The grey pound holding up the sports media industry
Sport has become gripped by a fear of missing out on a future audience.
Everywhere one looks there is existential terror – how can live sport compete with addictive six-second loops?
The Fear™ is fuelled by the kind of research published in October by sports marketing agency Two Circles, which suggests fandom – be it of a team, sport, singer or band – is to a large extent determined by the age of 14.
The ‘made-by-14 principle’ is based on the agency’s analysis that found that almost 50 per cent of fans across markets and disciplines find their passion for a sport before the age of 14, with the most popular sport in each market getting its fans earlier.
For one federation director it was confirmation of the now commonplace idea that “if you want to bring young people to your sport, you need to reach them where they are – on TikTok, Instagram or wherever. If you don’t do that, you can lose them as a fan. Everybody is afraid to miss the boat.”
This school of thought is driving a flurry of sports clubs, leagues, governing bodies and major media companies to embrace the latest innovations in AI and gamification to capture the attention of Gen Zs and Gen Alphas.
Between 2012 and 2022, the consumption of content on social media platforms trebled to 340 billion minutes consumed per day, far outstripping the 252 billion minutes per day consumed on linear television. Social is the number one means of sports consumption for the 18-34 age group. It is also overwhelmingly where the 11-17 age group finds its content.
This presents two interrelated problems for sport.
First, while teenagers influence household spend, they generally have no disposable income themselves. Even the slightly older cohort that does have ready cash is used to accessing content on social platforms free of charge. This kind of content, aimed at this kind of audience, can help fatten sponsorship agreements. But sport has not so far found a way to make direct revenues from it as a media right.
Second, as sport pours so much of its time and energy into resolving that conundrum, there is a risk that it takes its eye off the ball and forgets who pays its bills: old people.
Growth sector
The power of the grey pound sometimes feels like sport’s dirty secret. But a generation rarely mentioned in discussions about sport’s future finances is set to become increasingly important.
Take this, from a 2020 report by the department of economic and social affairs of the United Nations: “People are living longer lives, and both the share and the number of older persons in the total population are growing rapidly. Globally, there were 727 million persons aged 65 years or over in 2020. Over the next three decades, the number of older persons worldwide is projected to more than double, reaching over 1.5 billion in 2050.
“All regions will see an increase in the size of the older population between 2020 and 2050. Globally, the share of the population aged 65 years or over is expected to increase from 9.3 per cent in 2020 to around 16.0 per cent in 2050.”
The images in this article have been generated using artificial intelligence (AI) technology. It may not depict real objects, people, or scenes, and its content is entirely computer-generated.
Pay-television companies do not share information about the average age of their subscriber base, but anyone who works in the sector will tell you that most subscription revenue comes from people over 50.
Survey-based research by the Pew Research Center broke down 2021 cable and satellite pay-television subscription in the US by age group. The largest single group, with 81 per cent saying they received a pay-television service at home, was the over-65s. It was also the most loyal group.
Older generations are still holding the value of TV broadcast rights, given they are consuming predominantly through this method.
–
Sean Miller, YouGov
Between 2015 and 2021, pay-TV take-up dropped, but only from 86 per cent. Over the same period, pay-television subscription among 18-29-year-olds fell from 65 per cent to 34 per cent of those surveyed.
And as Sean Miller, consumer lead at market research company YouGov, points out, it is not just in pay-television that older people drive media value.
“Older generations are still holding the value of TV broadcast rights, given they are consuming predominantly through this method, whereas younger generations are engaging more across a range of other media channels,” he explains.
“This is true across both free-to-air and pay-TV in the UK, with both BBC1 and Sky Sports skewing much older in the age of people who are watching them regularly. It certainly feels like there is a risk of forgetting about that generation in shifting focus towards other forms of engagement, beyond live TV.”
The 55+ bracket is more likely to watch live sports events in their entirety. YouGov research into engaged sports fans in the UK showed that 43 per cent do so, compared to only 30 per cent of 18-24-year-olds.
Older folk are also far less likely to dabble in piracy. Data from YouGov Sport, commissioned for the 2023 podcast The Pirates vs The Premier League, showed that 19 per cent of 18-24-year-olds had watched live sport on an illegal stream in the six months to October 2023. For over-55s, the number was only three per cent.
Chasing teenage eyeballs may well be a business-critical activity in an era of fragmentation and what Two Circles calls the ‘oversupply of distraction’. But what is being done to make sure the bedrock viewership of live sport keeps signing the cheques? Are the oldies but goldies taken for granted by sport?
Older, wealthier
The sport usually cited as the one which knows how to embrace its senior citizens is golf. Thierry Pascal, managing director of the PGA Tour and senior vice president of international media, says: “If you look at the various areas of our business, we’re making sure that it is a premium service for our fans. And that’s the fan that has the disposable income. They tend to be the older, wealthier generation. They come on-site and we deliver an all-day experience. They get value for money, but it’s not a cheap experience.”
In terms of media consumption too, the PGA Tour knows what its hardcore fanbase wants.
“Our broadcast product hasn’t changed a lot. What you see on TV is much the same as it has been for many years,” Pascal says. “It has more cameras, better graphics and better storytelling. But it’s largely the same product, made for a linear TV audience; one that can sit on their sofas in their living rooms in front of a large-screen TV. And the biggest and most expensive TVs are bought by the older generation.”
The PGA Tour does not sit around asking what it can do for the older generation, Pascal says. It just knows that generation enjoys the product. He is keen to stress that golf – both in terms of participation and viewership – has a much more even split across age groups than is widely thought to be the case. According to research by media conglomerate Endeavor, golf has the most even age split of any major sport in terms of participation.
And like all sports, golf has its eye on the future audience. The trick is to deliver for more digitally-oriented audiences without reinventing – or worse, abandoning – the linear product.
Pascal continued: “We have created more digital content for both the older and younger generations. In the UK, for example, Sky Sports is delivering to a linear audience the hours and hours of content that they want. But all the additional feeds we have now sit on Sky Glass or Sky Q – the premium products. We’re not losing the core audience; we’re offering something additional to audiences that are either more engaged in the digital space or have the financial means to take it up.”
Pascal argues that the over-50s are more tech-savvy than they are often given credit for. “In the early days of digital, the older generation was a little bit slow to embrace the change. But almost everyone now has products like Netflix and Amazon Prime. Older people know how to engage, how to subscribe and how to view content on all these different digital products.”
He accepts, however, that older viewers are not always as quick to migrate to new platforms as younger viewers. When selling rights globally, the timing of any move to streaming away from linear is critical. He admits that there have been markets where the PGA Tour “went too quickly and it just didn’t work, and we went back” to linear TV deals.
In December 2022, US media group Warner Bros. Discovery closed its golf streaming service GolfTV, which carried the PGA Tour events, just three years after launch. Some in the industry believe Discovery misread its audience demographics and went too quickly into a new technology. Pascal disagrees.
“It was not a failure,” he insists. “The numbers were pretty good. But it just didn’t make sense for them strategically to spend money on building a separate platform when they could just do it all on one [Discovery+]. They opted for aggregation over verticals. The content that was on GolfTV just lives in there. And golf is the still most consumed sport on Discovery+. It’s very successful for us.”
Customer lifetime value
One of the age-related concepts which increasingly informs the thinking of marketeers is customer lifetime value (CLV). Looking at the potential value of a customer over an entire lifetime inevitably puts a premium on getting the attention of younger fans and viewers.
As cold as it may sound, and despite people living longer, those in their 60s are, in media industry lingo, ‘time served’.
Jon Kilmartin, the director of media insights and strategy at Two Circles, says that aggregate CLV is becoming ‘the golden metric’ in the media and entertainment industry. This involves a paradigm shift away from rights negotiations driven by market value (local market dynamics) and will create more “efficient markets”, where the value of media rights “will come down to the measurable and demonstrable value they can actually provide to the buyer”.
Kilmartin says: “Sports have a unique ability to generate CLV, providing that the long-term commitment to doing so by rights-holders is prioritised and maintained. This is challenging with the governance models in place across sports and the lack of indicators, like a stock market, to validate decisions and investments that the market deems to support future profitability vs short-term gain. Our view is, therefore, that Fan Value (in the form of CLV growth and measurability) will become the key long-term determinant of growth in these far more efficient media rights markets.”
For some of those who have spent years making the calculations that rights acquisitions are based on, there are few signs the market is as rational and efficient as Two Circles expect it to become.
Mike Darcey, who ran the numbers behind Sky’s strategy for nearly 15 years, says: “There is a focus on the young, not so much because they have the money today, but because of worries that the older fans will not be replaced if the youth don’t get engaged.
“But folk have been saying this for about 15 years and in that time I can’t think of too many examples of a sports body doing anything other than selling rights for the largest sum available, because they have bills to pay.
“If anything, they are as short-termist as ever, happily taking money from the latest fly-by-night streamer, apparently uncaring of the risk they might soon be bust and not be able to pay the bills.”
