As the transition from traditional linear TV to streaming continues to unfold, sports fans are bearing more and more of the costs associated with watching their favorite teams.
During peak cable, when nine out of 10 American households subscribed to the bundle, the cost of being a sports fan was subsidized by those who had no interest in live sports but subscribed to a pay TV package anyway. That’s no longer the case. Consumers of non-live programming have largely moved away from the bundle as pay TV households have dropped to around 65 million from a high of more than 100 million over a decade ago.
Now, sports fans are the ones keeping the cable bundle alive. A traditional linear TV subscription is still the most seamless way to access a wide variety of live sports programming. But it’s no longer the only way, nor is it the way fans can access all of the live sports they want/need. Live sports rights are now incredibly fragmented. Many games can still be accessed via linear TV, sure. But there’s an increasing number of games that require a streaming subscription to access.
The result? Even fans that willingly purchase everything necessary to watch live sports (i.e. a pay TV subscription, Peacock, Netflix, Prime Video, etc.) have a clunky experience compared to the days of peak cable. No longer can fans simply flip channels with the press of a button. Instead, they have to close out of one app, open another, and then find the stream they’re looking for within that app. That friction, while horrible for channel surfing sports fans, is partly by design.
Streamers have begun investing in live sports as a means of getting people on their platform. But once they’ve gotten a fan to click into the app, they don’t want them to leave. They’ll be served any number of other shows within their library to entice sports fans to keep watching long after a game has concluded. That’s not going to fly for a fan that, say, would like to watch one game on Peacock while checking in on another game on Prime Video.
So what’s the solution? Well, a number of platforms have already thrown their hat in the ring to be the “hub” of all live sports programming. But it’s unlikely that these companies can get every sports rights holder on board with essentially licensing their games to another platform.
That’s partly why two prominent sports media analysts believe live sports is ripe for a “Napster moment.”
Former NBA executive Ed Desser and former ESPN executive John Kosner, who each run their own sports media consultancies, identified this fragmentation in live sports, which drives costs up for fans and makes for a less user-friendly experience, as a key reason why consumers may gravitate towards a Napster-like product that upends the industry.
Napster, of course, completely disrupted the music business in the early 2000s by essentially eliminating the need to purchase physical media like CDs or cassette tapes. It wasn’t until Apple released the iPod, and later when streaming services like Spotify came along, that consumers began paying for music again, albeit in a much altered way.
Desser and Kosner, in an op-ed for Sports Business Journal, described the prominence of free, easy to use piracy sites and the rise of FAST channels as two signs that free or low-cost models are the future of live sports.
“Today, free content on the internet has spawned a $262 billion digital advertising business, per MoffettNathanson, that dwarfs everything else in media and is helping drive increasingly popular lower-cost streaming tiers. There are powerful forces at play: The unique and ubiquitous popularity and engagement of sports; sports rights holders’ desire for maximum reach; ever-growing customer acquisition costs; the explosive growth of LLMs; competitive, closed-loop ad systems, such as Amazon, Google, Meta and Walmart; 100 million U.S. FAST channel monthly users … and the millions watching illegally today. This combination could bring about a “free-ish” revolution in sports rights: much more effective, AI-personalized advertising with significant revenue shares to sports rights holders (and guarantees to the biggest). From there, sports media could access additional paid upgrades from literally millions of fans for 8K, sub-second latency (“Live Live”), alt-casts, premium access, virtual goods, ancillary services (Uber Eats, etc.) and whatever else we can imagine. … plus making pirate sites unnecessary. Want a comp? It’s video games.”
The analysts cite multiple examples where similar transitions have been made. JioHotstar, for instance, offered the first hour of Indian Premier League cricket matches for free, but required a subscription to watch the full match. DAZN offered the entire FIFA Club World Cup for free. Fox streamed the first five minutes of soccer and college football games for free last year.
The reality is, if a platform comes along and creates a seamless user experience catered to the live sports fan, there would be a massive market for it regardless of its legality. And if such a platform were able to attract a critical mass of users without getting shuttered, live sports rightsholders would be forced to respond with a comparably seamless product.
Given that there’s already a significant number of sports fans illegally streaming games, this doesn’t seem too crazy. The question is, will a legitimate product come along first and solve these problems? Will companies embrace a free or low-cost model as Desser and Kosner suggest could work? Those both remain big unknowns.
About Drew Lerner
Drew Lerner is a staff writer for Awful Announcing and an aspiring cable subscriber. He previously covered sports media for Sports Media Watch. Future beat writer for the Oasis reunion tour.