The Fighting Irish, one of America’s most popular college football teams, instead played on Peacock, Comcast’s streaming service. It was the first time a Notre Dame football game aired exclusively on a streaming platform.
Football fans will see other Notre Dame games on traditional TV this season, but Saturday’s game could be a glimpse into the future. Media companies are adding more live sports to online streaming apps, racking up subscriptions but further unraveling the pay-TV bundle, analysts said. That’s giving cord-cutters access to bigger sports events but fragmenting those games across a growing number of streaming services.
“Sports has been the last bastion of live TV, but we’re definitely seeing that starting to change slowly,” said Geetha Ranganathan, a Bloomberg analyst. “Over time we are going to see more and more sports make their way to streaming.”
Philadelphia-based Comcast is hardly alone. Consumers will need Amazon Prime Video to watch the NFL’s Thursday Night Football next year unless they live in local markets where the teams are based. Disney’s ESPN+ plans to carry 1,000 NHL games this season, and 75 will be exclusive to ESPN+ and Hulu. ViacomCBS’s Paramount+ will offer March Madness and the Masters, though not exclusively.
Streaming services have raced to gain subscribers by bulking up their content offerings, mostly with vast libraries of on-demand movies and shows. Now, media companies are experimenting with more live sports, with plans to stream games that simultaneously air on TV, or in some cases put events exclusively on their apps. The strategy could help reach a younger audience already accustomed to streaming, while persuading traditional TV watchers to download the apps.
“We see streaming and the utilization of Peacock as totally additive and just making sports and our portrayal of sports more powerful and reaching a broader audience,” said NBC Sports Group chairman Pete Bevacqua.
To be sure, fans have been able to stream some sports for years, from international soccer to out-of-market MLB games. And legacy media companies are perhaps a decade away, if not more, from streaming most of their highest-rated events at the expense of pay-TV, analysts said. Broadcast rights with the major sports leagues are too expensive to take off TV, which still reaches tens of millions of homes. There are existing broadcast rights deals that limit streaming, too.
“I think we do eventually get to a space or a time when it’s cannibalistic,” said Naveen Sarma, senior director at S&P Global. “I think it’s going to be a lot slower than everyone thinks.”
For now, media companies consider sports streaming a complement to their traditional TV offerings, Sarma said. But a tipping point could come when ESPN+, which has acquired streaming rights for a wide range of sports, garners enough subscribers that it no longer makes sense for the ESPN TV channel to be the exclusive home of NFL’s Monday Night Football, he added.
“Showing the power of sports on Peacock is certainly a key part of our strategy,” said Bevacqua, the NBC Sports Group chairman. “But in no way is it meant to minimize the importance of our key sports properties at places like NBC, on USA, on the Golf Channel. All that continues to be of the utmost importance.”
A recent decision by Comcast’s NBC showcases the balancing act. NBC made headlines in July when it decided to put the U.S. men’s basketball semifinal against Australia behind Peacock’s premium paywall during the Tokyo Olympics. That likely boosted sign-ups for the streaming service, which Comcast launched last year and heavily promoted during the Summer Games.
But the move angered some sports fans, who missed the games or paid the $4.99 per month for Peacock Premium. Some viewers also complained that it was too confusing to find Olympic events across NBC’s TV channels and streaming apps. New York Post columnist Mike Vaccaro called it “stunning” for NBC not to air the early men’s basketball games on broadcast television.
“This isn’t team handball, after all (all due respect to team handball),” Vaccaro wrote.
Bevacqua said NBC knows decisions to put games on Peacock won’t please everyone. But “we have to pivot the business to stay ahead and to move forward. And just as the industry is changing, we need to change,” he added.
The push to add sports to streaming comes as consumers flee pay-TV. About six million customers cut traditional TV plans in 2020, according to the New York research firm MoffettNathanson. About 60% of occupied U.S. households paid TV subscriptions at the end of 2020, the lowest level in nearly 30 years.
At the same time, consumers are spending more money on streaming. U.S. consumers are expected to spend nearly $50 billion on new video subscription services this year, according to Boston-based Strategy Analytics. That is expected to rise to $76 billion in 2024, when the firm predicts that spending will surpass legacy TV.
A decade of cord-cutting has put the sports media ecosystem under strain, said analyst Craig Moffett, of MoffettNathanson. Moffett noted that ratings for the Summer Olympics fell 40% from 2016. COVID-19 and Tokyo’s time zone certainly didn’t help, but it would be “wishful thinking” to suggest fixing these issues would have made the Olympics a success, he said.
“The real problem here is the Olympics are a made-for-TV event, and we’re in a post-TV world,” Moffett said.
At the same time, the Summer Games were the most streamed Olympics in history, with fans consuming 5.6 billion minutes of content online, NBC reported. Peacock had 54 million sign-ups as of July, up from around 42 million in April. During an earnings call, Comcast CEO Brian Roberts credited the Olympics in part for driving sign-ups. And even with its lower TV ratings, the Olympics still dominated the media landscape for 17 straight days, Bevacqua said.
Many consumers ditched pay-TV to save money with cheaper online streaming. But sports fans may soon find they need to pay for a growing number of streaming apps — at higher prices — to get the games they want. International soccer fans are already experiencing this, as streaming services divvied up the rights for soccer leagues, said Patrick Crakes, a former Fox Sports executive and principal at Crakes Media Consulting.
“What’s happened is, there’s so much of it that you have to have probably three or four streaming services, plus a pay-TV bundle to get everything,” he said. “They’re paying more than they’ve ever paid.”