Sports sites step nearer the gallows
Big three to dominate
Dotcoms were this week warned to expect more casualties in the saturated UK online sports market.
In five years' time the sector will be dominated by a handful of sites, according to Forrester Research.
It warns that betting revenues won't be enough to save many sites, stating that by 2006 only 15 per cent of their revenue will come from gambling. Other technologies, such as interactive TV, will take much of the betting cash.
Meanwhile, although the industry is expected to generate £700 million worth of bets by 2006, sports sites will only get to keep around a tenth of this due to pay-outs for winnings and taxes.
The report states that, without cash from betting, "the sports site market will still be over-supplied and, despite recent closures, more casualties should be expected."
Researchers also expect the market to be dominated by three major multi-sports sites by 2006 - Sports.com, Sky and the BBC. "Those that can't acquire strong, unique, focused content will die," it adds.
"To maximise both revenue and traffic, sites need to re-evaluate their promotional offerings," said Forrester analyst Rebecca Ulph.
"Advertising remains sports sites' revenue stream: It will contribute 58 per cent of income in 2006, but half of this will come from performance-based deals, up from seven per cent in 2000.
"To ensure that they attract advertisers, winning sports sites must offer online replication of offline sponsorship models, develop performance-based pricing, and exploit cross-promotional capability," said Ulph. ®