Out Of Home Experience: Trends In Sports Viewership

by: SportsETFs, LLC

Summary

Sports viewership on traditional television has been in a decline.

Viewership outside of the home adds meaningfully to viewership statistics.

Out-of-home viewership strong in important younger demographic groups.

Sports sponsors benefit from being able to reach more eyeballs.

Partnerships with the major U.S. sports leagues provide many potential benefits to companies who sponsor them, including increased brand awareness and recognition, the ability to create a favorable impression due to association with a team's fan base and potentially increased sales. However, declining viewership of traditional television viewing has been of concern to sports sponsors. After all, if fewer people are viewing sports on television, the lower the potential benefits.

However, a new television viewer tracking metric - out-of-home viewership - sheds new light on this issue. In particular, it shows that people are viewing television programs, and in particular, sports, outside of the home. Television viewership increases dramatically when factoring in this metric, and sports is the biggest beneficiary of this trend. Viewership in the important 18-34-year-old group was favorably impacted. This bodes well for companies that sponsor sporting events as it shows that people are still viewing sporting events on television.

Investors can benefit from the potential benefits of sports sponsorships by purchasing shares of companies which are sponsors of the major sports leagues and team.

Alternatively, investors can purchase shares of FANZ - the ProSports Sponsors ETF - which invests in companies that partner with the major U.S. sports leagues. FANZ can be used as a portion of an investor's core equity allocation.

Where Are People Watching Television?

Walk into nearly any bar, gym, airport, or office and you are likely to find not only a television but also viewers of all sorts with their eyes glued to the set. They are watching many types of shows, including sports. These viewers, outside of the confines of their homes, are important to networks and advertisers. It is equally important to know what people are watching when they are outside of their home.

Television Viewership Often Occurs Outside the Home

In October 2016, Nielsen announced that it plans to leverage its Portable People Meter (PPM) technology and panelists to measure out-of-home viewing for national television clients. Clients that subscribe to this service will receive audience estimates that combine in-home television viewing, based on Nielsen's National TV ratings panel, with out-of-home (OOH) viewing based on its PPM panels. Nielsen began tracking this information as of the beginning of 2017.

Viewership Increases When Looking at Out of Home Viewership

Nielsen released the initial results of their new OOH measurements that covered the time period of January 2017 through May 2017. Their data found that OOH viewing can contribute to significant ratings lift, but the life can vary depending on the content and viewer demographic, particularly the age group. Their data showed that 26% and 32% of OOH impressions were attributable to viewers aged 18-34 and 55 and up, respectively. But their data showed that nearly 60% of OOH viewing comes from the core buying demographics.

While the data showed that nearly one-third of OOH viewing stems from older generations, it found that the largest viewership lift came from the 18-34 age group. This age group showed an 8% increase from in-home viewership. Expanding that to the 18-49 age group, that viewership lift was 6%. The data showed that females accounted for 51% of OOH share, although mean experienced a 5% lift versus a 4% lift for females.

Sports Viewership, In Particular, Increases Dramatically

What types of content received the biggest boost from OOH viewership. Hands down, it is sports. According to Nielsen's data, OOH viewership on sports events averaged 2 hours and 37 minutes. Next up, at 2:02 was news. Sports programming received a 9% increase in ratings when OOH was included.

ESPN: Case in Point

In December 2017, ESPN shared ratings data which incorporated Nielsen's OOH measures into a total live viewership number. ESPN's measure also includes a measure that includes streaming. The data showed that millennial's sports viewership increased by as much as 33% incorporating the OOH measure. The period covered 9/25/17 through 11/12/17. They found that the network's total live audience ratings increased 23% in day viewings and 28% in primetime telecasts. ESPN was the first client to opt in to the company's OOH reporting services.

2017 Tidbits

Nielsen recently released its Year In Sports Media Report. They noted that NFL viewership increased that most in the 18-24 age group in the September to December period and noted that the coastal regions of the U.S. experienced the biggest lift in this age demographic's viewership at 22%, while the interior regions experienced a 12-14% lift. Female viewership of the NFL also increased by 27% and 16% in the 18-24 and 25-34 age groups, respectively.

Nielsen noted that "Sports properties will be empowered to strengthen sponsorship sales stories by providing a more complete picture of where and how fans connect with sports content."

Summary

Contrary to popular opinion, interest in sports in the United States is not dead. However, what is changing is the manner in which viewer consume sports content. We have previously noted how this consumption has shifted to more digital formats such as streaming on social media. What is also clear is that there is a large number of people viewing sports outside of their home. Accurate measurement of total viewership can help the sports leagues, broadcast networks, and sponsors appropriately analyze and evaluate sponsorship opportunities.

Disclosure: I am/we are long DIS.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.