Sports lags behind in streaming video.
Streaming video has taken the TV and movie industries by storm in recent years. However, live sports has been the one traditional TV genre that has yet to make a major leap to streaming format. Media and technology companies know streaming sports could be a major long-term money-maker, but competition is fierce and costs are high. Loup Ventures analyst Gene Munster says live sports content is one of the few remaining reasons to keep a cable TV subscription. Munster recently took a closer look at how leading tech companies are approaching streaming sports content.
Amazon.com (Nasdaq: AMZN)
Amazon seems to have its toes in every emerging market out there, and streaming sports is no exception. It recently announced a partnership with the Premier League to stream 20 pro soccer matches per year starting in 2019. Munster says Amazon’s Twitch, a leading platform for esports, could be a game-changer for streaming sports. In addition to video game streaming, Twitch offers NBA G-league basketball games and Thursday Night NFL Football starting this season. Loup estimates Amazon paid $65 million for rights to 11 Thursday football games this season.
Verizon Communications (VZ)
Verizon subsidiary Oath holds the rights to NFL games streamed on Yahoo Sports and go90. Verizon reportedly paid the NFL $1.5 billion to stream NFL games, including the Super Bowl, over the next five years. Former Verizon CEO Lowell McAdam says the deal is part of Verizon’s push to become “the mobile destination for live sports.” Loup estimates that Verizon paid an average of $50.22 per viewer per game for its latest NFL deal, a much steeper price than Amazon’s $14.77 per viewer per game. Verizon’s deal includes a total of 256 games.
Twitter (TWTR)
Twitter was one of the first tech companies to test the waters on sports streaming. Twitter inked its first deal with the NFL in 2016 by paying $10 million, or just $3.76 per viewer per game, for 10 Thursday NFL games. In March, Twitter announced a deal with Major League Soccer to stream at least 25 soccer matches on its network. Twitter also recently renewed its deal with Major League Baseball to stream one day game per week throughout the 2018 season. Unlike MLB’s exclusive deal with Facebook, Twitter’s rights are not exclusive.
Facebook (FB)
Munster says Facebook likely sees sports as an excellent opportunity to increase user engagement on its Facebook Watch video platform. Facebook has exclusive rights to stream 25 MLB games this season. Facebook has ventured into the streaming sports realm before, partnering with Twenty-First Century Fox (FOXA) to stream UEFA Champions League soccer last year. Facebook also had exclusive rights to 15 NCAA college football games in the 2017 season. Facebook is reportedly interested in committing “a few billion dollars” to global sports rights in the near future and is also targeting esports viewers with its Fb.gg streaming hub.
Alphabet subsidiary YouTube has been taking a somewhat different approach to sports streaming. YouTube TV serves as a streaming simulcast of traditional broadcast networks, giving network viewers a streaming alternative to TV. By taking this route, YouTube is avoiding the steep costs associated with exclusive rights. YouTube recently raised the price of YouTube TV from $35 per month to $40 per month but said it will be adding MLB Network and NBA TV to its growing list of channels. YouTube is clearly targeting sports fans, with 96 percent of its recent TV ads airing during sports programming.
Walt Disney Co. (DIS)
In the past, Disney subsidiary ESPN was the undisputed king of sports content. However, a wave of new competition has risen to challenge ESPN in recent years, and Disney is fighting back. Disney launched sports streaming service ESPN+ in April. For $5 per month ESPN+ gives viewers access to thousands of sporting events that are not carried by ESPN’s TV networks, including one game per day from both MLB and the National Hockey League. In 2017, Disney also acquired BAMTech, the company which helped develop the MLB TV streaming service.
Netflix (NFLX)
Netflix is the poster child for digital TV disruption. However, interestingly enough, Netflix and CEO Reed Hastings have shown absolutely no interest in streaming sports content up to this point. In 2018, Netflix is reportedly spending $8 billion on content, but not a single penny is going to sports. Hastings said Netflix plans to focus on perfecting what it does well rather than chasing competitors who are experimenting with live sports, news and other content. Munster says it will be interesting to see if Netflix sticks to its guns as sports streaming becomes more popular.
Apple (AAPL)
Apple seems to be taking YouTube’s approach to sports streaming. Last year, Apple added a dedicated sports section to its Apple TV app, and the ESPN and ESPN+ services are supported by the TV app on iPhones, iPads and Apple TV devices. Apple has yet to land any exclusive sports streaming deals, and Munster says the company will likely focus on investing heavily in original non-streaming sports content in the near-term. With more than $267 billion in cash on its balance sheet, Apple could also easily afford to pursue exclusive deals or even buyouts of existing streaming companies.
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