The cost of showing sport has skyrocketed in recent years (no pun intended). BT Sport’s arrival in the market has brought a lower-cost entry option but, combined with Sky’s price-freeze, the outlay required to show all sport available on UK TV has risen by more than 25% in the last three years.
Yet sport continues to thrive in pubs. The number of pubs showing sport has increased by 28% following BT’s entry to the market (Telegraph, 2014). Why is this? Well, firstly, there is more sport available to show than ever before, creating more reasons to visit (when activated well) and an entertainment package that is always on. Furthermore, the duration of sports events ensures dwell time in the pub is high, while canny operators are able to maximise spend per head and drive real value from sports viewers.
So, what’s the outlay required, how can pubs make the most of the content available, and what is the value of the customers that content brings in?
A massive investment
Showing sport requires major investment. The average subscription for Sky Sports is £15,750 (Financial Times 2014) and £4,740 for BT Sport (Morning Advertiser, June 2015). Additional content is available via Boxnation (£100 per month), Premier Sports (£60 per month) and Sky Box Office (2-3 events per year at c.£299 per event). Putting various discounts available to one side, it costs pubs around £63 a day to deliver a comprehensive sports package to customers.
If content represents ‘software’, then pubs must first invest significantly in ‘hardware’ – TVs, projector screens, and high-quality sound systems. A 50-inch TV costs over £500 and a mid-range projector over £300. With the quality of technology available in the home increasingly high, ensuring that facilities in the pub are superior to alternative viewing environments is expensive, but vital.
So why do pubs continue to make this investment?
Sports fans stick around
The nature of sports events leads to above-average dwell time amongst sports fans vs. regular pub visitors. According to MatchPint’s app data, sports fans spend 2h42 in the pub per visit on average (MatchPint, Tracking Data). This is 1h20 longer than the dwell time of an average pub visitor (Him! On Track report, 2012). These “normal” customers include a mix of sports fans and not, suggesting that the dwell time of the former may compare even more favourably than first appears.
Sports fans spend money
Recent research by M&C Allegra suggests that the average person spends £17.29 on a visit to the pub, including food. Sky Sports identify a figure of £16.60 for sports fans while Zolfo Cooper’s Leisure Wallet suggested £15.30 as the average spend of a average pub visit in 2012.
A recent survey of MatchPint users suggested that their average spend is £18.50, rising to £21.68 amongst rugby fans. Given the average age of MatchPint users is 26, and that they are likely to represent a slightly more tech-savvy customer of the future, the outlook for spend per head amongst sports fans looks positive.
Content is king
There is more content available on more channels than ever before. 6 Sky Sports channels deliver almost 60,000 hours of live sport every year. BT Sport Europe alone will deliver more than 400 hours of live Champions League and Europa League football. With British Eurosport delivering hours of cycling and tennis, Premier Sports championing Australian Rugby League and Boxnation providing near-weekly dedicated boxing coverage, consumers are spoilt for choice.
When a sports fan sits down on their sofa at 9am on a Saturday to watch the evening sport in Australia, they could spend the whole day watching high quality sport without moving a sizeable muscle in their body. All they need is a flick of a switch on the remote, a couple of clicks on the phone for a takeaway, and a scroll down their social media profile to keep an eye on what’s not on screen.
The key challenge for pubs and bars in making the most of sport is recreating this ease of experience outside of the home, taking advantage of the sheer breadth of content available as a means to not only draw people into the venue, but also to keep them in there and maximise both dwell time and spend.
Top tips and takeaways
1. Footfall: Provide more reasons to visit by utilising ALL the content provided by broadcasters – not just football.
2. Dwell time: Encourage dwell time switching between LIVE events quickly – no one stays at the pub to watch adverts, but the last 30 minutes of a 3-3 thriller from La Liga might just keep them in!
3. Spend: Increase customer spend by actively driving purchase outside of the traditional pre-game, half-time, and post-game slots – table service during the game doesn’t need to be sophisticated, sometimes it’s just remembering to ask a customer if they’d like another when collecting empties…
We all know that making the most of sport is about more than just switching the TV on and showing Premier League football, but by making small adjustments every day, the value of sport can increase dramatically. If we can make an extra £63 each day, by bringing in two more fans to visit, and encouraging ten existing customers to make one additional purchase because they’ve ordered while the game’s on, or they’ve stayed for an extra half an hour afterwards, then we cover the cost of sport via those incremental sales. The money we already make becomes pure margin on (broadcast) investment, and sport becomes even more of a profit driver, and so much more than a necessary business expense.