NBC, Rio, And the Long-Term Value of Televised Sports

NBC’s Olympic efforts in Rio are falling short of its previous best. Through the first 10 days of the games, the broadcaster’s prime time coverage has averaged 27.8 million viewers, according to Nielsen. That’s more than enough to trounce CBS, ABC, and Fox, but it’s down 17 percent from NBC’s coverage of the 2012 games in London, despite a more favorable time zone that allowed for high-profile events where American’s typically excel, like swimming, to be shown live in prime time.

usain_bolt_smileThe fall off among viewers 18-34 has been even steeper, down 25 percent from London.

NBC execs are quick to point out that the ratings for its prime time coverage on its broadcast channel don’t tell the whole story. NBC Universal is showcasing the games live across its entire suite of cable networks throughout the day, some of which have drawn strong ratings in their own right. The final of the men’s golf competition, shown live on NBCU’s Golf Channel on Sunday, delivered the second highest ratings for any 90 minutes of televised golf this year after the final round of the Masters, despite the absence of many high-profile players. Between noon ET when it started, and 3:10 p.m. when it ended, the competition earned the highest household rating (1.02, with 1.6 million viewers) since Tiger Woods and Phil Mickelson went head to head at Pebble Beach in 2012. Go figure.

NBC also points to record-breaking digital viewership of this year’s games. Through Aug. 14th, NBC had delivered 1.86 billion live-streaming minutes, besting the total from the last three Olympics combined by more than 25 percent. NBC is live-streaming all the events in Rio as well as simulcasting it’s prime time coverage. Read More »

How Twitter Beat Out Rivals For NFL Deal

Twitter this week landed streaming rights to a 10-game package of Thursday Night Football games next season for a surprisingly modest $10 million, edging out rival bids from Verizon, Amazon and Yahoo, at least one of which reportedly came in 50 percent higher than Twitter’s offer. Another rival, Facebook, reportedly dropped out of the bidding last week over objections to the advertising framework imposed on the deal by the NFL.

Twitter, in fact, will get minimal advertising rights as part of the deal. As a technical matter, it will be rebroadcasting the CBS and NBC feeds of the nfl_gamegames, which the networks will also be streaming over their own, authenticated TV Everywhere platforms as part of their $450 million deal to broadcast the games, and the networks will be handling the bulk of the ad sales for both broadcast and digital channels. Twitter will get a little bit of inventory around the margins to sell, plus some pre-game, player-created spots on Periscope. The deal is basically a $10 million brand-building exercise for micro-blogging and live streaming platform.

The games, in fact, will be available for free, without authentication, both on Twitter’s own platform and across its entire, syndicated global footprint.

That last point was obviously critical for the NFL, which has been working feverishly to expand its audience outside the U.S. and sees streaming as a way to reach potential fans in territories where broadcast rights would be a tough sell. Read More »

The Bills, Jaguars And Peak-NFL

Given how little good news Yahoo has had to share with investors lately it’s no surprise that the company is trumpeting the results of Sunday’s first-ever globally live-streamed regular season NFL game, between the Buffalo Bills and Jacksonville Jaguars, which attracted 15.2 million unique viewers and 33.6 million total views. Those numbers make it one of the biggest live-streamed events to date, and compare favorably with the TV audience for  a typically Thursday night or Monday night regular season game, according to the NFL.

“We’re thrilled with the results of our initial step distributing an NFL game to a worldwide audience and with the work of our partner, Yahoo,” NFL senior VP of media strategy, business development and sales,Hans Schroder said in a statement. “We are incredibly excited by the fact that jaguars-billswe took a game that would have been viewed by a relatively limited television audience in the United States and by distributing it digitally were able to attract a global audience of over 15 million viewers.”

Yet as others have pointed out, the reported numbers don’t tell the whole story. Yahoo had to resort to some trick plays to score some of those points, like putting a muted auto-play video of the game on the home pages of several of its properties, which means your Aunt Minnie, who has never watched an NFL game in her life but uses Yahoo as her personal home page, is somewhere in that 15 million. The comparison with broadcast TV viewership is also overstated. As Brian Stetler of CNN pointed out, the 460 million total minutes of football Yahoo claims to have streamed, over the course of a 195-minute game, implies an average of just 2.36 million concurrent viewers, the streaming metric most comparable to TV ratings. Read More »

The Co-Dependent Marriage Of TV and Sports

According to a report released this week by PriceWaterhouseCooper, the revenue earned from media rights by the North American sports industry will surpass the revenue earned at the gate by 2018, when they’ll reach $19.95 billion and $19.72 billion, respectively, fulfilling the old adage that the sports business is really the TV business.

Increasingly, the reverse is also true: The TV business is really the sports business.

More than a third of all TV advertising in the U.S. today goes to live sports, and that doesn’t include ESPN, which shows a mix of live sports and sports-related programming. Add in ESPN and the share of advertising going to sport programming would top 40 percent, Advancit Capital partner and former Fox Digital president Jonathan Miller estimated from the stage at the New York Media Festival earlier this month. Franklin_Gutierrez_hitting_HRAt the same time, according to SNL Kagan, sports networks account for nearly 20 percent of the carriage fees paid by cable and satellite operators, and that doesn’t count the portion of the carriage and retransmission fees paid to broadcasters and general-interest cable networks that can be attributed to the sports programming they carry. According to an analysis last year by MoffettNathanson analyst Michael Nathanson, the aggregate of sports rights account for as much as 50 percent of the cost of the average cable bill. Read More »

Cracking The OTT Ice On Live Local Sports

What a difference a spin-off makes. Barely a week after Major League Baseball’s 30 team owners approved the spin-off of BAM Tech, the streaming technology arm of MLB Advanced Media, reports surfaced that the league is drafting deal papers with Fox Sports to extend authenticated in-market streaming rights to Fox’s 15 regional sports networks (RSNs) beginning with the 2016 season.

Like most major sports leagues, MLB controls streaming rights for all of its teams’ games and game-related content. The league sells a high-end package of out-of-market games through MLB.com, but only the Toronto Blue Jays currently offer in-market streaming. The league and U.S. RSNs, led by Fox, have been negotiating Franklin_Gutierrez_hitting_HRover in-market streaming rights for years, but the league’s insistence that all streams be hosted by MLBAM –officially to ensure stream quality — has long been a roadblock to any deal because it would require Fox’s pay-TV affiliates to share subscriber information with the league during the authentication process. Under the deal now being finalized, according to the reports, Fox will handle authentication and fans will be able to access the games through their local RSN’s website, via the FoxSportsGo app, or through their service provider’s TV Everywhere app.

As part of the deal, Fox will still be required to use BAM Tech as its primary streaming technology vendor, and to pay a rights fee to MLB equal to around 4 percent of the team’s overall media deal. Read More »

ESPN Gets Caught In Transition

Back in October, ESPN, along with Turner Sports, renewed its broadcast and digital rights deal with the National Basketball Association through 2025 for $2.3 billion, more than twice the price of the previous deal, even though the old deal still had two years to run.

With prices skyrocketing for sports rights and new 24-hour sports competitors from Fox and NBCUniversal circling hungrily for deals that would put them in the game, locking up the NBA for another decade — even at twice the price — seemed to pencil out at the time. It was the last such major deal ESPN would need to nba_espnnegotiate for several years, having recently locked up long-term deals with Major League Baseball, the NFL, the college football playoffs and four of five major college sports conferences, thus putting a cap on its major cost-driver until at least 2021.

”We believe at the end of the deal it will feel inexpensive,” ESPN president John Skipper said at the time. ”It’s hard to imagine.”

After this week, it’s even harder to imagine.

As with any asset, locking in a price when prices are rising is a good strategy. Locking in a price when returns are falling, not so much. And for ESPN, the return on pricey sports rights are starting to fall. Read More »

Live Sports Could Force Adoption of New Streaming Protocols

This post originally appeared in M&E Daily.

For the Sochi Winter Olympics in 2014, Akamai delivered 7 Terabits per second of streaming video, an eight-fold increase over the 2010 Olympics. That was on top of Akamai’s normal daily volume at the time of around 20 Tbs.

For the 2016 Summer Olympics in Rio, Akamai’s Media Products Division senior VP and GM Bill Wheaton told the 2nd Screen Sports Summit in New York last week, server_rackthe CDN expects to deliver 7 Tbs in the U.S. alone. Worldwide volume, Wheaton estimated, could reach 25 to 30 Tbs., on top of Akamai’s normal daily load of 32 to 34 Tbs.

By 2020, if current projections hold, the Olympics could generate 1,000 times today’s level of demand for video, Wheaton said, or roughly 25,000 Tbs of data. Other global sporting events, like the FIFA World Cup could generate similar levels of demand, as consumers around the world increasingly turn to the internet, particularly with mobile devices, for watching live sports.

As demand increases, so too do consumers’ expectations of quality.

“With television, it doesn’t buffer, it starts quickly, it’s always on, it always works. That doesn’t happen today on the internet,” Wheaton said But expectations are changing. “People are paying real money for this, they expect it to work.” he said. Read More »

The Unknown Unknowns Of Buying Sports Rights

The process of deciding whether to greenlight a movie in Hollywood involves a lot of variables and input from multiple studio divisions, but the math is pretty straightforward: Each distribution unit — domestic theatrical, international, home entertainment, TV, etc. — is asked to estimate how much revenue it could deliver based on the “elements” attached to the proposed film (script, director, stars), the genre, the proposed timing of its release, competing projects at other studios, and other such factors.  Each division, in turn, has its own methodology for arriving at its estimate, based on the track records of the stars/director/etc., the performance of “comparable” recent films, and so forth.

march_madness_tbs_cbsThose projections are then weighed against the project’s proposed budget and projected marketing costs, allowances are made for non-quantifiable variables (star relationships, etc.), and a reasonably well-informed gut call gets made.

The process of approving franchise sequels is even more straightforward since many of the numbers are hard-coded before there’s even a script. The movies may still flop, due to creative failures, marketing miscalculations or shifts in the zeitgeist, but at least the people making the call know what they can’t know.

Compare that with the challenge facing TV sports rights buyers. Speaking at the Second Screen Society’s Sports Summit in New York this week, executives from two of the biggest buyers of sports rights — CBS and Turner — highlighted the growing number of unknown unknowns facing sports buyers. Read More »

Bad Sports: ESPN Sues Verizon

No U.S. television network is more invested in, or has benefited more from the dynamics of the bundle than ESPN. The combination of must-have programming for a key segment of the pay-TV audience, and the must-carry leverage of its sister-broadcast network ABC, has given the Disney-owned sports network the power to command the highest per-subscriber carriage fees in the industry, ensure placement on basic tiers, and compel carriage of ancillary networks like ESPN Classics and ESPN Deportes.

espn_sportscenter_logoFor those pay-TV subscribers not in the ESPN demographic, however, that leverage has acted like a tax, imposing higher costs for networks and programming they don’t watch, yielding what amount to windfall rents for ESPN. Those windfall rents, in turn, have given ESPN the wherewithal to pay the skyrocketing rights fees for live sports. Thoseinflated rights fees, in turn, have become the primary economic engine of most professional and big-time amateur sports while acting as a formidable barrier to entry for would-be competitors to ESPN, yielding a virtuous cycle that reinforces ESPN’s dominant position within the pay-TV ecosystem. Read More »

NFL Testing New Formations

The NFL seems to be in a test pattern. On Monday, the league announced that it will make next season’s match-up between the Buffalo Bills and the Jacksonville Jaguars available exclusively via the internet outside of the NFL_Networkteams’ home markets, rather than on national television. That was followed by an announcement that the league will suspend its local TV blackout rule for the entire 2015 season allowing games to be shown in their local markets even if the game is not a sell-out.

The league described both moves as tests, although what exactly is being tested in each case was left a bit vague. Read More »

NBC throws one away

NBC tried to go long in promoting its TV Everywhere offering by using a free live stream of ysterday’s Super Bowl between the New England Patriots and the Seattle Seahawks to showcase its over-the-top chops. But like Seattle in its final, goal-line possession, the network might have been better keeping it on the ground. Instead of a showcase for TV Without the TV, as NBC’s marketing pitch had it, the live streaming experience was mostly a showcase for the limitations — both technical and economic — of over-the-top broadcasting.

superbowlliveextra400According to a tweet from NBC Sports PR, the live stream drew an average of 800,000 viewers per minute, up 52% from last year’s game, peaking at 1.3 million concurrent viewers during Seattle’s baffling final possession, up 18% from last year. But the strains of delivering all that traffic (via Akamai) were evident. Read More »