Over the past two weeks, there has been a flurry of deals and developments in the sports streaming marketplace:
The tempting conclusion is that we are witnessing a significant shift in live sports distribution as Apple, Comcast and WarnerMedia join Amazon and Disney in streaming sports.
But, there remains the "interesting question" of "what the value of sports IP is to streaming", which I raised in Amazon, MGM, and How Lina Khan's FTC Misunderstands the Value of IP in Streaming. I concluded that because sports IP does not (yet) drive viewership at a scale that competes with linear, it instead may be more valuable for driving paid subscriptions.
In other words, streaming is not (yet) a one-to-one replacement for linear distribution of sports broadcasts, and is more valuable as a customer acquisition tactic. A favorite quote of mine from NBA owner Mark Cuban - given in an interview with SportsTechie in April 2020 - suggests it may not ever be a replacement for linear:
One of things that’s changed dramatically in terms of making our games available is that we’ve gone from a bandwidth-constrained environment on paid TV to a non-bandwidth-constrained environment. … With the Mavericks, we’re having conversations: Can we have three, four, five streams of the same game that’s going on traditional TV? You might have one where you have Twitch-like announcers; you might have two of your favorite YouTubers that are doing another stream; you might have your traditional broadcasters doing another stream; you might have a players-only doing another stream. We don’t care if there’s four, five, six streams—we care about the aggregate audience. By setting the priority of being an aggregate audience, then we can do things to experiment and try a lot of different things.
Then there’s the element of gambling. You can have a gamblers feed where it’s geared toward the prop bets going on right now. That might be an element for paid TV that’s kind of a salvation. One of the problems with streaming is that you don’t know what’s going to buffer or when, and you don’t know if everybody is getting the feed at the same time. There’s a delta between a satellite feed and a cable feed and even a good stream—and that’s an issue for gambling on some level, maybe 5G changes that with low latency. But there’s a unique opportunity to juice up paid-TV subscriptions and get gamblers in particular say, ‘There’s this unique paid-TV feed that’s geared toward prop bets, gambling, so I know what’s happening.’
Effectively, Cuban is making two points:
They highlight the inherent uncertainty in sports distribution: Audiences no longer have a single solution for watching live sports, but linearr remains the dominant consumer behavior in the cord-cutting era.
If we look at the above six stories through the perspective of these two points, the uncertainty in sports distribution that Mark Cuban highlighted two years ago remains true, if not worse.
[Author's Note: The rest of this essay will be exclusive to members, only.]
The basic premises of an aggregate audience is that: