Chatting Sports Tech

Edition #1.5 – Super Bowl Post-Mortem

Since Edition 1 of Chatting Sports Tech went deep on the Super Bowl’s importance to the media industry, I wanted to craft a quick post-mortem after viewership numbers were released. Hence, Edition 1.5. Most of the insights are from people who follow media numbers way more closely than I do, but I’ll add my spin and link back to concepts touched on in Edition 1.

Edition 2: The Power of Community in Sports will still be posted toward the back-end of this week, following the regular bi-weekly schedule. 

Let’s dive in.

First off some facts

  1. The Super Bowl drew an average of 96.4 million viewers. That represents a 15% decrease from the previous year (Sports Business) and made it the least watched Super Bowl since 2007.
  2. The TV specific average was 91.6 million viewers while the digital stream averaged 5.7 million viewers (SB Viewership).
  3. The number of digital streamers represented a 65% increase while the number of at-home specific TV viewers decreased by nearly 9% from 2020 
  4. The median age of viewers was 50.6 years, up from 49.1 a year ago and 46.1 three years ago (Sportico).

This Super Bowl was marketed as GOAT versus the heir to the throne and should have been a ratings bonanza. But that clearly was not the case. What’s the immediate takeaway?

The honest answer – everything is relative and a little more context is necessary before jumping to conclusions. In other words, simply comparing viewership versus the prior year is a fool’s errand.

One of my favorite twitter follows and great storyteller, Joe Pompliano, wrote a good piece here. Some of the most relevant points:

  1. The finals of every single other major sports event was down significantly during the pandemic. Compared to the year over year performance of the Stanley Cup (-61%) and NBA Finals (-49%), the Super Bowl’s decrease doesn’t look as bad. Granted it’s not a great comparison given calendar timing and a more crowded Fall sports schedule, but the point remains that decreases have plagued all major sports.
  2. The Super Bowl still significantly outperformed every single other television program of the year. By a lot. Not surprising at all. When that’s no longer the case, media executives and Roger Goddell can officially start panicking.
  3. Given NFL regular season ratings were down 13% on the year, the Super Bowl viewership numbers are fairly in line.
  4. There are way too many factors to attribute a single cause for the decrease.

I’ll add three other things playing a part in depressed ratings / decreased viewership over the course of the night:

  1. Pandemic impact – I’m assuming the pandemic prevented the typical Super Bowl watch parties (“assuming” because everyone seems to have their own guidelines in place for what constitutes ‘safe’ behavior). Under that assumption, the people who care less about the football game but watch due to social pressure and the forced next day water cooler talk may have skipped watching the game altogether. Expect this to rebound next year, according to Fox Sports Head of Strategy.
  2. The blowout didn’t helpSportico’s article provides the number of viewers at different points during the game and predictably, the number of viewers dropped precipitously once Tampa ran away with the game. Compare that to Eagles-Patriots in 2018, where there were actually more viewers watching the game’s end versus the halftime show.
  3. The Refs Ruined The Game! – I’m stretching here, but based on my twitter feed, you would have guessed the referees all padded their 401Ks by wagering heavily on Tom Brady and his quest to conquer natural aging based on the lopsided penalty calls for Tampa. But I wouldn’t be surprised if a small portion of viewers just gave up on the game out of frustration.

Will these Super Bowl viewership figures influence future NFL media rights?

No. Almost certainly not. This Super Bowl represents only a single data point. Meanwhile, as Edition 1 mentioned, the NFL retains the most dominant position in the television world. The league’s relative strength versus other programming has actually increased with cord-cutting. In other words, the NFL remains appointment viewing when non-sport and news programming continually shift to on-demand, OTT platforms. 

Based on figures floated in the media, the next round of media rights should represent a significant increase on the current deals. The NFL is pushing to get a deal done before March. Why the rush? Given 2020-2021 losses due to a lack of ticket sales and that the salary cap is tied to league wide revenue, locking in new guaranteed media payments could allow the NFL to get creative and smooth the salary cap going forward instead of taking a massive hit for the upcoming year. 

What are the long-term takeaways?

The most obvious long-term takeaway is that cord-cutting isn’t going away and may even accelerate. Per the Sportico article, 17.8 million fewer people were watching TV on Sunday night compared to one year ago according to Nielsen. With every media company throwing its weight and attention behind its streaming platform, the writing is on the wall for Pay TV. An eMarketer survey conducted as of July projected 27.1% of households would have cut the cord by 2023. I’d guess that projected 2023 number would realistically be closer to 35% given pandemic effects and increased number of streaming options. Meanwhile, though plenty of people in the media championed the 65% increase in Super Bowl streaming, the absolute number of streamers is still a small fraction of overall viewers. I’ll dive more into cord-cutting in a future edition so let’s move on.

The aging population of viewers represents an alarming trend for the NFL though. Part of that aging is being captured in cord-cutting statistics as the typical cord-cutter skews younger but don’t expect the NFL to see this statistic and sit idly. Capturing the 18-49 year old demographic is crucial for the longevity of the major sports. I’ll also address targeting the youth population in a future edition since it’s a major priority of all the leagues.

A less obvious takeaway is that gambling has already fundamentally changed our appetite to watch sports and will only become more prevalent with increased legalization. Research shows people are more engaged with skin in the game (every sport tech company addressing gamification preaches this non-stop). Once it was clear Super Bowl LV was out of hand, any gambler not personally invested in a team is no longer interested in a game’s outcome if their wagers are dead. Compare this year to last year’s big game, where the Chiefs staged an exciting fourth quarter comeback to knock off the 49ers. The result was always in question and viewership remained high throughout. Yeah but it’s the Super Bowl. Don’t you want to watch until the end? I’d argue 21 weeks of watching sports rooting for outcomes over teams (e.g., the favorite needs to win and cover versus simply win) instills a certain sticky behavior that even the Super Bowl cannot overcome.

Now that the game was played and viewership numbers are in, are any of the trends highlighted in Edition 1 of Chatting Sports Tech impacted?

Let’s revisit edition 1’s three trends: 1) Greater Marketing Discipline, 2) Experiences > Stories and 3) Importance of Building Goodwill. 

Starting with the easiest one, nothing about Super Bowl LV changes the importance of building goodwill in my opinion. Several other brands besides Budweiser came forward and announced foregoing their annual Super Bowl ad in favor of good causes.  

Regarding marketing discipline, I would expect the soft Super Bowl LV ratings result in future ad prices remaining relatively flat, possibly a bigger impact than my initial prediction of gradual increases. I’d expect recency bias to cause brands seeking timeslots towards the back end of the game to approach with more hesitation. The risk of a blowout means potentially less eyeballs and less eyeballs equals a worse ROI for advertisers (though the opposite argument applies if later time slots are cheaper and the Super Bowl then remains close). 

Reiterating the experiences over stories trend, several other brands followed Pepsi’s halftime lead, using their ad slots to drive traffic to other activations. Bud Light stands out, reuniting the subjects of its most famous campaigns around its Bud Light Legends Campaign but don’t forget Reddit purchasing 5 seconds from another company’s timeslot, causing thousands of people to hit rewind. Activations and experiences will slowly become the norm. 

Anything else?

One more point on advertising revenue. I found this chart of Youtube versus Netflix advertising revenue pretty interesting. Since fixed advertising budgets create a zero sum game (i.e., an allocation to one platform takes from another platform), Youtube drawing more advertising dollars means less dollars devoted to traditional media.

I hope you didn’t bet on my Super Bowl Prediction (Insert Smiley Face)

Shoot me an email and let me know what you thought. Would love to debate or discuss any of the above in more detail.  

Only ~350 days until the next Super Bowl,

– Charles

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