With the Phoenix Suns out of the playoffs, it just seems like a good time to take a step back…
There’s no question that change is happening in the way we consume television. It’s fair to say that the preponderance of change has impacted the ‘other’ genres of programming more than its impacted live sports. As more change becomes inevitable, we’ll look at how these viewership trends may impact local teams, their sponsors and more importantly, their fans.
Livestreaming of a sporting event is not new. Today, you can see every major team in the valley in digital splendor. What’s interesting to consider is what the future holds as satellite, cable and antennas become less and less relevant delivery platforms. What happens when historical revenue providers are disrupted and potentially replaced by companies like Amazon, Facebook and Google?
To me, this whole thing is good news for most everyone involved … except for cable and satellite companies.
Cable may be able to keep their heads above water by being an Internet provider, a key component to streaming video. Cable, Dish and DirecTV can’t be overly enthusiastic to the consumer’s desire to not pay for stations they don’t watch. As digital platforms provide consumers with customization, traditional providers and their $200 monthly fees are going to take a hit.
Content providers (think Fox Sports and ESPN) will be wise to negotiate robust carriage deals with technology companies that are getting into the game, so to speak. Both have seen this coming and both have invested heavily to be ahead of the curve when it comes to livestreaming. Where it gets tricky is if livestreaming sources don’t keep pace with the cushy per sub revenue model that creates profit for cable networks. You see … networks like ESPN charge carriers like Cox money for every person that has cable service (they do the same with Dish/Direct). That provides a ton of revenue to the provider helping to fund rights deals, travel costs and talent fees. If digital entities like Amazon and Twitter are going to carry games that ESPN produces there will be a charge for that. Customizable programming options mean less money for everyone in the food chain. Make sense?
But wait Ed … you said this was good news?
It is and here’s why. Digital platforms will provide a more robust, versatile and tangible platform for sponsorship sales. What I mean here is livestreaming will lend itself to advanced ad delivery meaning I will see ads about Jeeps, fishing and beer while your girlfriend will see ads about Hondas, white wine and yoga pants. Advertisers will not only know how many people saw their ad, they will know how many people actually converted to seek further information or make a purchase. This is why I own Amazon stock by the way.
That, my friends, is HUGE in the advertising business and the sooner more people turn their TVs into oversized computer monitors the sooner you will see people in my business smile uncomfortably for extended periods of time. Sponsors will get efficient ad delivery and the wonderful tangibility that comes with digital content delivery. Before I wake from this wonderful dream let’s not forget the fan who can now readily time shift, interact socially or even have real-time stats at his or her fingertips while watching a game. That increased engagement is good for the teams, the league and the fans. It will make watching television more like doing television (if you are into that kind of thing).
I think that live sports will be the last domino to fall in the wild world of digital television. We already seek our non-sports entertainment options to be readily available to us when, where and how we want it. Sports are already down the road and nothing will keep this from happening. I’m all aboard for this one and you should be too unless of course, you work for a satellite company.
I welcome your thoughts on this. Shoot me a note at email@example.com.