By Jay Bemis | Advertising Systems Inc.
Sports fans may still be scratching their heads over this announcement last week: ESPN, Fox and Warner Brothers Discovery will launch a joint, sports-heavy streaming service later this year that will include each company’s content from sports that also appear on linear or traditional TV.
For fans who stream sports or continue to watch the old linear way (think cable, dish), it’s getting to the point where you need a program to know where your next big game will appear. And is it time for you finally to cut the cable or dish and start solely streaming?
The yet-to-be-named streaming service will be operated by its own management team, with the three networks holding one-third ownership. The service and its channels, including Fox, Disney-owned ABC and ESPN, TNT and TBS, will be available directly to consumers via a new standalone app.
Subscribers also reportedly can bundle the service with Disney+, Hulu and/or Max.
One source close to the new streaming conglomerate said Thursday that the favored name for the streaming service appears to be Hulu Sports, which would offer streaming versions of channels like Fox, ABC, ESPN, TNT and TBS.
Joe Favorito, a Columbia University sports management professor, was immediately skeptical about the new joint venture and how it might appeal to sports fans.
“I’m sure you have a lot of people just rolling your eyes saying, ‘Here comes another streaming bundle, what are we supposed to do now?’” Favorito told TheStreet.
Not rolling their eyes, perhaps, are marketers and advertisers.
For them, the joint venture means turning to another sort of program to know the players — as in programmatic advertising, the hottest seller in today’s digital advertising world.
Programmatic advertising will rake in 91.3% of this country’s digital display advertising revenues in 2024 for a total of $157.35 billion, according to a recently released eMarketer forecast.
“Programmatic advertising refers to any ad that is transacted or fulfilled via automation,” eMarketer explains, “which means technology takes on decision-making in the ad serving process and that there is no need for a manual insertion order.”
More About the ESPN-Fox-Warner Deal
Included in the joint streaming venture will be major sports such as the NFL through ESPN and Fox, and the NBA through ESPN and Turner. Other major events on tap would be the PGA Tour, the ATP and WTA pro tennis tours and auto racing.
Not part of the venture are such tech giants as Amazon and Apple, but each of them has seen early success with its own streaming platforms with media rights to the likes of NFL’s “Thursday Night Football” and Major League Soccer, respectively.
Also not included are Comcast and NBC’s Peacock, which gained a few million followers after it exclusively aired an NFL playoff game last month. Peacock can’t be too worried yet: It also has the rights to this summer’s Olympic games in Paris, which opens up plenty of 2024 programmatic ad opportunities for that streaming service.
Marketers’ and Advertisers’ Reactions a Bit Mixed
One big plus for marketers and advertisers with the new joint venture will be the platform’s focus on sports fans, which allows for more precise targeting via those programmatic ad buys.
Other marketer-advertiser benefits may include:
- Increased Ad Opportunities: With a consolidated sports streaming service, advertisers can reach a broader audience across multiple sports networks. This could lead to increased ad inventory and revenue.
- Targeted Advertising: Advertisers can tailor their messages based on specific sports interests.
- Brand Partnerships: Brands may explore partnerships with the new service to sponsor content, events or exclusive features.
“I think it’s more ‘see-where-this-is-going’ versus an amazing thing,” Columbia University’s skeptical marketing professor, Favorito, also told TheStreet.
“I think everyone’s just going to figure out when the rights deals come up if they’re in the best position to obtain those rights … you have to present yourself to the rights holders with the best possible position across the most platforms that you possibly can.”
Variety, meanwhile, says the as-yet-announced cost may be a major issue for the new streaming venture:
“The monthly pricing will need to be attractive enough to lure cord-nevers and cord-cutters — who have shunned traditional cable and satellite TV — while also ensuring Disney, Fox and WBD avoid cannibalizing their own streaming services and linear networks”
The folks at eMarketer, though, called the new venture a “game changer.”
“With streaming costs ballooning, subscription growth slowing (outside of password sharing changes), and rights deals selling for billions, streamers have been under increased pressure to partner with their rivals to offer bundles and share the burden,” eMarketer said when the joint streaming service was announced last week.
It also noted that the world of sports is one of the last remaining bastions for ad spending on linear or traditional TV — the NFL alone made up 93 of the 100 most-watched broadcasts in 2023.
“But with viewership inevitably shifting toward digital channels, a frenzy has erupted over the last two years as companies look to strike deals with sports leagues for streaming rights.”
