Live sports are the last bastion of pay TV, but even that pillar is starting to crumble, thanks in large part to streaming services that are getting access to premium sports.
Major League Baseball (MLB), for example, is giving control of streaming rights in local markets back to its teams, meaning clubs can start selling those rights now… as long as they continue to honor contracts with regional sports networks (RSNs).
It’s a move calculated to reach baseballs’ biggest at-risk audience: Younger viewers, especially Millennials.
“The biggest single change was the return of certain
in-market digital rights—the rights that have essentially become substitutional
with broadcast rights—those rights will return to the clubs,” MLB commissioner
Rob Manfred said. MLB previously controlled those rights for all 30 teams.
MLB has conducted a number of experiments in the past with Facebook and YouTube to stream pre-season games and a small number of in-season games, as well, but this will mark the first time streamers will potentially have full access to an entire season, and the first time the rights could be exclusive.
Amazon is leveraging live sports
In August, Amazon reached a deal to buy 15% of YES Network, the RSN that broadcasts New York Yankee games, the Brooklyn Nets of the NBA and other sports content.
Reports say Amazon could distribute a bundle of Yankees games this season for $99.
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The Yankees won this year’s AL East division, before losing to Houston in the American League Championship Series. Despite that, and all the drama leading up to the playoffs, YES Network ratings were down 26% year-over-year through August and ended up off 19% for the year, according to reports.
The MLB announcement and the Yes Network/Amazon deal could kick off a wave of additional deals as teams look to leverage the reach of Internet video and its appeals to younger viewers. It also allows clubs to recast their broadcasting strategy, moving away from primarily ad-supported to subscription-supported services.
Amazon scores with EPL, too
Meanwhile, Amazon scored big time with its deal for English Premier League (EPL) soccer matches that it began streaming this week.
Ampere Analytics said the deal has extended the reach of live coverage of the games to nearly three-quarters of UK fans. Amazon holds rights to televise 20 matches each season of the Premier League for the next three years.
Two games were aired Tuesday, and Amazon Prime Video will show the games this week and on Dec. 26 and 27.
The matches didn’t go off without issues. There were reports that the action was delayed by up to two minutes, and that commentary was out of sync with the action. Still, there were just 261 complaints at its peak on Downtracker about issues.
But Amazon, which has experience with U.S. football through the Thursday Night NFL Football programming, kept some fans happy by not “just putting TV on the Internet.” It allowed fans the option wo watch the game with crowd noise but no commentary and also provided a live data stream that viewers could use to check lineups and watch game highlights.
The bottom line
Live streaming sports will challenge pay-TV even more moving forward. Major League Baseball and English Premier League are not alone in discovering the allure of streaming and the potential is holds for reaching new, as well as maintaining existing, audiences.
In addition to the NFL, the NBA and NHL both have embraced streaming and are including unique offerings in their portfolio, including allowing viewers to buy just portions of games. And Disney-owned ESPN has added hundreds of live event to its online stream over the past several months.
Much of the actions from the 2020 Olympics in Tokyo will be streamed… in 4K.
Increasingly, operators, in the US especially, have begun to position themselves as connectivity companies, embracing the higher margins they earn from being Internet Service Providers than the razon-thin ones they earn from their pay-TV services.
With millions of subscribers already cutting the cord in the past few years and an estimated 40% of the remaining subscribers at risk of cord cutting, according to analyst firm MoffettNathanson, the future is grim for pay TV.