Three Reasons Sports Need to Worry About Facebook Live

Facebook's annual developer conference, F8, is over. Facebook Live is here and according to Mark Zuckerberg, the future is now.

After months of hints and speculation, Facebook Live has officially arrived, and its mission is to become the number one destination for live streaming video. Either already available or soon to be available to Facebook's nearly 1.6 billion active users, the tool will allow not only allow users to live stream from any device -- F8 was streamed live from drones during F8 using Facebook Live -- they've also opened up the API to developers, which means the video streaming possibilities are endless.

Those endless possibilities? They should be a serious concern for broadcasted sporting events.

While the 10-game, $10M live streaming deal that Twitter recently signed with the NFL may be the wave of the future, it is no secret that the revenue stream of the present is the sale of broadcast rights. For example, the NFL's television deals, re-negotiated 2011, bring in roughly $7 billion dollars a year in revenue to the NFL according to Forbes, while the NBA currently is in the middle of a 9-year, $24 billion dollar TV deal with ESPN and Turner, a deal that nearly tripled broadcast rights revenue from $930M/year under the previous agreement to $2.6B a year. Broadcasters pay gobs of money for the exclusive right to broadcast live television events, but Facebook Live could be putting those broadcast rights in danger. Here are three reasons why:

Facebook Live is more robust than the Periscope application

Facebook Live was built to kill Periscope, the Twitter subsidary app that currently holds the live-streaming crown. Unfortunately for Periscope, despite the one-year advantage of the release of the two applications, one could argue that the younger program has dwarfed its older competitor before the battle truly begins. Facebook Live allows you to watch the streaming videos on a computer (which could then easily be streamed to a television), and unlike Periscope, the streams can last forever. Depending on which professional sports league you ask, Periscope isn't even a hindrance; its a marketing tool,

“We understand in today’s game people sharing those experiences is part of what they want to do when they go to a game,” Andrew Patterson, director of new media at MLB Advanced Media told BuzzFeed News in a phone interview. “Any time there’s an opportunity on the baseball side to do a Periscope and push it out we’ll definitely do those.”

So what changed? Well, despite Wilpon and others within the league’s initial skepticism, MLB went full blast on the Twitter-owned Periscope because it decided its value as a marketing tool far surpassed its potential to cannibalize broadcast revenue. And, as it turned it out, the league discovered Periscope didn’t pose much of a threat to broadcast anyway.

“If you think about what the broadcast experience is, it’s very produced, you see the close-ups, you see highlights, you see all those pieces, and that’s not mimicked in any way on Periscope,” Patterson explained. “We don’t think it’s going to be a replacement for broadcast.” (via BuzzFeed)

Facebook Live, on the other hand, is literally giving its users the ability to do the one thing that made Periscope MLB-friendly; Facebook Live users can create multi-camera, highlight filled videos,

"A TV studio in your hand". It says it right in the video! How long before an enterprising Facebook Live user goes to a sporting event armed with a Mevo and creates their own highlight reel? Or they take the television broadcast and add their own zoomed-in angles? The take-down notices could be astronomical. Especially since...

Facebook Live will have more users than Periscope 

As of December 2015, Facebook had 1.04 billion daily active users, 934 million of which were daily mobile users. On the other hand, Periscope had 10 million registered users in August of last year. Facebook has spent the last few months signing up celebrity endorsers and adding features to Facebook Live, the company is throwing serious dollars towards the application to create quick growth. Facebook Live is also integrated into the Facebook app (e.g. not a standalone app), so Facebook can easily draw on the active Facebook users for its new Facebook Live product. Even if 5% of Facebook's daily active users began using the service, their user base would be more than quadruple that of Periscope. Five percent seems like a very conservative estimate.

People have the propensity to stream sports

In the coming weeks, hundreds of millions of Facebook users will have the ability to create high-quality, broadcast-level, live video. Hundreds of millions. HBO-Showtime had trouble dealing with the hundreds of illegal, live Periscope streams during last year's Mayweather-Pacquiao fight, to the point where you had 10,000 people illegally watching the fight on a single Periscope feed. Periscope was so pervasive that night, then-Twitter CEO Dick Costolo actually tweeted "Periscope won the night". How will Facebook or anyone else be able to tackle the exponentially greater number of Facebook Live feeds that may spring up during the next big sporting event?

Mark Zuckerberg is bringing the future to the masses, and the future is looking bright... for everyone except the broadcasters of live sports.

 

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