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Last Updated, Dec 23, 2022, 6:21 PM
YouTube NFL Sunday Ticket deal is a win for traditional TV networks

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Los Angeles Chargers running back Austin Ekeler, center, runs for extra yardage while Tennessee Titans linebacker Monty Rice, left, and safety Andrew Adams (47) attempt a tackle during the second half at SoFi Stadium on Sunday, Dec. 18, 2022 in Los Angeles, CA.

Allen J. Schaben | Los Angeles Times | Getty Images

The National Football League had a streaming service in mind when it was looking for a new home for the rights to its “Sunday Ticket” subscription game package. 

The league got its desired outcome in a deal with Google‘s YouTube. Traditional TV networks got what they wanted out of it, too. 

Beginning next season, “Sunday Ticket” will be offered in two ways through YouTube: either as an add-on to its YouTube TV service, a digital TV bundle that mirrors the traditional pay-TV package, or a la carte through YouTube’s Primetime Channels. 

YouTube is paying about $2 billion annually for residential rights over the next seven years, CNBC reported. The process concluded this week after months of negotiations with potential winners like Apple, Amazon and Disney, which operates ESPN streaming service ESPN+.

While pricing hasn’t been determined, consumers will likely get more bang for their buck by subscribing to YouTubeTV and adding on “Sunday Ticket,” which shows out-of-market NFL games on Sunday afternoons. It’ll also give them access to nearly all NFL games in one place. Google’s YouTube TV bundle includes broadcast stations like CBS, Fox and NBC. Fellow tech giants Apple and Amazon don’t provide a similar bundle offering with broadcast or pay-TV networks, such as ESPN and NFL Network.

Sports, and particularly the NFL, have long been considered the glue holding the traditional TV bundle together. Sports networks, and those that offer live games, attract some of the highest fees from pay-TV operators, and they score some of the highest ratings. The NFL makes large sums for the airing of live games.

For this reason, executives at longstanding broadcast and pay-TV networks, who declined to to be named because they weren’t permitted to talk publicly, found the deal with YouTube a favorable outcome over Apple or Amazon getting the package. 

YouTube and the NFL didn’t immediately comment.

Long live the bundle 

Paramount‘s CBS and Fox broadcast weekly Sunday afternoon games. Comcast‘s NBC is the home of “Sunday Night Football,” and Disney, which owns ESPN and ABC, holds the rights to “Monday Night Football.” 

Each has paid hefty sums for those rights. Last year, collectively, the four agreed to pay more than $100 billion over the course of 11-year-long packages to air NFL games. 

For networks like NBC, CBS and ESPN, they are simultaneously airing NFL games on their fledgling streaming platforms for the audience that has turned away from the pay-TV bundle. 

All of those games are available through Google’s YouTube TV package, with the exception of “Thursday Night Football,” which now streams exclusively on Amazon Prime.

“YouTube in many ways is a very unique and interesting platform,” Dhruv Prasad, the NFL’s senior vice president of media strategy and strategic investments, said on a call with media this week, “because we have chosen a partner that actually supports, in many ways, our existing distribution with Sunday afternoon and night, and Monday night. We actually think this is a model where this will result in a real benefit with existing partners.”

While deals with traditional operators are wildly lucrative for the NFL, the league has been open about wanting more streaming partners. NFL Commissioner Roger Goodell said long before the outcome of the negotiations the league saw a streaming partner as the future of “Sunday Ticket,” which has only been offered through satellite-TV operator DirecTV since 1994. 

Although YouTube is streaming only, it offers a package that keeps the TV bundle alive – by paying similar rates as typical distributors, which has in turn caused a spike in the price of subscriptions. YouTube TV had more than 5.3 million subscribers as of the third quarter, putting it above its competitors like Disney’s Hulu Live TV+, Fubo TV and Dish’s Sling, according to data from MoffettNathanson. 

“This is a win for YouTube TV as it serves a larger goal for them getting more subscribers. And in the end, it helps a package of linear channels,” said sports media consultant Pat Crakes, noting YouTube also secured the rights “at a good price,” to help them bolster their streaming service. 

Adding another NFL property to the equation to make a TV bundle stickier with customers is a positive for networks, executives told CNBC. 

The streaming business, particularly for legacy media companies, has most recently been under pressure. While companies raced to form and bulk up their own services, trailing Netflix, rabid competition is now weighing on subscriber counts, and content costs are soaring. Although streaming remains a priority, some media CEOs are rethinking how much content to take away from the traditional bundle and put on streaming. 

The bundle is dead

For some in traditional media, however, YouTube becoming the home of “Sunday Ticket” wasn’t welcome news. 

For pay-TV operators, this could lead to more customers cutting their traditional bundles and replacing them with YouTube TV, said people close to the distributors. 

In the third quarter, cord-cutting hit all-time worst levels, according to research firm MoffettNathanson. 

“The linear model won’t die of old age, it will instead die of neglect,” analyst Craig Moffett said in a recent note. “If lynchpin content – read: marquee sports programming – is exclusively available on linear platforms, then the linear model will be preserved, at least for a time, and at least for a segment.” 

Driving customers toward YouTube TV subscriptions, or simply a la carte options, only amplifies the bleeding of pay-TV customers from traditional cable and telecommunications operators, like Charter Communications, Comcast and Dish. Executives on that side of the industry had hoped for Apple to win “Sunday Ticket” rights, people close to some distributors said, as it wouldn’t provide another linear bundle option.

One positive for distributors is that while YouTube TV has broadcast and pay-TV networks that offer sports and NFL games, the streamer still doesn’t offer regional sports networks as part of its package. For an all-around sports fan, this still makes the traditional bundle a better bet. 

Still, that could change. This week, Sinclair’s regional sports networks signed a deal with Fubo TV, putting its portfolio of networks on a digital pay-TV bundle. Such a deal with YouTube TV may not be far behind given the recent “Sunday Ticket” package. 

Disclosure: Comcast is the parent company of NBCUniversal and CNBC.

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