How can tennis grow and market itself better?
One last post from Matt and The Racquet: Show me the growth, death of cable bundles, direct to consumer complexity, gatekeepers
*taps mic** Is this thing on???
As part of a series of interviews a tennis writer called Owen Lewis (follow him on Twitter/X here for the full article coming out soon) recently asked me a few questions, including ‘how can tennis grow and market itself better’.
I stopped writing The Racquet a year ago and so I never had the chance to finish the third ‘Future of Tennis’ essay. But here is an impulsive version of that piece that spilled out of my brain in response to Owen. It will most likely be the last thing I write about in this sport so it feels silly not to send it out to Racquet readers, or at least those of you that still remember this publication exists.
Owen: How can tennis grow and market itself better?
Matt: Most sports have been artificially prevented from being changed by technology and the internet to the degree they should have by now. This has happened because sports have strong gatekeepers in the form of the organisations running them and entrenched business models with incentives to retain traditional revenue streams such as cable TV bundles. We have been running a multi-decade experiment where sports neglect new fan acquisition in favour of extracting as much value from existing fans as possible while TV slowly dies. But it’s been extracted close to death, both literally as the finite resource of older customers die, and figuratively as demand declines because tennis fails to swap old fans with new fans at the replacement rate. Many sports find themselves in this funny old fashioned place because they are/were the last valuable bits of (incredibly lucrative) TV bundles and have been clung onto, as the prime negotiating piece, right to the bitter end. In the slowest of slow motion wrecks, we are finally about to crash, as Disney/ESPN's Bob Iger admits as he prepares for the transition to direct-to-consumer (DTC) platforms. But as brands that have already made a partial or total switch to DTC have found out, direct to consumer is also not a cure-all by itself. Millennials, Gen-Z, and increasingly Gen Alpha will flock to where the content is discoverable, available, react-able, and interactive. Not to where it’s locked away with no discovery mechanism.
This is specific to each sport, each with its own differences of delivery and platform strategy, but tennis has (and has had for some time) an enormous opportunity to focus on growth and fan acquisition for a change and leave the last two luddite decades behind. Tennis is less reliant on broadcasting revenue as a % of its total revenue and also has a more decentralised rights environment than some other major sports (this makes experimentation easier). It also doesn't (yet) have powerful player unions and collective bargaining agreements (a la the NBA) who can contribute to pressure for massive increases in rights values regardless of the realities of the market. Tennis will have to capitalise on these opportunities in order to grow meaningfully over the next 20 years amongst escalating cultural atomisation, red hot competition for attention spans, and an increasingly coffin based cohort of older fans who had been propping up the older business models. It will either take brave long term thinking from ATP/WTA/Slam leadership, or reactive decisions will ultimately be forced on that leadership as the sports rights market continues to change (ESPN's US Open and Wimbledon deals alone are a not insignificant chunk of tennis' total revenue). The thinking has to be long term because as the slow motion demise of traditional tv rights unfolds, the desire to restrictively squeeze money out of those rights only increases. This tug-of-war between short term vs long term strategy has been going in the wrong direction for years in multiple sports. This is why you can't so much as whisper about Roland Garros (The French Open) on any social media platform before being swiftly banished to some French penal colony for copyright violators. Or why The Rugby World Cup has felt almost completely invisible this year.
There are many ways to do this. In my ideal world (and the general direction where I think most sports will end up whether they like it or not) a new platform is created to aggregate sports rights with equity buy-in from each partnering sport, with a basic free advertising layer to ensure anyone can access anything they like when they're new to the sport (new fan discovery). The more sports you attract to this platform the higher the average revenue per user (ARPU) you end up scaling to, thanks to a combination of both advertising marketplace volume and new user acquisition. You then have premium tiers for greater access. For example, in tennis, the benefit of having no commercial breaks at change-of-ends with the coaching conversations and player meltdowns becoming an actual, differentiated part of the show with live translations/subtitles and analysis. Exclusive access to more post match interviews, coach corner, customisation of camera angles during the match, red-zone style coverage, special ticketed digital events and exhibition matches etc, etc etc. The possibilities are endless and what we've been served until now is a drop in the ocean of what's possible from a UX/UI perspective in 2023. In an even more ideal world this hypothetical platform would be opened up so anyone can commentate, react and create media around tennis, within the walled garden of the ATP/WTA/Slam broadcast rights. Former pros like Roddick, Federer, Serena, or Murray when he's retired, hopping into commentate on a big match whenever they like. Naomi Osaka streaming a training session. Wonkish tennis nerds discussing strategy, statistics or the latest controversy et al. A huge problem many sports have right now is a compelling content shortage. Tennis for example is almost completely dead media-wise outside of matchplay. This supplementary media is expensive to produce professionally and no one seems to agree on formats that work for it. Far better to let the internet do its thing and allow the 0.01% of fans and former players who can create compelling, non-traditional media around the sport pick up the slack and cater to a more varied set of existing and potential fans. The official stuff is fine, a fraction of it great, but it's not sufficient by itself. This democratisation of creativity and the distribution of that creativity has exploded in nearly every other media industry apart from sport. We are forced to live in the past.
Direct to consumer streaming services are also not an easy saviour, despite some bullish commentary around teams/sports going direct to their fans in the wake of RSN’s (regional sports networks) going bankrupt this year as cable flails around on its deathbed. Some teenager who is almost brand new to tennis doesn't want or know to commit to a $120 a year subscription to the Tennis Channel (which despite the price-tag has far from total coverage), nor do they give a shit about a professional looking studio of floating talkshow heads yapping with that irritating intonation of an American or British weather report from the 90's. They want real, varied shit, that often requires smaller compounding exposure to the sport, and have grown up with Twitch, YouTube and TikTok, not traditional TV consumption habits. Let people create around tennis and the discovery will flow. Clips of people's opinions on big topics will flow. Clips of reactions to crazy points will flow. Whole new types and scales of sports media will flow. Let the market decide and inject some goddamn optimisation and meritocracy into one of the stuffiest species of media personality in existence -- the sports commentator/analyst/host. God forbid we select based on who can build a fucking audience rather than who reached the 3rd round of Queens in 1986.
There are clues everywhere to this alternate reality of what happens when you stop preventing sports from reaching anywhere near their full potential with the internet. The Kings football League attracting millions of viewers on Twitch, Twitch streamers casting and partnering with Thursday Night Football or UFC, The Manningcast's more informal but still highly knowledgeable and shareable show, ESPN acquiring the expletive filled Pat McAfee YouTube show. Again, this isn't new to how any other area of media works. Just sport, in this case tennis, and its gatekept bizarro world where everything is creepily frozen in time since the late 90's/early 2000's. Tennis should embrace an environment of creative abundance, wrapped around the scarcity of its incredible and compelling professional product. TennisTV was forward thinking in 2009 but it's not close to enough. You cannot just port the user experience that worked on cable/traditional TV to a direct to consumer platform and simply hope for the best. Discovery, Turner, Paramount, and other DTC streaming platforms from traditional entertainment brands are finding this out the hard way with user churn. You have to leverage what makes the internet so transformative -- network effects, user generated content, discovery via abundance. Sports threw away the pre-2010's channel surfing discovery mechanism and replaced it with nothing. Expecting new fans to intentionally find and fall for a sport without the serendipity generator that the internet gives away for free is dumb.
What I think is more likely to end up happening instead is that sports orgs and cable companies will steadily find out why Google, Apple, Amazon (and maybe Netflix) are as dominant as they are. YouTube and PrimeVideo have only had access to small sniffs of sports rights and already produce better viewing experiences and recently better year on year viewership (NFL's TNF and MLS on AppleTV+) than traditional media companies1. YouTubeTV with its Multiview feature, Prime Video with its augmented reality live data graphics and lower latency/delay streams thanks to proprietary software, Apple with its upcoming VisionPro sport specific cameras and production. This stuff is just the beginning. Not to mention that Google/Amazon are also better set up to open up sports as platforms for anyone to commentate/react to, along with mature ad products and creator revenue share programs in place if they go in this direction. These tech companies win because they serve the user/fan better than anyone else can, they understand growth, and discovery is easier because hundreds of millions of people already have Prime subscriptions or the billions that use YouTube everyday. These tech giants may end up with ultimate leverage (and may well recreate a new version of the bundle) if fans are allowed to find out how much better things should have been for years. And these tech giants will negotiate hard on pricing and revenue sharing with the former gatekeepers as soon as they have even a taste of being omnipotent aggregators for sports content. This is my less preferred option (I would much prefer a sports focused platform was built from the ground up, starting small and adding sports and learning step by step, with startup level freedom to think about what it should be like to watch sport in 2023). There are real drawbacks to big tech owning another huge chunk of the world, especially for sports organisations. But the top of the funnel, the new users/fans which have been so neglected for so long, will at least be better off either way.
Generally there has been this terrible but understandable complacency in tennis. The sports streaming/rights landscape is experiencing enormous change, and there is nowhere near enough work on how to position us to really thrive in that, admittedly, uncertain future. Shifts in how this sport earns money and presents its product are imperative. This is not an easy problem to work on considering the number of bottlenecks but the total lack of experimentation in areas where other sports have at least tried to surf the changing user/fan behaviour (some with early signs of succeeding) is an indictment of tennis' incapacity for action.
Various sports are failing here because of legacy incentives. Soon enough though they won't have a choice. These old games will endure no matter what they do, at least for the foreseeable future. They'll do so because they have massive fan bases, engrained cultural influence, and often still strong in-person event performances. Coasting on their hard earned histories of making people care about their product in the first place long ago. But the time has long passed to consider how much bigger and better they could and should be when their digital growth has been tethered for the benefit of dying business and consumption models for this long. If sports don't show that they understand this, big tech will happily demonstrate how powerful gatekeepers can really be.
— MW
Note: I wrote about 80% of this answer as far back as 2018. The platform product is the only solution that I can come up with that sufficiently reduces new fan acquisition friction, gives tennis a bigger & more varied footprint, and can also capture and retain more of the demand curve and value long term for organisations and players. In comparison to the insanely lucrative traditional TV bundle model, behemoth tech companies will probably be a brutal partner for sports organisations in terms of the balance of power (especially because Tech can afford to wait until the rights values of these sports start to plateau without cable TV bundles to prop them up). I expect to see Big Tech continue to slowly acquire bits of sports rights when it makes financial sense to them, rather than a total and quick sweep. The other possibility is that traditional cable/media companies pool their rights to re-bundle in a one-stop sports destination, which would mitigate some of the fragmentation issues of the transition away from cable to DTC. However without the subsidising help of the overall cable bundle, this would feature a tough business model transition with higher fees passed onto consumers, or a necessity to light money on fire to acquire users in the first place.
I’ve gone back and forth on whether I want to work on the above problem. Tennis’ fragmentation, technical hurdles with streaming live video at scale compared to Amazon/Google’s mature infrastructure, and the requirement to ink partnerships with rights-holders from the get go, makes it a very tough startup to build. It’s not exactly something one could just tinker away at with a tiny team from a garage. But I do think that it’s possible to slowly change the market of rights bit by bit by simply offering a more compelling product for fans. Perhaps starting with some small portion of under-utilised ATP rights and building from there. A couple of other startups have tried to do something along these lines, but execution wise I don’t think anyone has got this right yet.
It feels a bit funny to be even thinking about sports media in a startup context while the rest of the tech world obsesses over bleeding edge AI breakthroughs. Most of what is discussed above was normal in many media industries in the mid 2010’s. Sports have just been operating in the past for so long that somehow these shifts are still current.
As always thanks for reading and for supporting this grand old sport, no matter how stuck in the mud it might be.
Enjoy Shanghai and see you next we… Oh wait
See you around.
Matt
Amazon’s Prime Video actually just ended their broadcast agreement for tennis in the UK. But unforgivably, while other sports on Prime experimented with twitch casting and plenty of other discovery mechanisms, tennis essentially just let the product die in a dark corner. Access for those who knew about tennis being on Prime was great, but it was terrible for those who didn’t. And of course Sky has now replaced the Prime Video deal in the UK and locked away the sport behind a more expensive subscription, further complicating how new fans discover and watch tennis.
Always a pleasure to read what you have to say.
How I've missed this notification! Great read and I wish you would come back to writing regularly