Sports and television prospered together. The future of our entertainment is shaped by whether streaming and sports can repeat their almost happy partnership.
My colleague may be willing to pay billions of dollars on popular sports such as the National Football League and the National Basketball Association recently for YouTube on Amazon, Apple, and Google to move games from TV to high-tech streaming services. I reported.
For decades, television companies, including CBS and ESPN in the United States and Sky in the United Kingdom, have paid large sums of money to sports leagues to become the only place where people can watch games. Television money enriched sports and influenced entertainment and culture. Broadcasting sports has made television richer and more powerful.
Today’s newsletter addresses three questions related to tech companies following old school television playbooks and taking a big step towards broadcasting sports online.
1) Why do tech companies want sports?
This is the obvious answer. Companies want to attract subscribers to video streaming services, and many people love sports.
There are two unknowns to Silicon Valley bosses. First, no one has yet proven that many people sign up for and stick to streaming services to watch six months of baseball games and top European soccer games. (For fairness, so far few popular sports can only be watched online.)
The relevant question is whether, like old-fashioned television, big tech companies think it’s logical to pay a stupid amount to a sports league.
Calculations may not work well for streaming companies. Disney raises billions of dollars annually from cable companies to include TV channels such as ESPN in its programming lineup and more from advertising. This is a huge amount of cash to pay for NBA games, squash, and more.
Streaming subscription fees have no similar effect. Netflix, the largest streaming company, makes about the same annual revenue as Paramount Global, a relatively small TV company that owns CBS and the Comedy Central TV network and streaming service Paramount +. Streaming is great in many ways, but it may not be profitable enough to maintain a sports industry complex.
Counterpoint: Apple, Google, and Amazon have endless money and can afford to lose money to see if the sport attracts a lot of new subscribers. But don’t hesitate to revoke your sports webcast contract if it doesn’t meet your company’s goals.
2) Why do sports leagues want streaming?
The big time sports league has two sometimes conflicting missions. They want as much money as possible and want a huge number of viewers for the game. Tech companies can offer the first, but not necessarily the second.
So far, TV sports have far more viewers than Internet sports. In fact, it’s puzzling. Kevin Draper, a sports reporter at The New York Times, told me that if the same NFL game were broadcast simultaneously on the Fox TV network and Amazon Prime’s streaming service, Fox would see many times more viewers. During the Super Bowl About 90% of viewers Watch on old, boring TV, not online.
This is a dilemma for sports executives. They’re excited that Apple, Amazon, and Google may give them cash to stream sports. We are also concerned that streaming services can reduce sports ratings and significantly reduce the value of leagues, teams and players.
Sports leagues can steal big bucks from tech companies — suppose the money is there. Or, they hedge their bets, keep the most popular on TV, and sell unobtrusive games to streaming companies.
3) What does this mean to us?
Probably higher streaming charges.
Anyone who pays for television, whether watching sports or not, will bear the costs of ESPN or CBS paying for college football games and march madness basketball rights. The cost of these sports has only risen over time.
It made sports a double-edged sword for entertainment. Games are the most popular TV show to date and are a major reason why Americans continue to pay for cable and satellite TV. But rising sports costs are persuading people to stop TV services.
Apple, YouTube, and Amazon can afford to spend billions of dollars on sports without raising subscription prices for streaming services. But hahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahaha If the cost of programming is much higher, the price of streaming subscriptions can also be higher.
I don’t know what will happen next. You can sketch a scenario where a streaming service has a long-term marriage with sports, as traditional television has done for decades. This is also great for fans, team owners and players.
You can also imagine the death spiral of sports and streaming. If people are fed up with the high streaming fees of sports, the league will have less money and fans.
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