Disney and cable operator Altice (owner of the former Cablevision properties) came to a last-minute agreement on Sunday to avert a blackout both sides had been warning customers about as they negotiated new terms. This has been one of the first big renegotiations for Disney since it became clear how badly the ESPN business is going from a subscriber perspective, and as such is seen as a bellwether for how the next few years will go for Disney. All the details haven’t emerged yet, not least because the sides are still apparently hammering some of them out, but it’s clear that Altice did pay for price increases, though not as large as Disney wanted. That’s critical because regularly contractual price increases have been the thing keeping many cable operators’ revenues growing even as their subscriber numbers have been falling. If the increases aren’t large enough to offset the declines in subscribers, that picture starts to change, and so far we don’t know for sure whether that’s the case. But whether Disney is able to get the price increases it needs to stay ahead of subscriber declines is the critical factor in future negotiations. Altice is one of the smaller pay TV providers in the country, and if it had sufficient leverage to negotiate price increases down, that likely doesn’t bode well for Disney going forward. You’ll see headlines saying that the deal demonstrates pay TV companies will still pay for sports, but that was a given – the question was how far Disney would budge to ensure that remained the case.
Amazon Saw Under 400k Viewers for First NFL Game (Oct 2, 2017)
This is the second piece I’ve done on Amazon’s Thursday Night Football debut last week – see here for the first. After I wrote that piece, the NFL released audience numbers for the broadcast, and they show that just under 400k people watched the Amazon version, while 14.6 million people watched the live broadcast on CBS and the NFL Network, and 243k watched Twitter’s debut broadcast last year. On the face of it, it’s impressive that Amazon, with its much smaller number of members relative to Twitter, and with a sign-in requirement, was able to achieve broader viewership, but it also arguably promoted it much more heavily than Twitter did last year before its first game. It was certainly promoted heavily within the Amazon Video apps on various platforms the day of the game, making it hard to miss if you logged on planning to watch something else. And it’s also possible that interest in all NFL games is heightened at the moment because of the recent controversy over kneeling during the national anthem by players. The real question, of course, is what Amazon’s goal is here, and whether it’s achieving it. My guess is that it sees NFL games partly as a value-add for existing customers, and partly as a ploy to gain new subs for Prime. I’ve no doubt it will achieve the former, but the latter is a tougher sell – signing up for a Prime subscription is a lot to ask when the game is broadcast on TV.
Amazon streamed the first of its Thursday Night Football games last night, and this Mashable piece does a good job summarizing the experience for fans (I had other commitments and only tuned in very briefly). It appears the stream mostly held up bar some audio hitches, which hasn’t always been the case for new streaming video services in their debuts but should be par for the course with a provider like Amazon that already has massive streaming scale. The most noteworthy thing about the broadcast is how little innovation Amazon built around it, with the only meaningful departure from a normal broadcast being an alternative audio feed with British commentators providing color for those more familiar with a version of football where people actually use their feet. Twitter, of course, had the rights last year, and at least tried to pair the video feed with relevant tweets, an integration that offered little value at the time, but one on which Twitter has iterated since with more recent live events. By contrast, there was seemingly nothing about last night’s broadcast which felt uniquely Amazon-like, while the ads suffered from the same problem as most streaming video: too much repetition. I’m hoping Amazon was playing things reasonably safe with its first broadcast and will do more interesting things later in the season, because at this rate the NFL might as well just license the streaming rights to traditional broadcasters too.
Facebook Signs Deal with NFL for Highlight Videos (Sep 26, 2017)
Given that the live TV rights for major US sports are pretty much all sewn up for years to come, the major online platforms have been relegated to pursuing other rights, including second-tier sports (and e-sports), sports rights outside the US, and meta content including highlights and sports-centric talk shows. The latest example of that comes from Facebook, which has paid the NFL for the right to show highlights to its users immediately after games end, as well as doing a deal for NFL-created shows for its new Watch tab for video. The highlights deal kicks in immediately and the overall contract is for two years. This feels like one of the more promising deals Facebook has signed – I’m really not convinced anyone wants to watch long-form sports (like pretty much all US sports with their massive ad loads) through a social network, but highlights seem much better suited to both mobile and social contexts, because they’re very shareable and digestible in small chunks. I already regularly see highlights from various sports in my Facebook feed, but they’re almost all videos from within articles hosted off Facebook – this deal would bring the content into the platform and therefore enable monetization through advertising. As I said yesterday in the context of YouTube’s enhancements, Facebook’s video ad tools are still very rudimentary in comparison, but at least it now has ways to show ads in videos. The challenge with highlights is going to be that they’re so short and so widely available, I wonder whether anyone will want to stick around beyond the mid-roll ad break.
Yesterday, Facebook announced a deal with Stadium to provide sports video content, and today Twitter made a very similar announcement. Stadium is a recently launched sports network which leverages Sinclair’s broadcasting infrastructure and streaming capabilities from Silver Chalice (a subsidiary of the Chicago White Sox organization) and in-studio talent from 120 Sports. Its sports rights are mostly for second-tier conferences, so there won’t be many high-profile games available, and essentially all the content is also available for free on Stadium’s own website and where broadcast. So there’s no exclusivity and little real value here and this is mostly about adding tonnage of live video on two platforms which are still in the early stages of that effort. The challenge in sports, of course, continues to be that the major rights are sewn up for years by big names from the TV industry, with rare exceptions like Thursday Night Football’s digital rights offering the only real opportunities to snag them in the near term. And yet sports is about the only must-have category of live TV left among these platform’s core audiences, leaving them in this awkward position of adding lots of marginal content just to check a sports box.
Time Warner’s Turner unit, which acquired English-language US rights to the European club soccer tournaments from UEFA earlier this year, has announced that it will be launching a new steaming service next year to carry the games. A subset of the games will also be broadcast through its linear channels, but it sounds like this service will be the only way to get the full set. This is a great example of the kind of approach big TV companies should be taking with online streaming services, where we’ve seen two broad strategies be successful: recreating a linear / pay TV offering in the digital world, or creating something entirely new (Turner here is doing the latter). This should provide a very direct way to recoup the $180 million Turner is allegedly spending on three year’s rights for the soccer tournaments, while also allowing it to experiment with streaming models for sports. It sounds like it’s interested in adding other sports over time, though not the basketball content that’s already a big deal on its linear networks, and I worry that could be a distraction or dilution for what will otherwise be a very clear value proposition.
Spectrum TV, which is the brand for television services offered by the entity formed from the merger of Charter, Time Warner Cable, and Bright House Networks, is offering an over the top pay TV streaming service. So far, that probably sounds pretty me-too, but there are two important differences: firstly, the base $20 tier excludes all sports networks, and secondly, because this service is being offered by an existing pay TV provider in its franchise area, it includes the local broadcast channels. The big caveat is that the service is only available to Spectrum broadband subscribers, so this isn’t a national offering, but it’s arguably the most comprehensive set of basic channels offered by any of the streaming services, and sports and premium channels can be added at a pretty reasonable price ($12 for ESPN and others, and $15 for a premium package). I’ve long argued that the existing pay TV providers are in the best position to offer a really compelling streaming TV service, but of course they’re also the least incentivized to do so, because that means potentially cannibalizing their legacy pay TV services. As such, we’ve only seen fairly hamstrung offerings from the big satellite providers (DISH’s Sling and AT&T’s DirecTV Now). But Spectrum’s new service suggests we may finally be seeing some serious movement from the cable guys, and were Comcast to move in this direction too (something it’s been testing on a limited basis so far), I have to believe that would force the remaining telco and satellite players to get more serious about providing comprehensive streaming pay TV services.
NBCU has announced a new subscription offering for watching England’s Premier League soccer games, which will cost $50 per season when it launches in August this year. The catch is that these games were previously available online and through NBC’s apps to authenticated pay TV subscribers as an additional offering over and above the games shown on its live linear TV channels. So it is taking what used to be a perk for authenticated pay TV subs and making it a separate, $50 service, making this a bid for new revenue from dedicated soccer watchers. What that means in practice is that viewers who care about this will now need to subscribe to TV packages that include the NBCU channels and to this separate subscription if they want to watch all possible games. This is definitely part of a trend towards direct-to-consumer offerings, many of which are coming from traditional players not willing to offer full cord-cutting solutions, which means that they actually end up setting the user experience back instead of moving it forward, as in this case. The traditional TV players continue to be more interested in experimenting and dabbling with services that can provide new revenue than – to use an analogy from a different sport – skating to where the puck will be by offering truly new offerings that allow users more control. I continue to believe that there will come a tipping point when we see real innovation in giving users just what they want because the alternative is rapid decline, but we’re clearly not there yet. But it’s also notable that both Fox (through the deal announced earlier today with Facebook) and NBCU are seeking new ways to monetize their second-tier sports content which otherwise doesn’t appear on TV.
Facebook Secures TV Rights for Less Interesting Champions League Soccer Games Through Fox (Jun 27, 2017)
Facebook has been dabbling in sports rights here and there, and already has a deal for a twenty Major League Baseball games during the 2017 season. Now, it also has a deal to show some European Champions League games in the US through Fox, which owns the TV rights. The games Facebook shows will be the the lower profile ones which aren’t shown on live TV but which have been available through Fox’s streaming apps. Given that the focus is on these lower-tier games, it also has no rights to the last two rounds of the tournament, which features the top club soccer teams from throughout Europe. The article here from Bloomberg talks up the amount of social activity around soccer on Facebook, but of course the US is famously resistant to soccer, so only a fraction of the overall numbers relate to the US specifically. I certainly count myself among those who watch the Champions League here in the US, but almost exclusively the top-tier team I support, which almost certainly won’t be featured in any of the games Facebook shows. And that’s the challenge here – this deal sounds good in principle, and for any fans of relatively obscure European teams who happen to be living in the US (or who watch soccer indiscriminately regardless of the teams playing) this might be a nice value-add on Facebook. But this doesn’t seem likely to attract much bigger audiences than the MLB games on Friday nights.
Twitter already has a deal with Major League Baseball to stream some games, and now it appears Facebook has a similar arrangement. The latter will broadcast 20 Friday-night games throughout the season. Given other recent deals for major sports, including Twitter’s last year for Thursday night NFL games, that might sound like a lot, but of course there are 30 teams in the MLB, each of which plays 162 regular season games, which means that including the postseason there are nearly 2500 games in total each year, so Facebook will air less than 1% of the total. And I’m guessing Friday night games have among the lowest viewership of any games, so this feels like a low-risk proposition for MLB and an experiment at best for Facebook. For viewers, too, the chances that Facebook will be showing the one game your team is playing in any given Friday night will be slim. But this feels like a good step for Facebook as it both scales up its live broadcast offerings and feels out what the audiences will be like for sports on Facebook.
This is an interesting outcome to this bidding process, with perhaps the most interesting part being the price to be paid by Amazon, which is five times what Twitter paid for the equivalent rights last year. I had wondered if the NFL was going to let the winning broadcaster sell more of its own ads, which would have justified a higher price, but as that doesn’t seem to be the case it looks more likely that the higher price was the result of a bidding war. If I recall correctly, Twitter was said not to have been the highest bidder last time around, so it’s possible both that Amazon (and possibly others) bid more and that the NFL decided to go with the higher bidder this time. From Amazon’s perspective, the deal certainly fits with two existing initiatives: its increasing focus on TV and in particular live TV, and its slow but steady push into advertising. The big issue Amazon has with TV at this point is that its efforts are spread over two very different brands and channels, namely Twitch and Prime. At some point, the aggregation strategy that’s served its Channels business well will likely make sense in live TV too. But broadcasting live TV is a great opportunity to market Amazon hardware products to a captive video audience as well.
This is an interesting next potential step in Twitter’s push into live video. So far it’s focused on licensing video to show to all visitors (or at least all visitors in a particular country), with one of the big selling points being that users don’t have to hunt through a channel guide, authenticate themselves through a pay TV service, or jump through other hoops. What Twitter is betting on now is that users might be willing to authenticate themselves through a pay TV provider in return for the smaller benefit of watching video and related tweets in a single window, something I’m not sure users will go for. Twitter has, at least, made that tweet curation experience better in recent months, which may increase the attractiveness somewhat, but I suspect a big attraction for the other live video Twitter has shown was that it was free and painless. As anyone who’s used other TVE solutions knows, those words generally don’t apply.
Facebook, Amazon, Twitter and YouTube are bidding to stream the NFL’s Thursday night games – Recode (Mar 24, 2017)
When Twitter won these rights last time around in their first year as a separate set from television rights, it turned out to be something very different from what many of us expected. Rather than a massive splurge on a very valuable set of rights, it turned out that the winner merely got the right to show the games along with advertising mostly already sold by broadcasters, meaning there was very little additional revenue opportunity, and as such Twitter got the rights for a paltry $10 million. These NFL games have actually been a good fit with Twitter’s overall live strategy, which has mostly been focused on winning audiences rather than lots of new revenue, but it seems others are interested in taking another crack this year. It would obviously fit well with Facebook’s recent push into professionally produced live video, but also with YouTube’s recent investment in e-sports rights and with Amazon’s foray into TV bundles and Twitch video streaming. It’s less of a good fit with Apple’s current focus in the TV space, so it’s not surprising that its name doesn’t appear here. I’ll be very interested to see if the NFL is pitching the same kind of package as last time or whether the winning bidder will have the right to sell more of its own ads this time around.
E-sports are one of the few where the TV and digital rights aren’t sewn up for years to come, and so they’ve become a battleground for big digital players, with Amazon buying Twitch and YouTube now stealing one of its most high-profile, high-quality content deals. This is a big step for YouTube, which has dabbled with various bits of live sports in the past but has never had a really high-profile deal. It’s obviously not going to deliver NFL-like viewing numbers, but it’s a good test of YouTube’s commitment to live video and sports.
Pirate Soccer Streams Thrive on Facebook – El Pais (Feb 21, 2017)
There have been a couple of stories recently about Facebook finding ways to detect and either crack down on or monetize pirated music on the platform, but this analysis from Spanish newspaper El Pais demonstrates that music is far from the only thing being pirated regularly on Facebook. It appears that there are massively popular streams – the article cites a recent game between Barcelona and Real Madrid where one stream alone had 700,000 viewers – which go largely unchecked on Facebook. The key to their success is that users follow Pages which post links to streams hosted by other entities – because the aggregators themselves never infringe on any copyright, they can build big audiences and merely direct them at whatever streams are available. As Facebook gets ever more serious about video on the platform, it’s going to have to get better at detecting infringing live streams in real time, especially if it wants to win the trust of traditional broadcasters.
via El Pais (in Spanish)