Diary of a Sports Cord Cutter: Carnage and Opportunity

By Brad Hubbard | @bradhubbard | 5.23.2017


It’s what they call in Washington a ‘True Fact’ that cord cutting is affecting the sports world in a major way. North America’s biggest sport rights holder, ESPN, is front and center in this battle of the cord cutting and the traditional way things have been done.  Subscribers are fleeing at a rapid rate (down 12% since 2010) and ESPN along with the sports leagues are trying to figure out how to stop the bleeding or profit from the change. While the traditional powers are nervous, small leagues and up and coming sports are rejoicing.

ESPN has spent billions on sports rights between the NFL, NBA, MLB, college football and others. To give you an idea of how much they do spend a year, they spend over a billion dollars on the NFL alone and they only get one game a week! With the old cable and satellite model being blown up, the network and the leagues are looking at every option available to them which is partially why ESPN’s parent company, Disney, bought into MLB Advanced Media last summer.

The NFL, MLB, MLS, PGA and NBA are already reaching out in different ways to get their live programing to their fans. Whether it is the NFL cutting a deal with Amazon or MLB and MLS signing deals with Facebook, the sports leagues are already preparing for the day when they see a decrease in the value of their sports rights. Gone are the days of multi-billion dollar deals for the exclusive right to show a sport. In the near future the leagues and big time college conferences will have to spread the costs among several outlets.

ESPN is approaching this transition a little discombobulated. The fact is that live streaming on platforms like Amazon, Facebook and Twitter will not replace the loss of dollars from the traditional cable/satellite/TV world. However, these new platforms are a life saver to niche or relatively new entities like eSports, MMA and others.

ESports were born online and are thriving on platforms like Twitch, YouTube and even Facebook. These OTT platforms are also paying a whole lot less for the sports rights than ESPN, NBCSports and Fox Sports are paying for traditional sports like the NFL and NBA. These new platforms also provide these niche or newer sports the right demographic and a ton of exposure.

What does this mean? A lot more exposure for League or Legends, Overwatch and even the UFC if they play their cards right.

Remember, these niche and newer sports and starting from scratch in a way. An mid eight figure deal for an eSports league or new MMA organization is a windfall for them. The same can be said for a non-power five conference like the Mountain West who floated the idea earlier this year of going to straight OTT model.

The fact is that Disney, Comcast, and Fox are unlikely to retract the amount of cable outlets they have. And if they are unwilling to play these huge amounts for the rights to the NFL, NBA and others then they’ll have to fill the hours on their networks somehow. That could give newer, cheaper sports entities like Riot Games League or Legends or the UFC an opportunity to swoop in provide quality content that pull desirable demos for a reasonable price.

The winds of change are upon the sports networks and leagues. You are already seeing layoffs because of these changes and you are going to see more. But these changes are inevitable and disrupting but not the end all be all. Opportunity does exist for the traditional sports networks and leagues but the have to accept the fact their options may not be as beneficial to them as things were in the past. For the newcomers, get ready for a windfall of money and a lot more exposure. Here’s to hoping that you know how to scale.

Diary of a Sports Cord Cutter: Low Hanging Fruit

By Brad Hubbard | @bradhubbard | 1.18.2017

It’s a bold new OTT world and some are failing to adjust. While they can blame it on whatever they want (contracts, technological restrictions, etc) in the end it’s a fear of the new. It’s a choice to be resistant to change and a longing for the way things were vs what they can be. That’s why ESPN, NBC and others are stumbling into the OTT/ on demand  world and can’t seem to recognize the easy wins staring them in the face.

30 for 30 error

The prime example being ESPN’s 30 for 30 series. While you can view this content on various OTT channels like Netflix and Amazon you may still have to pay for it. So first you have to pay some to get ESPN and if you are unavailable to watch it or don’t have a DVR then you have to pay to watch the rerun.

If you can actually find the 30 for 30 you are looking for on ESPN’s poorly designed page, you have to put up a bad video player and God forbid you have to pause the video and go to the bathroom. Then you have to pretty much start over. It’s shocking how some solid story telling can be give such a poor platform but a multi billion dollar organization.

YouTube has a better player and user experience. ESPN could leverage a solid 70-30 split and give fans access to some fantastic stories and not have to pay for the infrastructure costs but that would appear to be too easy.

NBC is an over the air broadcaster. Yes they have NBCSports which you can only access via a pay service (cable, OTT, etc) but why does a user have to authenticate their cable subscription to watch a sporting event online that is free over the air?

Why would you have to do that? Well there are several common cases. First, you’re not home and you would like to watch the game or event. Second, you can’t get the local NBC affiliate’s signal due to where you live.Your internet connection is not subject to line of sight limitations, so why do you have to sign up and pay to watch something online that is available for free over the air?

How bout the NFL Network and their inability to provide their series Timeline and A Football Life until after the current ‘season’ ends?

TimelineIt’s almost comical that the NFL Network wait’s to post things online. These should be online right after the initial airing. Fine give it 48 hours, the point is that these are great stories that you can charge money for. Being the capitalist organization that the NFL is, wouldn’t it make sense to make their original content available as many places as possible, on demand as quickly as possible?

These are all examples of low hanging fruit that provides nothing but wins for content providers. The difficult part isn’t doing them, it’s changing the mindset. Execs are being taken kicking and screaming into this OTT/on demand world. They at times seem paralyzed by what to do because they saw their cross town colleagues get chopped down to size and then forced, with no leverage, into the arms of Steve Jobs.  If only video consumers could be so lucky.

Diary of a Sports Cord Cutter: Easy Wins

By Brad Hubbard | @bradhubbard | 10.12.2016

Wednesday brings the opening of the 2016/2017 NHL season. With that comes a solid OTT package (full season for $140) and a once a week game live on Twitter. What of course is offered to cord cutters like myself is the league channel, NHL Network. Neither them nor MLB Network nor NBA TV are available in an OTT package but the NFL is. This seems like an easy win that the leagues are not taking advantage of.

NHL NetworkThe league networks have evolved over the years to include live games. NBA TV, NHL Network and MLB Network all show regular season games while MLB Network will actually broadcast a playoff game or two. If you are are cord cutter like myself you are out of luck when it comes to these. While that may not hurt all that much since the games are usually available with the OTT league package, it does make the decision for the casual instead of giving them the choice. If your the league and have your live game content available on every device/service know to man, why wouldn’t you cut a deal to get your network onto Sling TV or Playstation Vue? It seems like an easy win and a simple way to gain new fans.

 

MLB NETWORKWhen DISH Network (Sling TV’s parent company) and the NFL came to an agreement earlier this summer, it would seem that others would follow. All of the leagues are trying to stay relevant during the offseason with some original content, live draft coverage, etc, yet none of this content is available to cord cutters. On the surface it doesn’t appear to violate any existing TV contracts yet these channels and it’s niche content anyway which is right down the cord cutters avenue.

The league channels, outside of the NFL, are not a necessity for OTT providers or for fans. They really don’t ‘move the needle’ so to speak however, it is cheap, easy content for OTT channels and nice to haves for the end user.

The Digital Middle Ground

By Brad Hubbard | @bradhubbard


BallmerConsensus is that Steve Ballmer overpaid for the Los Angeles Clippers back in 2014. Considering that he is worth around $27 billion, spending $2 billion for an NBA franchise in the second largest TV market in the United States seems like a deal for someone in his position. Part of the reason that the NBA was more than happy to allow the former Microsoft CEO into the league was the fresh ideas he would bring. One of those is Ballmer’s push for the Clippers to have their own OTT channel which could open the floodgates for other teams, leagues and conferences.

Back in April the Sports Business Journal (SBJ) did an article about how Ballmer was cutting out the digital rights from the next regional TV package for the Clippers so they could start an Over The Top (OTT) channel where a user would authenticate with their regional TV subscription. This would not be a replacement of the live games but an addition to it.

Ballmer, like his time at Microsoft, is thinking logically but not necessarily radically. He is not refusing to see what is coming but he is unwilling to kill the cash cow and innovate into the next thing. Truth be told, the NBA may not be allowing him to go too far either.

Sound familiar? It should if you’ve read or listen to Harvard Business Professor Clayton Christensen and dove into his theory of disruptive innovation.

The fact is that sports rights are at their limit when it comes to rising costs and passing on those costs to the consumer. With the wage gap in the United States becoming such a major talking point this political season, it is becoming harder and harder for people to justify the monthly costs of a cable or satellite subscription to watch random games. The price may not be too high for just their local team though.

MLB.tv is doing something similar right now but it is designed for people outside of the TV foot print of the club. In other words, if you live in Seattle and don’t want to pay for cable then good luck trying to watch Mariners games online somewhere.

REMOTESeveral years ago when sports leagues begun creating their own TV channels like the NHL Network and the NFL Network, many people believed that it was only a matter of time before the league’s brought all of their games in house and cut out the traditional partners like NBC, CBS, FOX and ESPN. Well that hasn’t happened because of the billions that can be made by bidding out the rights to these partners. It appears now though that we are at a place where a league or conference can keep their digital rights and sell to a TV partner because that, in the end,is a win-win. It lowers the cost for the traditional TV partner but gives the league, team, or conference an avenue to grow revenue with their most valuable assets.

It’s one step back and possibly three steps forward type of scenario.

The Clippers are not going to walk away from a regional sports deal that pays them upwards of $50 million a year. Even Ballmer isn’t that crazy. However, retaining the digital rights can give him a lot more flexibility even if the Clippers are not going to be live streaming the actual games with their OTT channel. It’s a logical yet still a trailblazing move. Kind of wonder why the Dallas Mavericks owner Mark Cuban didn’t do this already.

 

Ratings Madness

By Brad Hubbard | @bradhubbard


Now that the college football season is officially down and the dust has begun to settle, there was something interesting that came out of the ratings for the National Title game, online growth.

GoalLineNTGThe WatchESPN app say a 38% year over year growth. According to The Futon Critic, the College Football Playoff kicks but for ESPN digitally. The six total games in the first two years of the College Football Playoff rank as the most viewed events on WatchESPN.

While the 1.9 million plus unique viewers does not make up for the almost eight million who didn’t watch on ESPN, it is nothing to shake a stick at. In fact, it’s pretty damn impressive. That number includes cord cutters, people on their mobile devices, etc.

While the year over year number for TV viewership was down, the number for streaming was up. Expect this trend to continue as more services like Sling TV become available.

Final Four Exposes Streaming Limitations

By Brad Hubbard | @bradhubbard

The Final Four was, like usual, one of the must watch sporting events of the year. How you were watching it became a matter of if you could watch the Final Four at all. So is streaming ready for mass viewing? Maybe not.

SLING TV

Sling TV, the new streaming service from Dish, had some issues during the Wisconsin vs Kentucky game on Saturday. Peter Kafka of Recode wrote pointed out that Sling TV saw a lot of signups and just a lot of users all jumping on. This caused some people to get crap video or no video at all. (On a personal note, it sounds like the load balancers were not distributed correctly.)

This game was the highest rate game in 22 years of the NCAA Tournament with an overnight rating of 16.4/30, and that’s just on traditional cable television. In the same PR release, the NCAA Tournament did 77 million live streams through Saturday. That’s up 15% from last year.

The demand is there but is the infrastructure there? There are a lot of variables to this. People have pointed out that streaming services have conked out due to high demand in the past. Knowing this, why wasn’t Sling TV ready? Come to find out that Sling is capping the amount of people who can use the service to two million users. While they are nowhere near that number (they are supposedly around 100,000 subscribers) it’s still pretty shocking to see that they couldn’t handle the influx of traffic and new users.

Streaming big sporting events is not going to stop. It is going to continue and it’s going to grow. The bandwidth has to be there and so does the anticipation. Even if you do not see the a massive influx of traffic during an event you have to be ready for it. It’s the old adage, ‘better to have it and not need it than need it and not have it.’ Let’s hope Sling TV and others learn from this and are ready the next time a major event happens.