With Facebook’s venture into the world of football, we got to thinking about how sports rights can be monetized; does such an expensive bet on content work better in the OTT business model?

In a deal struck between the social media giant and Fox Sports, Facebook will offer live streams for double-headers during the group stage, four Round of 16 games and four quarter-final matches next season. The streams will only be available for US users, though the move is another example of a growing trend of social media sites capturing sports rights.

Twitter is another in its partnership with the PGA. Signed back in January, Twitter will stream 31 events and over 70 hours of coverage over its site. Amazon signed a deal to stream NFL over its Prime offering as well and YouTube has got the rights for several boxing bouts over the next couple of months.

The multi-play business model has been one which the operators have been chasing for a while, but does this new wave of social media sports streams completely undermine the move? Perhaps a question which should be asked is can a sports angle on the content-play actually work in the ARPU business model? Is there enough money to be made considering the vast amounts which are being forked out to secure the rights in the first place? The big question is who is going to get the biggest audience.

Both business models are reliant on the size of the audience. The telcos for instance are betting on the assumption that the attractiveness of the secured sport will lead to an increase in the number of people taking up subscriptions, whereas the OTTs are (mostly) reliant on monetizing through advertising spend to accompany any broadcast on the platform.

The OTTs can secure ROI in a shorter timeframe as free content will attract users almost immediately, but then there is no long-term commitment. For the telcos, its likely to be a slow-burner meaning longer-term contracts with the rights holders are needed, but then they do generally have cash coming from a user for at least six-months.

Although we do not have the answer as to which one is a more suitable business model, or which has the potential to make more money, it is clear the two cannot co-exist. The number of fans is limited, and both camps are chasing the same people. Considering the amount of money which we are talking about to secure the rights, one will eventually win out over the other.

While most of this saga is being played out in the states for the moment, you can see the battle beginning to warm up in the UK as well. Sky was previously the home of the Champions League, though BT has had to fork out some serious cash to complete its own multi-play offering. We appreciate Sky is not an OTT, though it does operate a similar advertising-based business model. And yes, it does charge its customers a monthly rate, but should you complain, this will be lowered. Sky realises there is more value to having you as an advertising metric than a monthly subscription revenue.

The big question which remains in this battle is whether BT can monetize the deal effectively, or provide a good enough experience for the customer to ensure it is enhancing the brand. BT paid £1.2 billion for the Champions League, which will give it the rights to broadcast the competition until 2021. That is a lot of phone contracts which need to be sold to justify such an amount and we haven’t even addressed the other costs associated. How about running a studio? Hiring extra staff? Advertising the deal? Logistics of managing a content business?

On the other side of things, the OTTs are paying less money for the initial rights, but there is no guarantee of audience, and nailing the experience will be a bit more of a difficult job. A strong number of users will watch the content on mobile devices; if the experience is not up to scratch, what is the point? Sports fans are passionate and they will be prepared to pay a monthly subscription to watch their team. If the OTTs don’t nail it, it will be a non-starter.

So it’s an unanswered question for the moment. But there will be one before too long. Slugging away at a business model which isn’t making enough money can only go on for so long. One camp has to give and we’re not too sure which one it’ll be at the moment.