Live sports networks in the pay-TV world are like the anchor tenants in a shopping mall. But just as the mall has lost its luster in the Internet age, the pay-TV bundle is unraveling, and sports networks are looking for new ways to peddle their wares.
First up, Sling TV has announced a major win with the news that it will carry both the NFL Network and NFL RedZone as part of its Sling Blue over-the-top TV package. The deal includes live Thursday Night Football games as part of the $25-per-month Sling Blue service, and for only $5 more per month, customers can add on "Sports Extra" with the RedZone channel, which offers "whip-around" coverage of all Sunday NFL games. (See also Sling Updates, Color Codes TV Bundles.)
Why does this matter? Because the National Football League is slowly but surely loosening the reins on content licensing, and that means it doesn't see the value it once did from standard pay-TV distribution deals. With overall pay-TV audience numbers trending downward and audiences turning toward new and cheaper video outlets, the NFL doesn't want to get left behind.
Of course the result of partnering with new OTT distributors is that the NFL is also potentially further decreasing its value to pay-TV operator customers. It's a fine line to walk -- keeping up with new audience trends while managing not to threaten (too much) existing revenue deals.
In the other big streaming news of the week, Walt Disney Co. (NYSE: DIS) announced yesterday that it's taking a $1 billion stake in BAMTech, a spinout of MLBAM , and will use the company's technology to launch a new ESPN streaming sports service later this year. While it will fall under the auspices of ESPN, however, the new streaming service won't offer traditional ESPN sports coverage, i.e. live streaming of the most popular American sports match-ups. Disney says the new service "will feature content provided by both BAMTech and ESPN, and will include live regional, national and international sporting events."
This is a case of ESPN trying to preserve its value to the pay-TV bundle while also expanding its revenue opportunities through a new direct-to-consumer service.
In other words, ESPN, like the NFL, is hoping to keep the lucrative pay-TV bundle alive. But it's also placing big bets on the side.
— Mari Silbey, Senior Editor, Cable/Video, Light Reading