As television continues to splinter, with more entrants into the fray on a regular basis (see YouTube TV), what is becoming clear is the struggle of broadcast networks to maintain a hold on their traditional audiences. And the power of popular sports to attract viewers that will sit through advertising is almost unquestionable. There are two recent articles in Ad Age that echo this sentiment.
First, in this article about the IPO of Snapchat (aka, Snap) makes clear that their dependence on sports programming is a paramount concern. The revenue stream depends almost solely on advertisers, and Snapchat has devised a way to make it a preferred source for watching sports.
“In many ways, the NFL is the quintessential example of Snapchat’s dream of becoming the next TV — top media partners producing original content and selling that to advertisers in upfront multimillion-dollar deals.”
For broadcasters, the news just keeps getting worse. As this other article mentions, every traditional broadcast network has seen a decline in viewership, with the sole exception of Fox. And in their case, this is revealed:
“Pull sports out of the mix and Fox’s ratings struggles become even more self-evident.”
So, what does all this mean? It’s not entirely surprising, and with digital platforms like Twitter and Facebook, as well as mobile providers like Verizon, all trying to get a piece of the sports action, it is no wonder that Disney stock is suffering mainly due to ESPN, which must now face higher license fees for sports because of the competitive bidding.
The real winners continue to be the owners, and I expect the players will also get a taste. The question becomes, what sport will emerge as demand for programming grows? UFC? Drone racing? Spelling bees? One can only speculate…