Through the hosting of the weekly StreamTime Podcast, I’ve been spending more time over the past 12 months talking to industry leaders and experts about the state of the US sports media landscape. And yet, I feel like understanding this space has become more challenging than ever.
This was in full effect at SportsPro OTT Summit USA in New York in March, where sessions and interviews with major industry leaders left me with more questions than answers.
So having had the chance to take stock of those conversations and opportunities to connect with people on the ground, here are my key takeaways from what I heard and learnt along the way.
1. There’s less conversation and excitement about FAST Channels than you think
Don’t get me wrong, there’s a huge amount of interest and traction around free ad-supported television (FAST) all across the globe. However, the major streaming services seem less excited about handing over the keys to their future to TV operating systems than many hoped. The major operators are still focused on building their own ‘walled gardens’ and audiences, and are instead prioritising an evolution of hybrid monetisation models as a way of making their content more accessible.
2. Sports teams are getting their RSN contingency plans ready
There is much uncertainty around the future of the regional sports network (RSN) model after Diamond Sports Group’s bankruptcy, but none of the teams are built for going to direct to consumer with a media offering given the centralised nature of sports rights in the US.
It’s actually one of the few areas I’ve seen where the US sports teams landscape is behind Europe. Much of this is a legacy of the centralised approach they’ve take to this point, but there still seems to be a genuine sense of uncertainty as to how to approach this new dawn of direct to consumer and regional sports rights.
3. Pricing strategy is the core marketing approach for all streaming platforms
Few of the major streaming players seemed to be focused on building brand loyalty and this is leading to increased levels of churn, making everything about price. At the same time, platforms like Netflix continue to increase pricing with minimal impact to existing subscribers.
Many would consider it marketing 101 to take the focus off pricing and instead shift the conversation towards the value the platforms are providing – but it appears the competition for market share has become very cheap and yet very costly to the major players in this space.
‘Forcing people into a hard bundle to buy sports that they don’t watch, as expensive as that is, has already proven to be a huge mistake’ – former @dazngroup chair Kevin Mayer on the #StreamTimePod— SportsPro (@SportsPro) April 5, 2023
4. Sports and entertainment bundles v sports-only bundles are a hot debate
Some see sports as the gateway drug to getting consumers hooked on a wider entertainment offering. Others see sports as their dedicated vertical and believe it becomes devalued when coupled with wider entertainment rights. You only needed to listen to the contrasting views of Warner Bros Discovery sports chief Luis Silberwasser and former DAZN chairman Kevin Mayer at Citi Field in March to get a sense for how this issue divides opinion.
5. Premium sports are still the most important content to streaming platforms
All key speakers talked about sport’s role in driving audiences, advertising dollars and subscribers. Rick Cordella, president of sports programming at NBC Sports and Peacock, explained that the reason the National Football League (NFL) rights are so valuable is not only because it drives TV ratings, but also because it’s perfectly suited to ad insertion when compared to other sports, allowing broadcasters to monetise those rights on a different level to any other sports product.
Everyone is watching YouTube and Apple’s moves in sports. YouTube’s investment in Sunday Ticket caught a lot of the industry by surprise, and it’s still unclear what that will look like in the future, with the concept of team-based subscriptions being floated. Currently, it looks like YouTube is launching with a similar proposition to the previous broadcaster of Sunday Ticket, DirecTV. It shows yet again that whilst the big tech companies have started to make waves in live sports, most of them are staying closer to the status quo in their approach rather than ripping up the playbook.
6. The initial rollout of Apple’s MLS relationship has been really positively received
However, it’s not been without its challenges. Many in the industry are still trying to work out the bigger play here for Apple. Is it Major League Soccer (MLS) or bust? Will the tech giant be willing to pay over the valuation for the National Basketball Association (NBA) rights, which are the last set of major league rights available in the US market for the foreseeable future?
Time will tell, but one thing Apple has shown us is that live sports streaming is STILL not easy given the challenges the company has had in the earlier stages of launch.
7. Nearly every major platform is being coy about NBA media rights
Speaking of the NBA, no one seems to know who will win out for those prized rights. Warner Bros Discovery has changed its tune since president David Zaslav said “we don’t have to have the NBA”, with Silberwasser more recently stating the importance of the basketball league to the organisation.
One thing is for sure: these rights are as sought after as any the US has seen for years.
8. Have we found the next Drive to Survive collaboration?
People were wondering what the NFL’s next big media move might be now that its broadcast rights are tied up for the next decade. Well, the league’s new partnership with Skydance could be it. With a huge focus on documentary content and global distribution, this collaboration of award-winning partners in NFL Films and Skydance could lead to the league’s version of what Box to Box Films has created for Formula One with Drive to Survive, allowing a truly global fanbase and audience to be curated along the way.
9. The media industry has been rocked by the stock market hit
Media and vendor valuations have plummeted and a lot of the industry is going into reset mode. This hasn’t stopped interest in sports, but it has made the way media and tech companies approach the market much more cautious than before. Some would argue the downsizing, dropping valuations and inevitable consolidation is just what is needed to be more fit for the industry dynamics in 2023 and beyond.
10. The advertising business is way more mature than Europe
Decisions on sports streaming rights in the US are built around their advertising value, whereas most in Europe are purely made on their ability to drive subscribers. Expect that to evolve in the coming years once the technology and approach filters across. But for now, the US streaming players assess the value of rights in a different light to other markets, which explains why the rights valuations dwarf other regions.
11. Automation, highlights and the cloud are taking over the technology and delivery conversation
I heard multiple people talk about companies like Evertz, Videocites, Teravolt, Magnifi, Backlight Streaming, WSC and AWS as key tools being credited by multiple sports properties for changing the way they approach the delivery of live sports streaming. There seems to be a nice mix of organisations powering the industry as well as a group of new businesses aiming to simplify content creation, distribution and monetisation, so there’s much to look forward to moving forward in this space.
🗣 "No matter what comes next, we've got to completely rethink this business model" – COO Michael Schneider addresses reports that Bally Sports is set to declare bankruptcy #OTTUSA23 #SportsBiz pic.twitter.com/qUNYSLyT4F— SportsPro (@SportsPro) March 14, 2023
12. The future of RSNs will have a huge impact on the entire US sports industry
Everyone is watching what’s happening with RSNs very closely. For many, the timing of the situation puts a lot of pressure on Major League Baseball (MLB) to weather the storm, whilst the other leagues, such as the NBA and NHL, hope the situation will be sorted by the time their new seasons start later this year.
We’ve already seen the Phoenix Suns and Los Angeles Clippers taking greater control of their local rights, albeit with different approaches. Expect to see plenty more activity while Sinclair tries to sort out its financial situation in the background one way or another.
One thing is for sure – and even Michael Schneider, the general manager of Bally Sports+, said it at the event – the whole model needs to change.