Livestreaming sports content is already abundant but in the near future, three huge media companies—CBS, Disney-owned ESPN and Turner (which could soon be owned by AT&T)—will go head-to-head with separate services.
ESPN’s plans have been in the works for some time but last week, Disney announced an expansion of its intents, including a $1.58 billion deal for a majority stake in BAMTech. CBS last week unveiled its plans for a sports streaming network to be launched later this year. Now this week, Turner has announced plans for its own sports streaming service to house its recently won UEFA soccer rights.
The market likely has room for each to operate and there could be some potential for consumers who opt for more than one of these upcoming services. But there’s also a chance that each service will be fighting for the same subscribers, which is certainly the more fun scenario to consider. So let’s take a look at how they stack up against each other.
CBS 24/7 sports streaming channel
CBS’s recently announced sports streaming channel will launch later this year and like CBSN, the company’s streaming news network, it will be offered as part of CBS All Access, which sells for $6 per month or $10 per month (commercial free).
CBS management did not get into specifics about what types of programming would be featured on its sports streaming channel, but CEO Les Moonves did note all the sports distribution deals CBS has in place.
“We have deals with the NFL, the NCAA, FCC football, PGA Tour Golf, lots of different areas. In addition, it's in the very preliminary stages of formation. But CBS is a big player in the sports world. We are going to look to differentiate ourselves from the ESPN and the Fox Sports as well, and we think we have a good opportunity to succeed,” said Moonves, adding that the infrastructure already in place for CBSN will keep launch costs down for the sports channel.
“So the chances of profitability early on are very good.”
So CBS’s sports streaming service comes down to being a value add for All Access—a relatively inexpensive one at that—which could help push All Access toward its 4 million subscribers by 2020.
In CBS CFO Joe Ianniello’s opinion, that subscriber guidance may be looking too conservative now. But as Barclays analyst Kannan Venkateshwar pointed out, it could be a while before margins improve.
“The company’s new guidance on digital subs appears to confirm this trajectory. However, the margin profile of this business is likely to be accretive only over time instead of upfront, which could explain some of the near-term margin pressure at Entertainment,” wrote Venkateshwar in a research note.
Odds it will succeed: Considering CBS’s sports streaming service is being attached to All Access, which is already on a fairly strong growth trajectory, the odds that this new service will stick around and at least drive incremental subscriber and/or ad revenue growth are high. Given all the nonsports content on All Access, the service also stands a good chance of being paired with other more sports-heavy services like ESPN and Turner in makeshift cord-cutter bundles.
ESPN’s direct-to-consumer streaming service
ESPN’s standalone streaming service has been a talking point for Disney management for quite some time now, but last week the company finally started to color in some of the details.
Disney said the service, which will launch in 2018, will feature 10,000 live regional, national and international games and events per year from leagues including Major League Baseball, the National Hockey League, Major League Soccer, Grand Slam tennis and college sports. The company plans to offer the service through an updated version of the current ESPN app that also allows access to live sports via pay TV account authentication.
With ESPN and other Disney cable nets struggling to hold onto subscribers, the ESPN streaming service—along with the Disney-branded streaming service the company announced last week—is likely designed to counteract the exodus. But these services will likely need years to start righting the ship.
“DIS saw another increase in the rate of sub losses in F3Q to 350bps vs. ~300bps in F2Q (~2% in F1Q), with cable net affiliate fee growth at ~1% in the qtr. Tonight's DTC offerings are a response to the deteriorating sub trends—but should take time to have an impact,” wrote Jefferies analyst John Janedis in a research note.
Odds it will succeed: The biggest sink-or-swim factor for the ESPN streaming service will be cost.
“I think it will really depend on the price point. If it’s priced fairly low, I could see a lot of people hanging onto it all year,” said independent analyst Alan Wolk, adding that at around $5 per month, some fans might stick with the service even if their favorite sports or teams aren’t currently active.
“But at $15 per month, you’ll see a lot of churn,” said Wolk, adding that not having the NFL and the NBA will make it a tougher sell.
Turner’s direct-to-consumer streaming service
Turner this week announced plans to launch a standalone sports streaming service to house some of the UEFA soccer rights it outbid NBC and Fox for earlier this year.
Turner’s new service, launching in 2018, will show more than 340 UEFA matches per season across its television and digital platforms, per Turner’s new three-year deal starting with the UEFA 2018-2019 season. In addition to the new streaming service, Turner will use Bleacher Report as a “portal to the OTT service and the live UEFA matches offered through the new platform.” Bleacher Report will also show year-long UEFA clips and original content. Per the deal, Turner will also show live matches across TBS, TNT and truTV.
For now, Turner is treating UEFA as the “core pillar”—and only pillar—for the service, though it will likely build on it in the future. But UEFA does draw a significant audience. Fox said across its network and Fox Deportes earlier this year, the UEFA Champions League Final pulled in 3 million total viewers.
“We believe UEFA provides us a great foundation to launch our new OTT sports product. We’ll look to add additional content as we lead up to the launch next year,” a Turner spokesperson told FierceBroadcasting.
Odds it will succeed: Though Turner’s success with the new service is also dependent on pricing, the programmer has hedged its OTT bet by spreading its UEFA rights across multiple platforms, including popular cable networks like TBS and TNT. By doing this, Turner has taken some of the pressure off its sports streaming service launch and enabled lots of cross-promotion on traditional cable and digital platforms.
Plus, Turner has already launched a number of streaming services including FilmStruck and Boomerang—and its parent company Time Warner is responsible for SVOD giant HBO Now—so Turner certainly has the pedigree to get another streaming service up and running. —Ben | @fiercebrdcstng