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The social heist – how do you treat the enemy inside the gates?

Ten years ago these platforms were the hottest thing in town – free marketing channels for rights-holders to communicate with existing audiences and reach new ones.

But in a short space of time, social has transformed from sport’s shiny new thing into a necessary evil. And with recent algorithm changes – and not-unrelated data and privacy concerns – their cover has been truly blown; they own the audience, and will increasingly charge rights-holders to reach them. As an industry we’ve welcomed a Trojan horse in through the gates, and now the troops are pouring out.

The question is – have rights-holders found out too late?

The history of the sports industry in the 21st century has, until now, been one of almost exponential growth in the pay-TV market: following decades of growth, media rights-fees in the United States continued to grow by 12% year-on-year from 2012-2016, whereas the rest of the industry grew by 4% per year. Sports rights-holders resultantly benefited.

However, for the first time in a decade, there are signs that the pay-TV bubble, though not quite bursting, is starting to deflate. Premium rights are still driving commercial growth in certain territories such as the United States and South-East Asia, but elsewhere broadcasters are under pressure to make the numbers add up as subscription revenues and carriage deals are threatened by cord-cutting and declining ratings, cutting their outlay on premium sports rights as a result.

The sports industry is in a state of reckoning. Half a century ago the burgeoning TV industry gave rights-holders a way to distribute their content to more eyeballs than ever thought possible, helping to grow a hugely valuable TV advertising sector and pay-TV models that made premium sports broadcast rights worth billions of dollars a year.

Fifty years on social media is offering a similar proposition – but it’s clear as an industry we’ve given away too much to social media for free. And, critically, these same platforms are tooling up in their efforts to become sports broadcasters: see Facebook’s recent spate of senior executive hires with sports broadcasting pedigree as most recent evidence.

While there is potential for these companies to start paying the billions at some point in the future, it’s not going to be tomorrow. It’s difficult to see a situation where social platforms become like-for-like replacements for traditional broadcasters – they’re making money based off of a business model where their clients provide them valuable content for free, so why change that – but the major worry for rights-holders is that they have a truer reflection of their rights’ inherent worth.

The thing about digital is that it doesn’t have a hiding place; social media platforms have much better access to data than broadcasters as they can track and measure latent interest, as well as consumption, in a much more scientific manner – and can calculate, therefore, how much rights are worth.

As an industry we’ve been too slow to react to the new social era. Though social platforms offer many benefits for a sensible rights-holder managing a portfolio of routes to its audiences, many rights-holders have fairly sophisticated digital marketing teams for whom social growth is a main KPI. We congratulate ourselves with growth in follower numbers or total engagements, but not in asking why we spray valuable content far and wide.

So aside from getting a crystal ball, how can rights-holders protect themselves from the Trojan horse? It’s an active conversation we’re having with all of our clients in one way or another. There’s no one-size-fits-all, but plenty of considerations to help any rights-holder form a successful, long-term overall media strategy:

1) Have a commercial-first digital strategy: Assess the value of everything you’re doing digitally, and why you’re pursuing a certain social media strategy

2) Future-proof your rights model: If you sell broadcast rights, consider your moves to protect and grow value in future deals given the uncertainty of the current landscape

3) Don’t put your eggs in one basket: Have a ‘test and learn’ strategy so you don’t become dependent on one platform; one algorithm change can turn a high-performing content series into a flop

4) Grow your own: Ensure you’re measuring, capturing and building your own audience to act as a hedge against further disruption

5) Strike a better deal: If you do give valuable content away on social, make sure you’re getting something back – ideally data on those who consume it.

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