12:43 pm PDT 3/19/2021
in
Alex Weprin
The league is giving linear networks a decade to manage a digital transition as the pay TV package inevitably declines.
The National Football League’s 11-year, $ 100 billion media rights agreements will have repercussions for the media and entertainment industry in the years to come – but they may not accelerate the end of linear TV as it is currently configured.
For legacy entertainment companies that have signed: Disney, NBCUniversal, ViacomCBS and Fox; the deal is a long-term commitment to the decline of the pay-TV package and a bet on a future in which viewers broadcast their sports, probably through a direct offer to the consumer.
So, while some analysts, like Rich Greenfield of LightShed, argue that the deal marks “the day the multichannel TV package died”, and others like The New York Times‘Kevin Draper Write that they “are fundamentally broadcast / cable television deals”, the deal really walks the fine line, with companies keeping one foot firmly planted in pay TV, while plunging their other toes in the streaming waters to get a feel for things.
It is a point of view shared, in fact, by the NFL.
“I don’t think it’s an or or for us approach,” NFL Media EVP and COO Hans Schroeder told reporters in a conference call on Thursday night, when asked how to balance streaming and linear. “I think that, for us, we consider it a lot like adding distribution in a way that is complementary and that reaches fans through new screens and new opportunities and is increasing the opportunities they have to get involved with our game.”
Undoubtedly, many of the most interesting aspects of new businesses involve streaming. For example: Peacock and ESPN + from NBCU will receive a limited number of exclusive games, with both services receiving broadcast rights for NBC and ESPN games, respectively. Paramount + will simultaneously stream games from CBS, while Fox gets the rights to stream games on its own streaming platform … if it decides to launch one. Even the free services supported by Tubi (Fox) and Pluto (ViacomCBS) ads obtain some additional rights from the NFL.
However, as Fox Sports evp Michael Mulvihill grades: “94% of the NFL’s game inventory in the new trades remains on linear TV. The NFL has become the king of the media by limiting supply and enhancing reach, and that doesn’t change much.”
“While digital is growing, the traditional TV ecosystem is still incredibly rich, incredibly deep, incredibly broad. We reach over 200 million people a year through television,” said Schroeder. “We are certainly excited about the opportunity that Disney will have to develop new platforms with our content [Schroeder made the comments on a call hosted by Disney], but the existing ones and the traditional ones are still very big, even if they are not growing as before, and there are still many fans that we know look there first to get our games and our content. “
In other words, the NFL knows where their bread is buttered, but wants to make sure it is relevant in a world with a much smaller TV package. For networks, this gives them a decade to manage this transition, as the package inevitably declines.
In the streaming world, everything is reversed. Where networks have huge reach through broadcast and cable, in streaming, Amazon is king.
Amazon has over 100 million US subscribers to Amazon Prime, all of which will have access to Thursday night football. This is more than the entire traditional pay-TV ecosystem, which now comprises approximately 82 million households, according to nScreenMedia. It is also more paying subscribers than Paramount +, ESPN + and Peacock combined.
“In the long run, we continue to see technology as a way to expand the pie, not shrink it,” wrote Ben Swinburne of Morgan Stanley in a report on Friday. “This was the case in previous cycles, from transmission to cable, from cable to satellite and now to TV on the Internet. At the end of these agreements in 2033, all we know for sure is that the scenario will be drastically different from what it looks like today. “
The NFL hopes, however, that one thing will remain constant: “The end result of TV is that if you have the NFL, you are relevant,” said Mulvihill. tweeted after the deals were announced. “And if you don’t, you’re competing to be the least irrelevant.”