While cord cutting is in its infancy, it doesn’t mean that online media outlets are waiting for the numbers to grow. Yahoo’s first experiment into streaming was the Jacksonville Jaguars-Buffalo Bills game at Wembley Stadium in October and will now stream a free ‘MLB Game of the Day’ every day for the remainder of the baseball season as well as four NHL games per week. Twitter is also going to be bringing live sports to its platform, streaming Thursday Night Football for the 2016 season.
In our free publication “Cutting the Cord: New Age of Sports Fandom”, we noted that Cord cutting is real, and the number of people cutting the cord is likely to grow. While the overwhelming majority still continue to subscribe to cable and satellite, there is a continuing trend of people ending their subscriptions and moving to online sources, and companies are not helping themselves reverse this by increasing costs to current subscribers. However, the number of people cutting the cord slowed in 2015 according to the Leichtman Research Group:
While the losses are mounting up, there is still a large core set of subscribers fueling these companies, as 83 percent of American households still pay for television, as less than 1% of subscribers cut the cord in 2015. However, Leichtman also report that 13% of US households get broadband at home but do not subscribe to a pay-TV service.
Digital media outlets are still aiming to get ahead of the curve, experimenting with a streaming service despite the likelihood of most fans likely watching games the old-fashioned way on television. Yahoo demonstrated the potential of streaming; the Jacksonville Jaguars-Buffalo Bills game at Wembley Stadium in October exceeded all expectations – and promises to sponsors – as the 33.6 million streams far exceeded the 3.5 million that the company guaranteed to advertisers, which undoubtedly thrilled the NFL. Streaming also attracts a key demographic, as Millennials are not just the largest group of consumers in the United States, they’re also the first truly digital generation.
These streaming deals provide Twitter and Yahoo with the opportunity to experiment with new forms of advertiser integration, although at this point revenue is likely to be limited in comparison to television. However, digital media can sell targeted advertising on its platform with direct links, which could arguably provide a better investment than television. The leagues could benefit further too; while the US viewing base is expected to be smaller in comparison to television, it could help the league grow interest in the sports worldwide, which is also likely to be a better revenue driver for online advertising.
Is the era of live sports streaming upon us? The national broadcast deals for the big four sports in the United States are not up for renewal for a number of years, allowing the digital media to experiment with their platforms and the potential of online streaming. If cord cutting and the interest in streaming continues, digital media could become major players to become official broadcast partners of leagues in the future, as television networks will need to react to ensure that their broadcasts continue to attract viewers.
Our free publication “Cutting the Cord: New Age of Sports Fandom” can be downloaded here.