The Rise of Sports Piracy
Mark, a 20-year-old NBA fan, looks outside his Toronto apartment window and glances at Scotiabank Arena, where the Raptors will soon take on the Bucks in a pivotal Eastern Conference showdown.
As tip-off nears, Mark quickly opens his laptop and activates his ad-blocker.
His screen quickly portrays a high-definition display of the action, all in a modernized and convenient interface.
This simple process is a routine for Mark, among millions of others who regularly watch sporting events free of charge. Mark hasn’t paid for cable or sports streaming services like ESPN in years and won’t do so moving forward; it’s a slam-dunk decision.
Sports Are King
Pro sports are not only exhibitions of the most exciting athletes in the world but are composed of billion-dollar industries working together in conjunction to provide an alluring product. As such, it is no surprise that the sports entertainment industry has long been a staple of households across the world. For instance, the NFL accounted for 82 of the 100 most-watched U.S. TV broadcasts in 2022 and has led the pack for much of the past decade. In 2022, the global sports revenue industry totalled revenue of over 480 billion USD.
However, the sector is losing as much as 28.4 billion USD per year in revenue due to sports piracy and illegal streaming. This amount is projected to grow steadily in the near future as current headwinds continue to blow stronger.
Simply put, illegal sports streaming entertainment platforms have altered the landscape for consumers by providing a convenient, free or low-cost alternative. How will this recent development affect various stakeholders?
Team to Stream
In terms of platforms, sports leagues are increasingly turning to streaming to reach a broader, global audience. The migration from traditional cable TV to various streaming platforms has undoubtedly played a large role in the rise of sports piracy.
Traditional TV broadcast usage in the U.S. fell below 50% of all TV consumption for the first time in July of 2023, conveying the transcendent trends that have altered the landscape. American leagues, in particular, have made significant moves, with YouTube’s notable takeover of NFL’s Sunday Ticket from DirectTV worth 2 billion USD annually.
As a result, sports have become more and more expensive to feasibly consume for the average fan. In a 2023 survey of more than 2,500 sports fans from eight major global markets, 59 percent said they currently have trouble finding or affording sports content they want to watch. Illustratively, 56 percent would watch more sports content if it were available.
Additionally, one of the biggest challenges for consumers trying to watch sports without paying for cable is regional blackouts, which occur when a league sells the broadcasting rights of a game to a local cable company. Blackouts compromise the coverage of streaming services like NHL.tv, serving as a further incentive for fans to simply load illegal streams.
Because sports offerings are so fragmented, costs quickly add up. Streaming a wide variety of teams and leagues would prove troubling for wallets across the globe. Sports fans may be forced to pay up to 500 dollars per month to attain comprehensive sporting coverage, an amount that proves too steep for most.
The Rise of Illegal Streaming
The quality of these illicit platforms has grown steadily alongside technological advances. The days of buffering, virus threats, and blurry playback have yielded to today’s websites and apps of simple interfaces and crystal-clear streams.
Moreover, sites are now able to offer a wide variety of offerings, in direct contrast to the limitations that modern sports and media conglomerates attempt to impose. It’s easy for consumers to watch a headline UFC fight, then quickly switch to the Cricket World Cup, before flipping to a Premier League soccer match – all for free.
This functionality is made possible by the complex ecosystem involving countless internet nodes linking underground internet ‘criminals’ on a global scale. At the network's core are the original pirates, who utilize devices to steal satellite feeds or pilfer digital streams from official services. Next, these stolen streams are distributed by a plethora of other sites and apps, and this process, in particular, is becoming increasingly automated. As a result, these illegal streams are often embedded in legal sites, which claim not to be responsible for any copyright infringement of content sourced elsewhere. Sites which consumers directly access are often promoted on forums such as Reddit and aggregator platforms, including Sportsurge.org and NBABite.com, gaining widespread traction over time.
By extension, consumer demand for the convenience and cost savings that traditional forms of consumption fail to match has skyrocketed exponentially, especially among millennials. In Italy, live sports piracy has grown 26 percent year-over-year, while an additional 3.9 million people streamed sports illegally in the UK, with the true figure likely much higher. Most interestingly, pirating sports is becoming increasingly normalized among young people, with over 30% of respondents in a survey aged 18 to 24 admitting to regularly watching sports illegally, compared to only 4% of those over 35.
Consequences for Key Players
This recent trend brings significant consequences for various stakeholders outside of sports consumers. From the viewpoint of sports leagues, viewership has shifted from paid services to free alternatives. For instance, NBA commissioner Adam Silver noted that from 2010 to 2018, viewership on pay TV fell almost 50 percent among 18 to 34-year-olds. It is clear that TV ratings underrepresent the true interest and viewership within sports, a trend that leagues must take into consideration when making important decisions. Furthermore, since league profits trickle down to thousands of affiliated workers, many different stakeholders are also affected as well.
Media companies are also greatly impacted by this recent trend and must understand that the rise in illegal consumption stems from the lack of comprehensive yet affordable streaming options. Conglomerates such as Sky Sports, CBS, and Disney must carefully consider the potential expansion of product offerings as the streaming industry continues to evolve.
Overall, the advertising market must consider how the increasing prevalence of illegal sports consumption necessitates a reconsideration of advertising strategies. Advertisers must adapt to reach fragmented audiences effectively and reconsider their business model to be adaptable, or else they risk sinking with high seas approaching.
Ref, Call a Penalty!
While consumers enjoy the convenience and cost savings of illegal sports streaming, they face legal and ethical implications. Not only do ethical concerns rise among consumers, sports leagues and media conglomerates alike have been attempting to file legal action against these illicit service providers.
Rambler Group, a Russian internet provider, sued Twitch for over 2 billion GBP for breaching Rambler’s exclusive streaming rights for Premier League matches. Rambler withdrew litigation after Twitch agreed to “remove unlicensed copyright material.” Elsewhere, DISH Network and its subsidiary Sling won a hard-hitting copyright lawsuit against unlicensed IPTV streaming services, netting nearly half a billion in damages. And earlier this year, UK police raided an illegal sports streaming service and prosecuted the operator before visiting a thousand UK homes to discourage homeowners from watching sports illegally.
These are only a few examples of legal action of varying severity that have been taken to address the growing movement. However, platforms continue to rise in terms of quantity and quality as the market for free and low-cost offerings grows.
What’s Next?
As sports leagues continue to embrace streaming platforms, piracy becomes an increasingly appealing option for sports fans. The convenience and cost savings for consumers are undeniable, but long-term consequences for sports leagues and media corporations are complex. With an enticing value proposition, how can the growing group of sports pirates, just like Mark, justify consuming sports through entirely legal means?