“Maybe Get used to it Do you have any other questions about this new sports streaming service?” — Chandler Bing as interpreted by the late Matthew Perry
Nothing grabs the media world's attention faster than the latest shiny object. Nothing shines brighter than Warner Bros. Discovery's new sports streaming bundles in recent weeks.
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Who is running the show?
One word is “governance,” but many joints in the media world, from broadcast networks' unrealized Nielsen competitors to Excite@Home, Canoe Ventures, and Hulu before Disney took control, This has become a major obstacle for venture businesses. What does the board look like? How much power does the CEO have to make decisions that are in the best interests of the partnership, which may be against the interests of all the individual partners? Will “Sports Hulu” be joined by a completely new independent staff? Will it rely on secondment from the three owners? Who deals with the professional leagues, the collegiate leagues, the distribution platforms, the advertising and marketing sponsors? Oh yeah, what's that called?
Who gets what?
Today, ESPN is a much more dominant player in the sports world than TNT, TBS, or Fox's FS1 or FS2, with subscription fees and ad revenue commensurate with its status. And not all sports rights are created equal. How do you divide the ownership and revenue pie, considering the different investments in different brands, sports rights, viewership, and brand loyalty? When a new subwoofer joins, Should we “assign” fees based on the woofer's origin and reason for registration? Breaking down the algorithm.
What's in here?
It remains to be seen which specific sports properties will be included in this bundle, and what the mix of live streaming networks and non-live sports-related programming will be. WBD CEO David Zaslav said it includes 14 linear networks owned by partners that target households without cable TV. But will cord-cutters and cord-stealers *never* get the chance to break in and get back into a large group of channels that are streamed 24/7/365? Will they also have access to ESPN and HBO's library of classic sports documentaries? Will they watch Turner's classic sports-themed films (such an idea)? What do you think of Bleacher Report? What sporting events are banned in this bundle (Super Bowl, all NFL, etc.)? Will the partners work together to create new content, or will the partners' studios and on-site production teams have full access? How will it work with (or compete with) its owner's individual streaming services, including the much-anticipated new ESPN streaming app?
How much does it cost?
Whatever the formulation, expect a lot of content and a lot of revenue from the owners of this new service. So how much does it cost consumers? NESN360, the streaming app from the owners of the Boston Red Sox and Bruins, costs $30 a month, but how many subscribers does it have? I don't understand ( saw Red Sox the last few years? ). Early indications are that the monthly fee for “Sports Hulu” will range from $40 to $50. Would even an avid sports fan pay that much for a single service? What if you already have a skinny video bundle like YouTube TV or traditional cable? Will I get it for free or at a discount? The streaming business is already seeing a growing trend of “serial churners” – people who sign up and cancel their subscriptions within a few months. I'm working on a problem. The serial churner increased from his 6% of total streaming subscribers to 22% from 2020 to 2023. How do you fight off customer churn as you switch to a sports calendar with ultra-premium pricing and a diverse fan base?
Are you all ready to rumble?
There are too many challenges here to fight one-on-one. You will need to use a lot of zone defense. To what extent are the partners inoculated against antitrust scrutiny? Given the size and importance of these media partners, and the centrality of sports to the future of free-to-air broadcasting, it is unclear what the Biden administration will do about the creation of this venture. I have to think about it. Also, if there is another President Trump, would you want to rely on his administration's support? There has already been a lawsuit from skinny bundler FuboTV, and there may be more in the future.How will outside media companies looking into Paramount react?
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