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Unfriendly Competition: Illegal Streaming and the Sports Industry
Online streaming has changed the way that consumers, especially sports fans, view content. Given the ease of access and on-demand features offered by today’s video streaming platforms, fans of all sports have shown an appetite for the convenience of streamed sports events. In fact, as of 2018, 30% of sports fans streamed sporting events on their smartphones or tablets. That number is even higher among younger generations, with 65% of millennials and younger consuming sports content on a mobile device.
This new era of accessible sports content, largely driven by technological advancements enabling streaming services, has expanded the sports experience well beyond stadiums, ballparks, gyms, and fields. Take the 2019 FIFA Women’s World Cup, for example. While these games are played in cities throughout France, streaming services allow fans around the world to experience the action, on demand, from anywhere. In addition to ease of access, streaming has also promoted growing fandom among previously under-served audiences, including fans without traditional cable packages. An added bonus, sports that might not have filled stadiums are reaching new global audiences because of the increased accessibility enabled by streaming.
But as sports streaming grows in popularity, so does the opportunity for bad actors to take advantage of this demand. In our study, Leveraging Intellectual Property in the Global Sports Economy, GIPC explored the impact of digital piracy on the sports industry and its surrounding economy. The study uncovers a disturbing, upward trend of illegal sports piracy. Our estimates suggest that visits to sports piracy sites increased by 20% from 2015 to 2016, with an estimated 6.5% of North American households and 25% of UK households subscribed to piracy services, resulting in billions of dollars of lost subscription revenues annually.
As found by our most recent study, Impacts of Digital Video Piracy on the U.S. Economy, the economic effects of illegal streaming are widespread. With $229 billion in domestic revenues and 2.6 million jobs supported by the U.S. entertainment industry, many of which are related to sports, there is a real need to squash illegitimate streaming services and promote legitimate ones for the massive audiences they provide the sports industry.
Sports leagues’ have echoed this plea. Illegal streaming of sporting events and infringement of official content or merchandise causes substantial economic losses that reverberate across the entire sports sector. Sports industry leadership, including the National Basketball Association (NBA) and the Ultimate Fighting Championship (UFC), have recognized this problem and urged members of the U.S. Congress to implement enforcement tactics that curb illegal sports streaming.
The UFC, in particular, has demonstrated considerable commitment to fighting illegal streaming, perhaps most notably as it affected the fight between Connor McGregor and Khabib Nurmagomedov. Matches hosted by UFC heavily rely on a pay-per-view model, leaving them especially vulnerable to the harmful economic effects of illegal streaming. Years prior during a U.S. congressional hearing in 2009, then-CEO of UFC Lorenzo Fertitta testified that his organization was “potentially losing tens of millions of dollars a year from piracy.” Given the growth of online streaming services—and subsequent proliferation of the illegal economy—that has occurred over the last ten years, Fertitta’s estimate is undoubtedly exponentially larger today.
The sheer lack of effort it takes to uncover the world of illegal streaming online is, no doubt, a contributing factor to the growing problem of digital piracy. A quick search of “NHL streams” yields dozens of results—the overwhelming majority of which are advertised as “free” and are in no way affiliated with the National Hockey League. Beyond proving the expansive presence of digital piracy, this experiment reveals the need for more robust enforcement when it comes to illegal streaming of sports content.
It might be easy to pass over the broader economic impact that illegal sports streaming activity has on the U.S. economy; while subscription revenues are threatened by digital piracy, we must also acknowledge piracy’s compounded impact. The diversion of these revenues translate into a direct hit on hardworking American men, women, and families. Less jobs means less quality entertainment and less content production all together. Enforcement is essential to curbing the illegal sports streaming economy.