With national TV ad sales on pace to fall 2% or more each year through 2022 (according to Magna research), and younger audiences flocking to online video streaming services like Netflix and Hulu, live sports may just be the final stronghold TV has as competitive advantage for advertisers. Sports betting is fortifying that position.
In May of 2018, the U.S. Supreme Court made a ruling that a federal gambling statute – the Professional and Amateur Sports Protection Act – violated the 10th Amendment of the U.S. Constitution. As a result, individual states now have the freedom to legalize sports gambling.
According to a Nielson Sports study commissioned by the American Gaming Association, sports bettors watch about twice as much sports coverage as non-bettors do. In fact, ESPN reported that during the 2018 NFL Super Bowl, Americans wagered over $4.76 billion, 97% illegally. Fast forward to today, and eight states have already passed legislation to make sports betting legal, opening the door for thousands of potential viewers to return back to TV.
More than one million consumers “cut the cord” last quarter and shifted to streaming platforms. Media research firm Magna predicts that number will climb to 48 million U.S. households in 2020. As TV viewership drops, so does TV ad spending. Mix that with the ability to be extremely targeted with digital advertising, and you could easily see how TV could take a backseat to online streaming for marketers. However, some specific audience segments like those aged 50-64 are still watching 39.6 hours of live TV each week, and local television news continues to be the number one source of news for more than half of all U.S. adults, according to a study by the Knight Foundation.
But sports fans of today are defying most statistics. Sports watchers are increasingly becoming more diverse, and advances in technology have introduced many new ways for consumption. Most sports fans are experiencing games cross-device (TV, app, social media, etc…) all at the same time. Sports betting will allow this trend to explode as more consumers crave individualized experiences for their entertainment.
One Statista survey found that almost 50 percent of people 18 years and older in the United States have placed a bet on a sports event at least once in their life. Separately, National Research Group said earlier this year that 79% of current and potential gamblers said they would watch more live TV sports, with 63% saying they would watch a greater variety of sports and 60% saying they would watch sports they didn’t watch before.
There is no doubt that the major sports leagues see the potential earnings in betting. The MLB, NHL, and NBA have already struck deals with gaming partners to bring new experiences to their fans. If TV can learn from the past and embrace this new opportunity with technology, advertisers could also see a new way to reach very specific audiences via live TV again.
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