Marketing

Live Sports Go Over-The-Top

April 21, 2015

Live sporting events—broadcast on traditional TV and other screens—had previously been the anchor that kept viewers paying for their cable packages.  But that’s now all changing with new OTT packages. Providers invariably need content from ESPN, the leading multinational, multimedia sports entertainment company, because it features the broadest portfolio of multimedia sports. Moreover, the cost that providers pay for that content increases the cost of monthly subscription packages for all consumers. À la carte services from HBO Now, Sony, CBS, and Dish’s Sling TV give budget-conscious, non-sports-fans, more options to cut the proverbial cord of traditional pay-TV bundles.

Outside of MLB’s OTT option, there haven’t been options to watch sports online, such as football and basketball, without a pay-TV subscription. However, for the first time ever, sports fans will be able to watch ESPN and other live sports programming streamed online to their tablets, laptops, smartphones and TVs—all without a cable or satellite bill. Both Dish’s Sling TV and Verizon are bringing live sports over-the-top. AT&T is also trying to leverage NFL Sunday Ticket for mobile as part of its planned merger with DirectTV. CBS has launched an OTT service, but NFL games are specifically excluded from streaming on it, undoubtedly placing it at a competitive disadvantage.

Dish’s Sling TV service is currently the best OTT option for sports fans. For the basic $20 a month package, it offers a “mini-bundle” consisting of a number of EPSN networks including ESPN2 and WatchESPN – in addition to TNT, CNN, the Food Network, HGTV, AMC, and Cartoon Network. Sling offers a $5 sports add-on for additional ESPN programming. Unfortunately, licensing deals between the NFL and Verizon mean Sling TV customers will be prohibited from streaming games on a smartphone and will only be able to watch games on TV and laptops.

Sling offers the budget conscious a way to save money versus paying Comcast, Time Warner, or Dish for a full channel package. However, Dish realizes that if too many consumers abandon their Dish subscriptions in favor of Sling TV, the satellite company could lose significant revenues from its core business.

To prevent families from cutting their satellite TV subscriptions, Dish has limited Sling TV streaming to only one device at a time. Therefore, if your family wants to watch two different live shows at the same time, they’ll have to pay for two subscriptions at $40 per month. With Dish offering premium content from ESPN, the big question is whether $20 is the right price point for consumers to push back on cable. Time will tell.

Last September, Verizon announced their plans for a new over-the-top TV streaming service for their wireless customers. Last month, they provided more details including a summer launch date.  In that announcement, Verizon promised live sports programming for fans of pro and college ball with select games from ACC Digital Network, Campus Insiders, 120 Sports, CBS Sports, and selected live games and documentaries from ESPN.A unique subscription service for mobile isn’t a bad idea. After all, mobile video is booming with Millenials: A recent study done by CTM/University of Southern California found that nearly two-thirds of millennials consider smartphones or tablets, not televisions, as their primary device for video consumption.

ESPN’s entrance into over-the-top streaming signals a huge shift in the industry. ESPN content is unmatched in the cable TV world; the top ten most-viewed programs in cable television history are all ESPN programs. On New Year’s Day, the biggest cable audience ever tuned in to ESPN’s new college football playoffs, with 28.2 million viewers watching the Rose Bowl game between Oregon and Florida State. Verizon and Dish’s new streaming services appear to be a great deal for those not wiling to pay for a pricier monthly cable bill, but for hardcore sports fans, is it enough? One thing is certain, à la carte streaming has finally made it over the hump.