Why the future of sports may belong to streaming companies

The Street

TheStreet’s Colin Salao breaks down why traditional cable may be in trouble when it comes to how consumers view their sports.

Transcript

00:00 On the heels of the massive news between the WWE and Netflix,

00:03 Colin, walk us through some of the other partnerships

00:06 between streaming services and leagues.

00:08 Of course, Netflix has now entered the market.

00:13 They are in live sports entertainment,

00:15 but a lot of other players have been in this for a while now.

00:19 Amazon and Apple as some peacock even.

00:22 So a couple of years ago, NFL agreed to a deal

00:25 with five different broadcast partners,

00:28 11 years, 110 billion, one of them being Amazon,

00:32 who are paying $1 billion a year for Thursday night football.

00:37 NBC is also one of those partners.

00:39 And as we saw during the wild card game a few weeks ago,

00:42 they paid $100 million to exclusively air that matchup

00:47 between the Kansas City Chiefs and the Miami Dolphins.

00:49 For Apple TV, on the other hand,

00:52 they are in the game with Major League Baseball

00:54 paying $85 million per year to air MLB games on Fridays.

01:01 And they paid $2.5 billion for a 10-year deal

01:05 with Major League Soccer,

01:06 which has been great for them through its first season

01:09 due to the arrival of Lionel Messi.

01:12 What exactly is driving the move

01:14 from traditional cable to streaming services?

01:16 I mean, just like with anything in business,

01:20 it's really the dollars, it's really money.

01:21 We've seen media change.

01:24 Social media has come in.

01:26 People are consuming content differently.

01:29 And for a while, it was Netflix and Amazon

01:32 and these streaming services were doing,

01:34 you know, regular television shows and movies.

01:36 And when they recognized sports

01:38 as something that was keeping people on linear television,

01:41 they went ahead and got it.

01:43 And a lot of these tech companies like Amazon and Apple,

01:45 they have deeper pockets than your Disney's

01:48 or your Netflix's.

01:50 So they're willing to spend more money

01:52 to bring people into these media services that they have

01:55 and drive them towards

01:57 their more high profit margin properties and products

02:00 like your iPhones or, you know, other Amazon products.

02:04 So they're bringing in that money,

02:06 they're seeing where the money's going,

02:07 they're seeing where content is being consumed

02:10 and they're investing.

02:11 And that's why you're really seeing

02:13 a lot of movement towards streaming.

02:15 (silence)

02:17 [BLANK_AUDIO]

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