A new streaming giant is poised to reshape the television industry by combining the sports assets of Fox, Disney’s ESPN and Warner Bros. Discovery, but experts say the biggest loser is likely to be the cable business. There is.
The standalone service, which is scheduled to launch this fall and has yet to be named, will account for about 55% of U.S. sports rights, according to Citigroup analysts.
NBC’s “Sunday Night Football” and NFL games on CBS, which will broadcast the Super Bowl this year, will not be broadcast.
Nevertheless, the new app is likely to kick-start a shake-up in the pay-TV world, as streaming giants like Amazon, Apple, and Netflix continue to raise already staggering sports rights prices. experts say.
“The newly announced joint venture will send shock waves throughout the media world,” said Rich Greenfield, an analyst at Lightshed Partners. “Is this opening Pandora’s box?”
Importantly, this new venture focuses squarely on sports. This is the main reason why most cable TV subscribers are still hanging on.
It combines the power of three major media outlets that broadcast the NFC Championship Game, College Football Playoff and other top-level bowl games, as well as the NBA Finals, World Series and Stanley Cup Final.
This poses a major threat to Comcast, owner of NBCUniversal, and Paramount Global, owner of CBS.
Greenfield said networks not included in what he called the “winner bundle” are being scrambled.
“Whether you’re a Paramount, Comcast, NFL Network, AMC Network, A&E Network, or a group of stations with dozens of NBC and CBS stations, successfully launching a Winner’s Bundle is your worst nightmare,” he said. Stated.
Nevertheless, it is doubtful whether the new packaging spells doom for cable.
Now available to ESPN+, Hulu, and Max subscribers, you’ll have access to a ton of sports content for more than $40 a month, but it still won’t come close to the breadth of sports coverage available on the Internet. cable.
NBC and CBS own the rights to several top-tier events.
In addition to “Sunday Night Football,” the Peacock Network is home to Notre Dame football, the Summer and Winter Olympics, and CBS airs the NCAA Men’s College Basketball Tournament (shared rights with WBD), the AFC Championship Game, and Masters Golf. Masu. tournament.
“I don’t think this is the final nail in the coffin of pay TV,” said Robert Thompson, executive professor of television, radio and film at Syracuse University’s SI Newhouse School of Public Communication.
“If you like sports and start adding up the money, you’ll end up paying at least $40 for the service, but you’ll still want to watch NFL games that aren’t on the platform,” he added. “You’re going to want them anyway.”
In fact, Fox CEO Lachlan Murdoch said the business was not aimed at cannibalizing pay TV, but rather at attracting new streaming subscribers who were underserved. He emphasized that the aim is to
With this in mind, Murdoch estimates that there are more than 60 million homes in the U.S. inhabited by “cord-freers and cord-cutters” (mostly young viewers), and the new app He said it could attract attention.
“There is no product that serves sports fans other than cable TV bundles,” Murdoch told analysts on Fox’s earnings call Wednesday.
Still, Winner’s Bundle could exacerbate the trend of ditching cable for cheaper options.
Morgan Stanley analyst Benjamin Swainburne notes that cord-cutting is slowly eroding cable TV’s profitability, with the number of pay-TV households down 25% since 2018. did.
Perhaps the biggest benefit of launching this service is that it gives media companies some leverage over cable distributors and their rising rates.
Last August, Charter Communications blacked out ESPN and ABC’s “Monday Night Football” hours before kickoff for the Jets-Bills game over a dispute with Disney over transportation fees.
The impasse lasted a week until Disney agreed to offer Disney+ and ESPN+ streaming services to Charter subscribers in exchange for the cable operator paying higher shipping fees for Disney’s other channels. This continued.
Thompson said the new service could be just the first step toward other unlikely marriages.
“We’re going to see some interesting bundling and pairings,” Thompson said. “The whole entertainment industry is playing musical chairs, and the music is being played really loud.”
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