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Live Sports Are the Next Great Battle of the Streaming Wars

Sports were initially limited on streaming services due to technological and financial constraints. But as league licensing deals expire, megacorporations consolidate, and video quality improves, a new front has opened up on the streaming battlefield.

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Over its short but impactful life span, the streaming era has largely defined itself in opposition to live viewing. Netflix’s once-radical binge model became ubiquitous, all but invalidating now-dated concepts like time slots or complementary lineups. Even the few series that still air weekly and dominate cultural conversation in real time—HBO’s Insecure or Disney+’s WandaVision—entertain audiences days after episode releases via on-demand streaming services. But for the most part, besides breaking news, consumers still insist on watching one form of content live: sports. For reasons both technical and financial, streaming has largely eschewed sports, leaving a very notable gap in an ecosystem that’s otherwise come to dominate contemporary media.

“Sports [are] kind of the last bastion of the linear television model,” says Geetha Ranganathan, a media analyst at Bloomberg Intelligence. But as the Streaming Wars gear up in earnest, there are signs that model is finally starting to break down.

Last month, the relatively dry business of NFL TV rights made headlines for one specific reason: Amazon had secured exclusive rights to 15 Thursday Night Football games as part of its Prime Video service for the next decade, starting with the 2023 season. The e-commerce company had previously acquired streaming rights for Thursday games in 2017, so it wasn’t exactly unprecedented. But now, there’s one crucial difference: Amazon will be the sole destination for Thursday games as opposed to one option among many, a privilege for which it’s paid accordingly. The 2017 deal was valued at $50 million for one year; reports put this latest pact at closer to $1 billion annually, or $10 billion total.

The week before, ESPN and the NHL announced an agreement that, while less dramatic in its broad strokes than the deal between Amazon and the NFL, may be equally portentous. Not only will hockey return to ESPN for at least seven years beginning this season after a 16-year break, but 75 regular-season games per year will stream exclusively on ESPN+ and Hulu—both of which are owned by Disney. ESPN+ will also absorb the NHL-owned NHL.TV altogether, fortifying a streaming portfolio that already includes Hulu and the more family-friendly, IP-driven Disney+. “Streaming is really at the heart of this deal,” ESPN president Jimmy Pitaro told The New York Times.

The Amazon and ESPN deals followed the launch of two new streaming services that made sports a part of their pitch to consumers from the get-go, a notable departure from earlier players like Netflix or Hulu. Peacock, owned by NBCUniversal, was initially planned to launch in tandem with the 2020 Olympics. While the games have since been delayed, the overall strategy remains in place: Peacock is stocked with Premier League soccer games, acquired the WWE Network streaming service in early 2021 in a corollary to the NHL-ESPN arrangement, and is set to absorb much of the programming from NBCSN, the cable channel scheduled to wind down at the end of the year.

March also saw the debut of Paramount+, a sort of souped-up successor to CBS All Access overseen by the freshly re-merged ViacomCBS. “Live sports is at the core of what the value proposition is for the service,” says Jeff Gerttula, the executive vice president and general manager of CBS Sports Digital. Like All Access before it, Paramount+ allows subscribers to tune in to sports broadcasts also shown on CBS proper, including the NFL and the NCAA. Like Peacock, Paramount+ heavily features soccer, particularly the UEFA Champions League, as well as the National Women’s Soccer League and other international offerings like CONCACAF World Cup qualifying matches. And while Peacock and Paramount+ are relative newcomers, they’re both owned by larger media conglomerates and join existing sports-focused services like FuboTV and ESPN+.

Tennessee Titans v Jacksonville Jaguars Photo by James Gilbert/Getty Images

On their face, these developments appear to signal a sea change in the streaming landscape—a rupture in the firewall that’s long kept traditional broadcast at least partly safe from the encroaching threat of streaming upstarts. “If sports were not on TV, people would have cut the cord in a lot bigger numbers a long time ago,” says Dan Rayburn, a principal analyst of digital media at Frost & Sullivan.

And as more rights come up for grabs in the coming years, the upheaval is only set to continue: The NBA’s current deal runs through the 2024-25 season; after recent renewals with Fox and Turner Sports, MLB is still in negotiations with ESPN, potentially for a smaller agreement that could leave more rights on the table; and the NFL Sunday Ticket package long held by DirecTV will be up for grabs at the end of the 2022 season. Once the dust settles, how much of sports will have migrated with the rest of entertainment? And just how much of a trump card are live sports in the ongoing battle for streaming supremacy?

While the specifics of this realignment are new, the general concept of new outlets using sports as a leg up in their search for an audience is not. “There’s a reason why, if you go back over the past 40 years, most new entertainment platforms have been built on enormous sports rights,” says Matthew Ball, a venture capitalist and the former head of global strategy for Amazon Studios. “In a macro sense, any company that has ambitions to build a platform looks to sports rights.” Back in the early 1990s, then-upstart Fox went toe-to-toe with CBS, ABC, and NBC—the so-called Big Three—to purchase 10 figures’ worth of NFL rights, thereby fast-tracking Fox to the top of the broadcasting food chain. DirecTV’s days with the Sunday Ticket may be numbered, but it was once so instrumental to the company’s success that it was a key condition of AT&T purchasing the provider in 2014.

Streaming is no different: a crowded and lucrative marketplace where new players, even ones backed by massive corporations, have to jostle their way in, and established presences have to actively maintain their edge. Given that Netflix and its peers have largely focused on building up an alternative to live viewing rather than breaking into the market themselves, that leaves an obvious vacuum for younger services to fill. “If you look at every new streaming service that comes out, it’s essentially a copycat,” says Ranganathan. “After a point, the consumer almost becomes indifferent. [Services need] some kind of a differentiating factor.” For Peacock and Paramount+, that factor is sports. Each follows in the footsteps of services like FuboTV, which launched as a soccer-centric streamer in 2015 before broadening its focus two years later. (ViacomCBS owns an undisclosed stake in FuboTV, purchased by a pre-merger Viacom in 2019.)

Sports aren’t helpful for just attracting attention but proving value in exchange for a portion of households’ finite entertainment budget. “You’re not paying a $200 cable bill and another $100 on streaming if you make $4,000 a month,” says Michael Pachter, an analyst with Wedbush Securities. “People are going to have to choose. These different services are trying to say, ‘Here’s why you should look at us.’” With so many services coming online within the past year and a half alone, we’re at the point where most consumers can’t afford to be completists and cater their media diets accordingly.

Liverpool FC v Real Madrid - UEFA Champions League Quarter Final: Leg Two Photo by Shaun Botterill/Getty Images

Just how sports—and which ones—can work as a selling point varies from service to service. With its live CBS feed, CBS All Access already had a sports component, with major events like the Super Bowl working as what Gerttula calls an “acquisition vehicle” for new subscribers. For Paramount+, soccer became a more specific focus on account of its American audience. “It was young and it was diverse, and it was an audience that was accustomed to streaming,” Gerttula explains. (Soccer rights are also less restricted than those of the major American leagues, which typically include regional restrictions around teams’ home markets.) But just because a group is used to streaming doesn’t mean it will appreciate adding yet another subscription to keep track of: “We understood when we got Champions League that we’d probably be viewed as a nuisance,” Gerttula says. “Ultimately, we thought [fans would] come around.”

For Amazon, a similar logic applies at a much larger scale. “The sports landscape is fragmented, confusing, [and] often expensive for customers,” says Amazon vice president for global sports video Marie Donoghue, echoing Gerttula’s acknowledgment that a tangle of fractured rights can be frustrating on the viewer’s end. On the other hand, “we think adding NFL content to Prime Video is an immediate differentiator for us as a service.” For a company like Amazon, the appeal of the NFL is obvious. Football is the most popular and widely viewed sport in America, with the hefty price tag to match; on a similar wavelength, the company also struck a three-season deal with the Premier League—the most-watched sports league on the planet—in 2019 for a portion of live broadcast rights in the U.K. But if you’re a retail giant with the cash to spend, it’s also a feasible splurge.

Even as the status quo of sports and streaming shifts in significant ways, there are also real limits to how much it can change and how quickly. One of those limits is the flip side of Amazon muscling its way to becoming a major NFL partner in just a few years: There just aren’t that many entities of similar size left that aren’t already in the game. “How many companies are out there, like Amazon, willing to drop billions of dollars to get rights to stream content?” Rayburn asks. “Who has enough money to actually compete with the broadcast networks? There’s literally a handful of companies, and that’s it.”

Not all of those companies have elected to put their hats in the ring, at least for the moment. HBO Max shares the same parent company with sports hubs like TNT, but WarnerMedia CEO Jason Kilar has said there are no immediate plans to incorporate live sports into the service. And while Apple sparked some speculation by hiring an Amazon sports executive last year, it hasn’t announced its intentions as of yet. That leaves conventional linear TV—i.e., all the other broadcast partners in the recent NFL renewal, which will remain in place for 10 full years.

Plenty of broadcast networks now have affiliated streaming services of their own, a family tree that comes with its own set of challenges. Putting resources into streaming is a way to stem the tide from cord-cutting; it’s also a way to make streaming so enticing it only incentivizes the exodus from traditional pay TV. “They’re trying to walk a tightrope and balance their conventional revenue stream, which is retransmission fees from cable, against the opportunity to sell streaming services,” Pachter says of companies like NBCUniversal or ViacomCBS. Sports aren’t the only factor in this balancing act of old and new media—see WarnerMedia’s decision to put its entire 2021 theatrical slate on HBO Max and the ensuing fallout—but given their role as broadcast’s biggest remaining stronghold, they’re a significant one.

“I think of it more as a complement,” Gerttula says. “Each platform has its own business model, its own underlying economics, and that drives the decisions we make about what goes where.” It’s still too early to tell just how much streaming services could chip away at their own parent companies’ key selling points, but as rights continue to loosen up, the question will only become more pressing. “Even with the NFL, while the TV networks still remain the mainstay, they’ve been really careful to see that they’ve got as much flexibility as possible in terms of having rights to simulcast on all their streaming platforms,” Ranganathan says. “I think that’s exactly what we’re going to see with the NBA, with the MLB.”

But the more immediate challenge to putting sports on streaming is a technical one. “One thing that’s important to understand is the internet was not designed for real-time bandwidth,” Ball says. “The internet is designed to deliver data reliably, not as quickly as possible.” That’s in contrast with the coaxial cable system that delivers much of broadcast TV, which isn’t affected by factors like congestion (too many people crowding a connection) or latency (the lag time between when an image is captured and when it’s broadcast to the viewer). A few seconds of latency may not matter when watching the latest season of a scripted drama, but it’s all-important when tuning in to, or even betting on, a game.

FBL-ITA-SERIEA-JUVENTUS-GENOA Photo by MARCO BERTORELLO/AFP via Getty Images

It isn’t impossible to overcome issues like latency—just very, very expensive. “It’s not easy,” Donoghue says of Amazon’s efforts. “It’s something we take very seriously, and we have invested both in terms of resources and expertise to ensure we give the best experience to our fans.” As Amazon prepares to take on Thursday Night Football and its sizable audience, quality control remains an object of interest, both for fans and leagues conscious of their own reputations. In the meantime, latency remains one of the bigger stumbling blocks in the way of a future where a Super Bowl–level event could live on the internet and only the internet.

Like the rest of the media, sports is intensely fragmented, making it hard to locate a single inflection point. But the recent launch of new platforms and expansion of older ones seems to indicate that sports are now a meaningful part of the streaming conversation rather than a steadfast exception to it. In a way, it’s one more piece of evidence that “streaming” is no longer a separate category from the rest of entertainment in the first place. When the exceptions start to dwindle, it only leaves the rule.

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