A latest streaming giant that can mix the sports assets of Fox, Disney’s ESPN and Warner Bros Discovery is poised to reshuffle the TV industry – and experts say the massive loser will likely be the cable business.
The yet-to-be named standalone service, slated to launch this fall, will account for roughly 55% of the sports rights within the US, in line with a Citigroup analyst.
It won’t stream NBC’s “Sunday Night Football” or NFL games airing on CBS, which this yr will broadcast the Super Bowl.
Nevertheless, experts say the brand new app will likely get the ball rolling on reshaping the pay-TV landscape as streaming giants like Amazon, Apple and Netflix proceed to hike up the already staggering price for sports rights.
“The newly announced joint-venture goes to send shockwaves through all the media world,” said LightShed Partners analyst Wealthy Greenfield. “Is that this opening a Pandora’s Box?”
Crucially, the brand new venture is targeted squarely on sports – the important reason that the majority cable-TV subscribers are still hanging on.
It combines the might of the three media titans that broadcast the NFC Championship Game, the College Football Playoff and other top-tier bowl games, the NBA Finals, the World Series and the Stanley Cup Finals.
That poses a serious threat to Comcast, owner of NBCUniversal, in addition to CBS owner Paramount Global.
Greenfield said that networks not included in what he dubbed the “Winner’s Bundle” are scrambling.
“Whether you might be Paramount, Comcast, NFL Network, AMC Networks, A&E Networks or station groups with large numbers of NBC or CBS stations, the successful launch of Winner’s Bundle is your worst nightmare,” he said.
Nevertheless, it’s doubtful whether the brand new package spells doom for cable.
While it’s going to be available to ESPN+, Hulu and Max subscribers, giving cord-cutters access to an enormous amount of sports content at a price point somewhere north of $40 a month, it’s going to still fall wanting the complete breadth of sports coverage available on cable.
NBC and CBS own the rights to several top-rated events.
Apart from “Sunday Night Football,” the Peacock Network is home to Notre Dame football, and the Summer and Winter Olympics, while CBS televises the NCAA Men’s College Basketball Tournament (it shares rights with WBD), the AFC Championship Game and The Masters golf tournament.
“I don’t think it’s going to be the ultimate nail within the coffin of pay television,” said Robert Thompson, the trustee professor of television, radio and film on the S. I. Newhouse School of Public Communications at Syracuse University.
“In the event you start adding it up and also you like sports, you’ll pay at the very least $40 for the service but you’re still going to want to observe the NFL games that are usually not on the platform,” he added. “You’re going to want them a method or one other.”
Indeed, Fox Chief Executive Lachlan Murdoch emphasized the venture isn’t meant to cannibalize pay TV, but as a substitute attract latest streaming subscribers to the fold who’ve been underserved.
Seizing on that time, Murdoch estimated there are greater than 60 million homes within the US of “cord-nevers and cord-cutters” – mostly younger viewers – that the brand new app could attract.
“There is no such thing as a product serving the sports fans that are usually not throughout the cable TV bundle,” Murdoch told analysts during Fox’s earnings call Wednesday.
Still, the Winner’s Bundle could exacerbate the trend of ditching cable for cheaper options.
Morgan Stanley analyst Benjamin Swineburne noted that cord-cutting is slowly killing the profitability of cable, with pay TV households down 25% since 2018.
Perhaps the largest profit from launching the service is that it could give the media firms some leverage over cable distributors and their rising carriage fees.
Last August, Charter Communications blacked out ESPN and ABC hours before kickoff of the Jets-Bills game on “Monday Night Football” in a dispute over carriage fees with Disney.
The impasse lasted greater than every week until Disney agreed to supply Disney+ and ESPN+ streaming services to Charter’s subscribers in exchange for the cable operator paying the next carriage fee for Disney’s other channels.
Thompson said the brand new service could just be step one toward other unlikely marriages.
“We’re going to see some interesting bundling and pairing up,” Thompson said. “It’s like this whole entertainment industry is playing musical chairs and the music may be very much playing.”
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