Who controls the TV remote as sports viewership shifts to streaming?

With the 2022-2023 NFL season fully underway, this year will prove dynamic as streaming wars for live sports content continue and consumer access spreads across Amazon, Fox, NFL+, Peacock and ESPN. What does this mean for advertisers wanting to reach sports fans, and is linear disappearing from their budgets?

Let's dig into the data and find out.

Streaming grows across services and categories as linear declines

Our research into the 2021-2022 NFL season determined that all networks grew revenue, with only CBS seeing an 18% decline compared to the previous season – and this dip was primarily driven by the Super Bowl shifting to NBC. Additional games bolstered the regular season, while playoffs revenue soared 17% with a flat game count.

We can tie network revenue growth to advertisers across most categories expanding investment last season. The technology and financial services sectors led the advertiser categories with investment in the NFL but, notably, the online ticketing and entertainment sites subcategory – which contains the naturally-aligned sportsbook sector – saw seven-fold year-over-year (YoY) growth. Meanwhile, travel and apparel made a marked comeback, growing investment by 11.5 times and 3.5 times, respectively, as we emerged from the height of the pandemic.

One category that will need to rethink its advertising investment in streaming is alcohol, as Amazon and many other online marketplaces have no-booze policies. With beer brands having spent 70% of their total TV spending during the first two weeks of the NFL season, advertisers in other categories could find a better fit on the tech giant’s streaming service.

Meanwhile, linear TV seems to be slowly phasing out of sports advertisers' budgets. TV ad spend, when including the Olympics but excluding other sports, is up 4% YoY, but down 3% from pre-pandemic performance. The catalysts for this shift in sports viewing are two-pronged.

First, there is convergence on the measurement front. Take, for instance, the deal between Amazon and Nielsen to measure national audiences watching the NFL’s ‘Thursday Night Football’ just like traditional TV.

Secondly, more and more streaming services are picking up live sports of all kinds – not just football. Apple and Amazon are negotiating media rights held by MLB, Formula One racing, and college conferences. Apple now holds the rights to 1,000 Major League Soccer games. ESPN will show certain National Hockey League games on its ESPN+ service, and CBS is airing marquee soccer games on Paramount+.

Who wins in this new landscape?

While one could argue big tech gets a bigger piece of the pie with some of the aforementioned deals, everyone wins in the shift from linear to streaming sports – including consumers and both demand- and supply-sided players in the ad industry.

The trend is an advantage for professional sports in general, which – though it may now seem like a distant memory – went largely unplayed for much of 2020 and into 2021. There are now more options to reach consumers across more devices.

As more streaming services pick up live sports, advertisers now have an influx of ad supply, which means CPMs will go down. And with the technology, data and measurement capabilities to enable cross-screen advertising, linear TV publishers can also stay competitive by balancing both TV and digital video.

To take advantage of the emerging opportunities in streaming sports advertising, brands and media agencies need access to the right tools and insights to make more informed campaign decisions in a fast-moving and evolving marketplace. In this way, both digital and linear TV can play on the same team for advertisers looking to make their mark in this next era of TV.

Darrick Li is vice-president of business development and strategic partnerships, North America at Standard Media Index.