Big Tech's Move Into Streaming Live Sports: Winners And Losers

Tech firms are capitalizing on cord-cutting by ramping up original content and striking new deals to stream live sports.

Twitter Inc TWTR won the first NFL contract to stream "Thursday Night Football," a deal now owned by Amazon.com, Inc. AMZN’s Twitch, which also offers eSports and the NBA G-League.

Verizon Communications Inc. VZ manages NFL app streaming, and its Oath subsidiary offers NFL games on Yahoo Sports and go90.

Walt Disney Co DIS’s got ESPN and the MLB-focused BAMTech, and it’s rolling out ESPN-Plus to stream live sports.

Tencent provides NBA access in China; Facebook, Inc. Common Stock FB recently secured MLB streaming rights; Alphabet Inc GOOGLGOOG’s YouTube TV streams traditional broadcast networks and simulcasts games; and Apple Inc. AAPL announced at this year’s WWDC that live sports would soon run on the Apple TV platform.

Losers: Broadcasters

The emerging interest drives contract competition for FOX, CBS and NBC.

“Traditional network television and cable television giants might be in trouble,” Loup Ventures managing partner Gene Munster wrote in a recent note. “Live sports are one of the most compelling reasons for cable television subscriptions. As these products are available at a lower cost and through a more easily accessible platform, cord cutting will further accelerate.”

Winners: Tech Companies

Verizon had been using the service as a pipeline to secure carrier contracts, offering access exclusively to customers. Amazon had similarly provided its service only to Prime subscribers.

This NFL season, the firms will open access to non-Verizon customers and Twitch subscribers, respectively. The new strategy focusing on community expansion and ads over client conversion signals fresh outlook on the value of sports fans and where they fit in the business model.

Tech companies are finding they “can increase engagement on their platforms and attempt to reach new users by adding more live streaming content,” Munster wrote.

Winners: The Leagues

An analysis by Loup Ventures found ongoing NFL contracts for broadcast TV ranged between 87 cents and $10.39 per viewer per game against most recent streaming contracts worth between $13.33 and $50.22. NBA rights cost broadcasters $5.20 versus streamers’ 12 cents.

Even though the streaming services currently reach smaller audiences, Munster expects the channels will eventually prove more valuable for professional leagues.

“While cord cutting continues, more and more people are able to access the internet each day,” he wrote. “As professional sports leagues seek to expand internationally, having partners who can reach these parties will be important.”

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