The battle for sports rights could be heating up with streaming companies entering the market at an increasing rate. Sports industry expert Darren Rovell shares with Benzinga thoughts on the streaming market and who could take market share away from ESPN.
Sports Streaming Rights: Action Network sports reporter Darren Rovell shared with Benzinga the value of having sports rights for competitions that need to be watched live.
Rovell said it’s hard to say if the high amount of money is worth it, but the sports betting market has helped.
“If you’re betting live, you need to see it coming off of a TV. Betting makes it more essential to have it coming off of TV,” Rovell told Benzinga.
The strong demand from sports bettors and fans watching the action, along with high advertising rates for content that has to be consumed live, have attracted new players to the sports media rights business.
Once dominated by ESPN, a unit of The Walt Disney Company DIS, and other media conglomerates with sports networks, streaming companies are now shelling out millions for sports rights.
Among them is Amazon.com Inc AMZN, which is now the home of “Thursday Night Football” games for the National Football League.
Rovell said he’s been impressed with Amazon’s handling of NFL games.
“I actually thought the delay would be more of a disaster,” Rovell told Benzinga, citing the delay between the stream and the real-time feed of the game. “I think they’ve understood the need to not be behind.”
Rovell said he’s impressed with how fast Amazon has been.
“That’s what I’ve paid attention to. I thought the whole thing would be a disaster.”
Another company that has been rumored to be circling sports rights is streaming giant Netflix Inc NFLX. The streaming company is holding its first live content event with a Chris Rock special, a move that could foreshadow live sports content.
“I’ve always thought that Apple and Netflix and all these guys would be deeper into sports than they are now, even Amazon.”
Who's The Sports Streaming Winner?: Rovell told Benzinga he thought the shift to streaming companies getting sports rights was coming three or four years ago.
“There’s definite value. There’s value to that, and sports creates those moments,” Rovell said.
The company that should be worried by moves from Amazon, Netflix and Apple Inc AAPL is ESPN.
“Their cash flow is amazing against other brands they compete with.”
Rovell said ESPN and Disney competing against technology giants that have more cash than media companies could be a whole new ball game.
“Especially Amazon and Apple, Disney cash flow does not compete to them, that’s where I thought ESPN was open. I’m surprised it took so long for them to get into it.”
Asked for a prediction on which of the three — Amazon, Apple or Netflix will be the biggest player in sports rights in the next five years, Rovell has a changing opinion.
“I thought it would be Apple, but Amazon is showing that they will be. I think Amazon is the number one in the driver's seat of being a non-traditional outlet that will step it up in sports.”
Rovell said Amazon can drive a strong return on investment, tying its content to immediate sales and selling products in the moment.
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