Thank you for your interest in S&P Global Market Intelligence! We noticed you’ve identified yourself as a student. Through existing partnerships with academic institutions around the globe, it’s likely you already have access to our resources. Please contact your professors, library, or administrative staff to receive your student login.
At this time we are unable to offer free trials or product demonstrations directly to students. If you discover that our solutions are not available to you, we encourage you to advocate at your university for a best-in-class learning experience that will help you long after you’ve completed your degree. We apologize for any inconvenience this may cause.
Fill out the form so we can connect you to the right person.
If your company has a current subscription with S&P Global Market Intelligence, you can register as a new user for access to the platform(s) covered by your license at Market Intelligence platform or S&P Capital IQ.
One of our representatives will be in touch soon to help get you started with your demo.
We generated a verification code for you
Sports still plays pivotal role in preserving pay TV ecosystem
How widespread is Netflix password sharing?
Q3’21 smartphone shipments revert to a decline ahead of the holiday quarter
Southeast Asia digital ad spend solid as linear TV takes hit
Disney+ and HBO Max – A Tale of Two Release Strategies
Having spent years battling back competition from Netflix Inc., pay TV providers are facing a new wave of streaming competitors that target the glue that has thus far held the video bundle together: live sports programming.
Streaming services like ViacomCBS Inc.’s Paramount+ and NBCUniversal Media LLC’s Peacock, as well as legacy products like Amazon.com Inc.’s Prime Video, are adding more and more sports content to their services. Analysts stand divided on just how sharply this trend will impact subscriber numbers among traditional pay TV services.
MoffettNathanson, partnering with consulting firm Altman Solon on a third-quarter study of consumer interest in sports, found that viewers in about 58.4 million households described themselves as sports fans, screening at least one event per month. The base has grown from 55.8 million in the third quarter of 2019.
“Sports fans are not abandoning traditional pay TV at all,” the report’s authors wrote, concluding that the decline in linear TV subscribers is coming from people who do not watch athletic competitions.
Kagan senior research analyst Tony Lenoir said it is “a truism” that sports is largely holding the pay TV universe together, but the “argument is circular” considering the habits and interests of younger consumers. These younger viewers are are often more interested in gaming and watching clips on social platforms, and thus hold different interests and expectations compared to their forebears. Older viewers, by contrast, are more attuned to leaning back in their living room and taking in full games.
Lenoir said rights deals like the six-season extension NBCU recently netted with the Premier League, the U.K.’s topflight soccer circuit, takes that into account. The package affords linear exposure, as well as streaming match coverage aimed at attracting younger viewers to buttress Peacock’s subscriber roster.
While sports over-the-top offerings are expanding, they are no slam dunk to draw a significant base of subscribers due to quality and buffering issues, according to Digital TV Research principal analyst Simon Murray.
“If latency becomes a major concern, viewers will go elsewhere, especially if they have money on the game,” Murray said.
Latency issues could go hand in hand with an increase in audience size. Although Paramount+ and Peacock are streaming simulcasts of NFL games on CBS (US) and NBC (US), Amazon’s Prime Video will be the first digital player to have an exclusive package with the circuit’s “Thursday Night Football” package, kicking off with the 2022-23 season. That figures to be the first true gauge of digital sports delivery in the U.S. Historically, Amazon has been part of the “TNF” tri-cast with FOX (US) and NFL Network (US).
Spotlight on Amazon
There is still a question around whether digital properties can attract the same level of viewership as linear networks.
On Dec. 26, 2020, Prime Video and Twitch, plus mobile properties operated by Verizon and the NFL, exclusively presented the Arizona-San Francisco game that earned an average-minute audience of 4.8 million. Adding viewership from TV stations in the club’s home markets, the average-minute audience reached 5.9 million, according to the NFL.
While the game was played on a Saturday on the day after Christmas, its delivery fell considerably short of NFL media partners’ per-game average of 15.4 million during the 2020 regular season.
The NFL, in renewing its rights deals with existing partners through the 2033 season, reserved the right to opt out of its streaming simulcast pacts in the 2029 season. The league could revisit those deals if streaming is contributing a larger portion of its overall audience.
Moreover, early “Thursday Night Football” streaming returns could be a determinant for the NFL Sunday Ticket package. The league has yet to reach a new deal for its out-of-market package, which has long been the exclusive province of DIRECTV. That deal runs through the end of next season.
Kagan’s Lenoir believes the league will opt for the newer technology, while others believe Sunday Ticket could be divided between the incumbent and a streaming platform, such as Walt Disney Co.‘s ESPN+ or perhaps a new player like Apple Inc.’s Apple TV+.
News, broadband and the bottom
Sports aside, MoffettNathanson said news is also a key subscriber-retainer. The firm’s report pegs 18 million pay TV subscribers as regular news viewers but not sports viewers. It said the 7 million who do not screen sports or news are at risk for further cord-cutting. The researcher puts the multichannel floor at 53 million subscribers.
Kagan, a media research group with S&P Global Market Intelligence, estimated in May that the pay TV universe could likely finish 2021 with 81.6 million homes — 65.6 million from cable, satellite and telco TV offerings, and 15.0 million from virtual providers like Hulu LLC and Google LLC. The Kagan forecast estimated that the total could then fall to 64.2 million in 2025, with 46.0 million traditional pay TV homes and 18.2 million subscribers to virtual platforms.
Digital TV Research’s Murray points to connectivity as a big part of pay TV’s glue, with many consumers paying principally for broadband while keeping video as the add-on part of a bundle. He also notes that top operators, like Comcast Corp. and Charter Communications Inc., are offering streaming service access through their platforms.
While the multichannel universe continues to wither and already trails the subscription VOD services in terms of subscriber counts in the U.S., Murray notes that pay TV remains a substantial business. Digital TV Research projects that subscription VOD revenues will not surpass pay TV revenues until 2026 with $62 billion versus $58 billion, respectively.