GP and Rugby Union amongst others. Everyone wants to see Gareth Bale “act” after all.

Meanwhile Sky’s ad features an army of literal “armchair fans” as they settle down for the new season of football. It includes their presenting talent in the ad, including Jeff Stelling who was seemingly contractually obliged to appear in every advert on television during the World Cup.

But there’s a new player on the block. No, I’m not talking about Premier Sports who scooped up the rights to the pre-season ‘tournament’ that literally nobody cares about, the International Champions Cup (Seriously, do you even know who won?).

No, I’m talking about Eleven Sports which has just launched in the UK.

Incidentally, I did look to see if they’d made a TV ad. But if they have, I couldn’t find it, and their YouTube page has a grand total of 13 videos, the newest of which is over a month old, and all of which seem to be about the World Cup.

Eleven Sports is a London based company that was started by the Italian businessman Andrea Radrizzani. Hitherto they’ve mostly been active in other territories like Belgium and Poland. But under the management of former BT exec Marc Watson, they’ve been running around snapping up sports rights from under the noses of Sky and BT.

Sky has lost La Liga rights after many years, while BT has lost Serie A games which it has had pretty much since it launched its sports channel. They also grabbed the rights, at least this year, to the PGA Championship which had been floating around for the last year or so after Sky lost them.

These losses come at a time when Sky is about to lose its ATP tennis to Amazon, who have just begun showing this year’s US Open. And the FT reports that BT is going to be losing its NBA and UFC contracts shortly.

The only really good news for the incumbents, BT and Sky, is that as they enter the final year of their current Premier League agreement, their next three year contract starting with the 2019/20 season will be flat in terms of costs. 

But consumers probably need to ask whether they’re getting good value. BT has just put up its fees for BT Sport, while Sky’s went up in April.

Over at Eleven Sports, they’ve done a deal with Facebook to stream some of their output there (Incidentally, when I searched on Facebook for ‘Eleven Sports’ it was the second link I had to click. The first was a Burmese newspaper).

Eleven Sports’ pricing model is either £5.99 a month or £49.99 for the year, and you can get a 7-day trial. But it does all feel a bit rushed. While there is an app, the Android one doesn’t yet have Chromecast (although it’s said to be coming). That’s led to some scathing early reviews. So good luck watching golf balls on a 5″ screen. Watching on mobile is an essential bonus, but that 46″ block of glass in the corner of the living room is much better in overall terms for watching sport on.

In other territories, Eleven Sports has sub-licenced games to other sports providers. Maybe that will happen here, but I can’t see that it’s in either Sky or BT’s interests to give a leg up to a new competitor. So we’ll have to wait and see. Another FT piece says  that neither has bitten yet.

I confess that I’m slightly dubious about how many people will subscribe for La Liga or Serie A. Yes, those leagues have Messi and, now, Ronaldo, but for me they were a nice-to-have bonus. Ex-pat Spaniards and Italians will perhaps seek them out (or use vicarious VPN systems to log into local language feeds). And of course both leagues do have their hardcore fanbases. But is it all sustainable in the longer term?

There must be questions about whether they have overpaid for rights. They claim not to have, and it’s true that Premier League rights increases have left both Sky and BT with less money for other sports. BT is said to be likely to lose both NBA and UFC coverage fairly soon.

On Radio 4’s Media Show last week, Marc Watson talked about how much football Eleven Sports had put out – more than any of the other sports channels. But what is the quality like, and is there an audience for all of it? 

More worryingly a streaming-only option can be a challenging option is significant parts of the UK. I might be able to happily stream 4K* but I know I’m in the relative minority. Streaming is much easier to do when it’s not live. Netflix and the iPlayer team are able to encode very carefully to ensure that the right amount of bandwidth is used on an almost scene-by-scene basis. Fast action requires more data; a slow conversation requires much less. When you move to a live environment, particularly when there is lots of action (so sport by definition), you have the twin problems of needing high bandwidth to capture the action, and the need to encode on the fly in a sub-optimal manner because you’re broadcasting live. Netflix has a whole programme to work with local ISPs around the globe to minimise network traffic, and ensure the best experience for the end user with as little lag as possible. The BBC Research and Development also published a really detailed summary of their 4K trials with Wimbledon and the World Cup over the summer that gets into some of the challenges with live versus pre-recorded. While HD might be easier to do live, the same issues exist.

From an overall consumer’s perspective then, to watch the same sport this season as last season, both BT and Sky have increased their prices well ahead of inflation. Meanwhile they have less sport each, and to get back to the status quo of last season, the consumer needs to spend another £5.99 a month on top of those increases for some sport that they can no longer [easily] watch on their television.

In any event, I’m surprised by how little I’ve heard from Eleven Sports on a consumer basis. While soft-launches are sensible when you’re launching a new streaming platform, the football season is underway now, and they’ve not really started a major consumer marketing proposition that I’ve noticed. Compare and contrast with Amazon’s current marketing blitz for their US Open coverage.

Time will tell.


* I don’t actually, for the good reason that I don’t have a 4K TV.