Facebook’s failed $610 million dollar bid to stream the India Premier League, a popular cricket league, raises a basic question: Why did Facebook bid in the first place? It’s a social media company, not a sports broadcasting company.
The bid is an indication of Facebook’s evolution from a social media platform to a global entertainment and connection platform, shifting from a website where you check in with your friends and family to a website where you read the news, watch videos, shop and much more. Per CEO Mark Zuckerberg, Facebook’s overarching goals for the platform are to “connect everyone, understand the world and help build the knowledge economy.”
Facebook’s entrance into sports business accomplishes two goals vital to its brand growth: gaining new users and keeping current users connected and engaged. Engagement is a hot topic for any social media platform. The key to Facebook’s longevity (or any social platform, really) is to keep users returning and exploring new features—ultimately deepening their usage. If Facebook isn’t constantly evolving, it risks becoming stale.
A Foreshadowing of Bigger Things to Come
Its bid for the India Premier League was both an attempt to gain new users in a critical market and provide new features to the platform. At $610 million, it was a relatively cautious attempt to enter the world of sports. Despite the failure, it foreshadows a much more exciting bid for the much larger (English) Premier League. And don’t take my word for it: Manchester United’s Executive Vice Chairman Ed Woodward believes Amazon and Facebook will enter the mix for the broadcasting rights for the Premier League in 2019. The rumors of Facebook’s interest are mounting after its Head of Sports, Dan Reed, seemed to keep the door open to a bid.
To understand why Facebook would be interested, it helps to understand some basics about the Premier League. It is one of the world’s most-watched leagues of one of the most-beloved sports: football (or soccer, as Americans still insist on calling it). It features clubs immensely popular across the globe: Arsenal, Chelsea, Liverpool and Manchester United. It is frantic, frenetic and produces unforgettable live sporting moments.
The strength and popularity of these clubs is leading to massive growth for the entire league. The average Premier League club revenue is estimated to grow by more than 20 percent this season after a new worldwide television rights deal of £10.4 billion.
Facebook would need to offer up a hefty bid to beat out the traditional competitors during the next bidding war. Despite the huge fee, it could be well worth the cost to Facebook because it helps accomplish two key goals: gaining new users and keeping them engaged.
- How many new users? Facebook’s next billion users will need to come from the far reaches of the globe. Soccer is a global sport, and the Premier League is a global league. It makes far more sense for them to bid for the Premier League than more regional sports, like the NFL.
- How about engagement? If executed properly, Facebook could evolve to be the platform that fans go to watch, discuss and read about soccer. After all, “fan” is short for “fanatic.” Soccer provides a fresh source of news, rumors and headlines that would undoubtedly keep fans checking and rechecking their Facebook feed.
Facebook’s Role in Soccer Technology & Entertainment
With a move like this, Facebook could help complete the evolution in soccer technology and entertainment. Just a decade ago, a majority of soccer games could only be found on low-quality streams, often announced in a foreign language and with constant buffering and feed interruption. Now, fans can watch almost any game in the world live and in high definition. But there are still barriers to access: you need a cable subscription, not all matches are available for streaming, and smaller leagues and clubs get far less coverage than marquee teams and leagues.
Facebook could be instrumental in breaking down these barriers. Global rights to the Premier League could provide worldwide fans with access to their favorite team on the same platform they now interact on with their friends and family. It could help smaller clubs grow by increasing coverage, and could help fans from across the globe connect with each other over their love of soccer.
Even if Facebook decides the cost of the Premier League is too risky or fails in a bid attempt, it seems inevitable for soccer to stream on Facebook someday. A less expensive league, like the Italian or Brazilian Serie, would help accomplish the same goals, just at a smaller scale for a lower cost. One way or another, Facebook trends are fascinating to watch from a technology market research perspective, and I cannot wait to see what happens next on the live video streaming front for sports.