Streaming services have one battleground left: live sports
Disney, Fox and Warner Bros. Discovery to launch sports streaming service
Streaming services have always been missing one thing … and the big players in the space know it.
If they want to win the streaming war, they have to win the battle for live sports.
Netflix (NFLX) knows it.
Amazon (AMZN) knows it.
Apple (AAPL) knows it and, based on yesterday’s news of a joint venture to bring a sports streaming service to a screen near you, Disney (DIS), Fox Corp. (FOXA) and Warner Bros. Discovery (WBD) know it, too.
When Netflix rolled out its portfolio of mostly movies to eager streamers, back when the OG streaming service was getting its sea legs in 1998, it was great … for awhile.
Once people were all streamed out of that, though, they wanted series, too. Once they started to get sprinkled in with regularity, it was great … for awhile.
Series popped up on streaming services left and right — higher-quality movies were going straight to streaming, too — but it still wasn’t enough.
Something was still missing from the streaming landscape. Some things, really: news and live sports.
Before AT&T (T) sold its media properties to Discovery, news wasn’t particularly streamable. That changed thanks to the new sort of super streaming service stemming from the tie-up (Max).
Traditional media juggernauts like Comcast Corp. (CMCSA) have since normalized news and live TV. You can find both on Peacock.
Before Apple won the rights to stream Major League Soccer games in a 10-year deal worth at least $2.5 billion, you couldn’t stream much in terms of live sports unless it was Thursday Night Football on Prime Video.
That's since changed, too. Live sports have been trickling into the sea of streaming content for years. Now, thanks to the recently-announced service from Disney, Fox and Warner Bros. Discovery, that trickle has officially become, well, a stream.
New streaming service to make sports the star player
The fight for live sports, the final battleground in the streaming war, gained a new combatant this week as Disney, Fox and Warner Bros. Discovery — already with streaming options on the market — announced plans to make all of their sports programming available on one app. In other words, content from ESPN, Fox Sports and TNT, once reserved for ESPN+, Hulu and Max, all in one place.
The streaming service, which will be equally co-owned by each of the three companies, will launch in the fall. I like the idea of having access to college football on ESPN or ABC, baseball on TBS, Hockey on TNT, college hoops on FS1 … but it smells a lot like cable to me.
Not unlike a sports-only cable subscription (exactly like one, in fact), subscribers will be offered a list of networks. The price remains to be announced, but the new streaming service will also be available to existing ESPN+, Hulu and Max subscribers.
“The launch of this new streaming sports service is a significant moment for Disney and ESPN, a major win for sports fans, and an important step forward for the media business,” Bob Iger, Chief Executive Officer of the Walt Disney Company, said in a new release. “This means the full suite of ESPN channels will be available to consumers alongside the sports programming of other industry leaders as part of a differentiated sports-centric service. I’m grateful to Jimmy Pitaro and the team at ESPN, who are at the forefront of innovating on behalf of consumers to create new offerings with more choice and greater value.”
To me, this seems like great news for shareholders of Disney, Fox and Warner Bros. Discovery as it, more specifically the ad revenue it creates, should help all three … without any of the three companies really having to do much more than they’re already doing.
What’s the ESPN-Fox-TNT sports streaming service mean for the competition?
With MLB and MLS already under its coverage umbrella, Apple has been adding to it repertoire for years. Amazon, too, which pays about $1 billion per year to stream Thursday Night Football games on Prime Video.
YouTube, owned by Alphabet (GOOGL), pays $2 billion a year to make YouTube TV the exclusive home of NFL Sunday Ticket.
Netflix, the streaming service winning the streaming war by almost every meaningful metric, recently announced the Netflix Cup — a first of its kind live sports event featuring athletes from two of its sports-themed docs, Formula 1: Drive to Survive and Full Swing, in a match-play tournament at the 18-hole Wynn Golf Club at Wynn Las Vegas.
Set to take place on Nov. 14, it’ll kick off the week of the first-ever Formula 1 Heineken Silver Las Vegas Grand Prix, so that’s exciting.
I say all that to say this: I’m not worried about the other streaming services. Apple TV+, Prime Video and Netflix will be fine. What I am worried for, though, is the modern cable television industry, which I can’t imagine can possible live without the allure of live sports keeping its head above water.
As if cord cutting wasn’t prevalent enough already, the recently announced sports streaming service will only add more fuel to the fire … one that could be fatal to traditional cable.
Disclaimer: I’m a market participant, not a financial advisor. This is not financial advice.
