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Can Live Sports Transform The Streaming Video Wars?

The NBA, NFL and Major League Baseball are stumbling, badly, toward a resumption of games, trying to figure out how to make money in a resurgent pandemic with few or no paying fans in attendance, the same giant problem facing movie theaters and concert venues.

Meanwhile, people are cutting the cord on their traditional pay-TV packages at a record pace, and shifting their viewing to online streaming services, both subscription and ad-supported.

That shift, from cord-cutters to inveterate streamers, likely will only continue as Hollywood’s media companies shift more of their marquee programming from their traditional broadcast and cable networks to their new four-quadrant streaming services.

The problem? Differentiating based on your entertainment franchises only goes so far. Yes, having a content well brimming with The Avengers, The Office, or Stranger Things is vital, as Apple TV+ has found during the pandemic. With production halted or slowed for months, TV+ was particularly vulnerable to Bare Cupboard Syndrome.

The eight-month-old service is reportedly reconsidering its originals-only approach, buying the Tom Hanks WWII thriller Greyhound from Sony for $70 million and licensing other content from outside sources.

But all of the other services are facing similar challenges. Way too much Disney+ original programming is about, well, how great it is to be Disney. ViacomCBS is still weeks or more away from detailing exactly how it will make CBS All Access more than the Star Trek/Good Fight network.

And look at the sparse lineup of new shows on HBO Max. Other than Anna Kendrick’s winsome turn in Love Life, there’s little to grab the eye. Admittedly, HBO Max does have a rich catalog on offer, from Charlie Chaplin to Casablanca, Rick and Morty to Spirited Away, Lord of the Rings to Game of Thrones, The Big Bang Theory to South Park. Comcast’s Peacock probably faces the same problem, with too few distinctive new feathers on display when it attempts to take flight in a couple of weeks.

As the Peak TV arms race has already proven, trying to differentiate based on your library entertainment offerings is an increasingly expensive, near-zero-sum game. But what happens if the media and tech companies now brawling over an increasingly oversubscribed set of possible customers added live sports to their offerings?

That’s the question suggested by veteran industry watcher Rich Greenfield, an analyst with LightShed Partners, in a couple of recent posts.

“This feels like a once-in-a-lifetime opportunity for tech platforms to strike at the lifeblood of the legacy media business — meaning sports,” Greenfield wrote. “The most watched sport in the U.S., the NFL, is set to license its next round of media rights later this calendar year. In fact, we would not be surprised to see rights deals announced before this coming season begins in September.”

First, he suggested Apple make a run at the NFL Sunday Ticket package that AT&T’s flagging DirecTV unit has owned for years. Then Greenfield suggested that ViacomCBS will find a way to leverage CBS’ long-time rights to NFL games into its broader expansion of CBS All Access, giving the beefed-up result a crucial differentiator to make up for coming late to the four-quadrant service race.

HBO Max could become a natural home for NBA games, given that corporate cousin Turner Broadcasting has the most popular weekly telecast and broadcast team around the league’s games.

And Peacock would have debuted with sports, lots of them, had the pandemic not forced a year’s delay in the Olympics that otherwise were to open nine days after Peacock’s wide launch. Comcast had planned a thrice-daily Olympic news update on Peacock, part of around 1,000 hours of related programming there. Alas, it’s not to be, at least not yet.

Disney, of course, has chosen a very different path from its main competitors, creating three different video networks (with three different log-ins!). One of those is the sports-minded ESPN+, which almost certainly has had little worth watching the past three months besides endless, self-promoting riffs on The Last Dance, its 10-part documentary about Michael Jordan’s last season with the Chicago Bulls.

That’s probably never going to change, given Disney’s to-the-death protectiveness of its family-friendly main brand (not to mention that rocket start to subscribers for Disney+, now at 50 million worldwide). But it’s interesting to think what might have been, had ESPN content been part of the offering, instead of left to wither on its own during the lockdown.

Disney at least announced a deal this week with FuboTV, the sports-focused skinny bundle, to add several ESPN channels and other Disney cable networks to Fubo’s tiers of service. But that feels like a rehash of the carriage deals in traditional pay-TV that long made ESPN the most lucrative cash cow in cable. Nothing wrong with it, but hardly ground-breaking.

Lurking over all this, of course, is Amazon, which has been licensing a handful of NFL games each of the past few years, and will do so again this year. Would it be that big a surprise if the NFL Network ended up in Amazon Channels, alongside more games as part of Prime Video, and perhaps even Twitch.?

So Greenfield’s proposals are provocative, but nothing has yet surfaced.

Whenever sports do come to the subscription services, however, they’ll have an opportunity to create a far different, far more compelling and interactive experience than was possible in traditional broadcast or pay-TV, as laid out this week during a Mesa Alliance webinar this week featuring executives from Adobe
ADBE’s data side and from IX.co, a consulting firm that builds data-driven experiences around sports and other entertainment.

One key to getting sports ramped back up, whenever it actually happens, will be transforming that at-home experience, aid Michael Lishnevsky, ix.co’s senior director of growth strategy & consulting.

That will be particularly important over the next year or two at least, because live venues won’t be able to stuff as many fans into their stadiums as they once did. Teams and venues will be spending way more money to accommodate far fewer fans for some time to come.

That leaves the at-home experience, which will also see some changes because of the pandemic. Most notably, with the NBA resuming the 2019-2020 season on July 31, it will be overlapping with college and pro football, baseball’s shortened 60-game regular season and other sports trying to grab some bit of revenue.

“Sports will air in non-primetime slots because of the competition,” Lishnevsky said. “There will be more digital consumption than ever. You need to make sure you have attractive content that will keep people watching. Fans will expect digital immersion.”

Digital distribution will enable things like real-time data visualization of game stats, virtual “watch parties” with remote friends, and personalized experiences informed by machine learning and artificial intelligence tools. Smart speakers with intelligent agents can be used to pipe in game noise and other ambience creators, as well as play-by-play and color commentators for your favorite team.

And as more states legalize sports gambling – almost a dead certainty given the revenue shortfalls so many of them are facing in the lockdown and recession – providing game and team data, fantasy leagues and other services around gambling will become increasingly popular too, Lishnevsky said.

One of those companies trying to adapt to the new world is Neo360, which provides scrubbable, super-smooth video playback for video clips. The startup already provides playback technology to the NFL and the National Rugby League through integration with FingerWorks, the Telestrator maker.

Now Neo360 is about to debut a consumer-facing mobile app designed to improve the fan’s in-stadium viewing experience, said founder David Borish. Another possibility for the technology is as part of a broader app that provides commerce, stats, and much else for fans.

That kind of approach creates opportunities not just for the teams, leagues, and distributors, but also for brands willing to create immersive experiences, and new kinds of commerce.

“The one we’re really into is this idea of watch parties,” said IX.co’s Head of Growth Strategy TJ Iaciofano. “Fans see one thing on TV and one thing in their hands. I think you’ll see experiential commerce and TV commerce. Amazon wants to capture both at the same time, and they’re getting into the rights world with the NFL. You’re going to see traditional tech companies blur the line.”

Adobe’s VP – Media Entertainment & Sports Ehren Hozumi similarly used Amazon’s current ventures as an example of what may be coming, pointing to their stores where a customer grabs groceries, walks out and is automatically debited the price of the goods from their Amazon account.

Sports teams need to figure out similar hyper-personalized technologies, both in their physical homes and with their at-home fans, Hozumi said.

“The concept of personalization is a very real trend,” said Hozumi. “Ensuring the relevancy exists has become super critical. How do you rethink your organizational structure to support that? It’s a monumental shift for the media and entertainment industry. Controlling that narrative will be essential as we adapt to the new world.”

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