Why NHL TV Ratings Are Falling in Hockey-Crazed Canada

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Rogers Communications made a huge bet buying up national pro hockey rights for 12 years for $4.1 billion. Now it must monetize that deal by getting advertisers to pay for digital eyeballs.

In hockey-mad Canada, TV audiences for NHL games are tumbling, thanks in part to cord-cutting and digital media.

It turns out the country's national game is hardly immune to a generational shift in overall TV viewing habits. "In our research, we noticed that for the NHL, as well as for other pro leagues, there is a migration to online and mobile at the expense of TV. I mean why not, we see that for many kinds of content," Kaan Yigit, president of Toronto-based Solutions Research Group, told The Hollywood Reporter.

For cable giant Rogers Communications, which last year threw CAN$5.2 billion (US$4.1 billion) at the NHL for the exclusive national TV and Internet rights to NHL game broadcasts in Canada over the next 12 years, the recent Stanley Cup playoffs began well, thanks to five Canadian NHL teams in action during early rounds.

But ratings slid in the final two rounds as Canadian teams fell by the wayside, according to Numeris audience data. An average audience of 2.39 million for the final round fell 12 percent from the average audience of 2.72 million viewers for the 2014 championship final round.

Compare that to the 2015 NHL Stanley Cup playoff audiences on NBC soaring to an average 1.43 million viewers across NBC, NBCSN, CNBC and USA Network, resulting in the third-most watched postseason in 18 years. Recent Canadian NHL ratings could portend a tough future for Rogers if it fails to precisely measure for advertisers eyeballs for live games on tablets, smartphones and other digital screens.

Rogers is still lucky as hockey is religion in Canada, and top NHL players largely make up most of this country's entertainment star system. But turning a profit on its blockbuster exclusive NHL deal will inevitably turn on the wireless phone and cable giant monetizing viewership regardless of digital platform.

"The key to this deal has always been that we're able to own in Canada every (digital) platform and monetize every platform," Rogers Media president of Sportsnet and NHL properties Scott Moore said. Rogers has greatly expanded hockey game distribution in Canada, including on TV, radio, downloads to mobile phones and tablets, and via Rogers NHL GameCentre LIVE, which streams around 1000 games on a computer, smartphone or tablet.

The GameCenter Live platform for the first time streamed the Stanley Cup playoff rounds this year. And the Sportsnet.ca website saw video views for game highlights grew 445 percent this past NHL championship round, compared to the 2014 Stanley Cup final round.

"That's high demand among advertisers," Moore insists. And as Google Glass and 3D holograms promise to become bigger parts of the live sports viewing experience, Rogers will exploit those rights as well.

Of course, precisely measuring cross-platform audiences so advertisers pay top dollar for digital eyeballs remains a challenge. Moore concedes broadcasters everywhere are challenged to accurately reflect cross-platform viewing of all TV content.

"But we know they're watching and we know they're engaging and they're able to see the messages that we're able to do for our partners," Moore said. "We can argue over the cost per thousand, and the ratings, but is advertising on live sports helping their business? I don't think there's any question that live sports continues to be the best mass marketing tool for most consumer advertisers," he added.

Drew McReynolds, a telecommunications and media? analyst at RBC Capital Markets, said, beyond TV sets in living rooms, Rogers will need to find ways to monetize the increasing digital migration of eyeballs for hockey to make its pricey NHL deal work over time.

"Rogers is largely a wireless company, and as viewers consumer video on wireless devices, particularly outside of the home under wireless plans, Rogers will be able to monetize some of that viewership not just with advertisers, but through higher data consumption as well," McReynolds said.