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Sports streaming is the hottest ticket in media, but did you know that as much as 90% of sports streaming attention as in minutes watched is actually still happening on linear television via streaming apps like YouTube TV and FUBO?
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For example, the NFL has media rights agreements with ESPN, ABC, CVS, Paramount Plus, Fox, Fox One, NBC, Peacock, Amazon Prime, YouTube, and Netflix, which can cost the average consumer as much as$1,500 a year to watch their favorite sport, according to a recent USA Today study.
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And just two weeks ago, on February 25th, the FCC issued a public notice for comment on sports broadcasting practices and marketplace developments, highlighting the rift that everyone feels, from advertisers to casual fans.
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Welcome back to the Stave Streaming Podcast.
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I'm your host, Tim Rowe, and today I'm joined by one of the most qualified analysts on TV and streaming.
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That's Ross Bettish, senior analyst at eMarketer.
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Enjoy.
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Ross Bettish, eMarketer.
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You reached out and you had some really interesting research about sports, about streaming, and about really, there's there's a big delta.
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There's a there's a big spread between eyeballs, attention, and kind of the the truth behind the sports streaming narrative.
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Ross, thanks so much for being on the podcast.
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Hey, thanks for having me on.
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And I'm always down to talk about sports.
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Yeah.
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No, this is this is a good place to talk about sports, and we'll tie it back to the most important uh theme of the day, which is streaming, which is television advertising, so that we can we can write this off as a business launch.
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Uh you released a book that I think is actually the perfect launch point for today's conversation.
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You wrote a book, you published a book last year, 1999, the year that the year low culture conquered America and kickstarted our bizarre times.
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You want to tell us a little bit about that book and then uh we'll talk about sports streaming?
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Well, yeah.
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So in that book, I just make the case that all the trashy entertainment from the late 90s, like the pro wrestling attitude era, the insane clown posse taking off, and the beanie baby mania was a sign of what was to come in our our current age.
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So I just find that the trash from a quarter century ago shapes our world in some very unusual ways.
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And a lot of it comes from what was very popular on television at the time.
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You know, we're we're living in a Jerry Springer world.
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In more ways than one.
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And uh, and we'll talk about that.
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But let's talk about the sports research.
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And I think that as we go through this, the reason that your your book from last year stands out in this conversation is more leagues are are really branching into a global audience, the the clip culture of sports of athletics.
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There was a lot of debate about the the NBA all-star uh dunk contest and kind of just the quality of sports programming.
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It seems like there's a pretty broad broad spectrum of that, and a lot of what's driving it is the way that we consume.
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What did your research find about the way that we consume sports as it relates to streaming TV?
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Well, the time spent on sports is still predominantly with linear TV.
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So, like streaming is what obviously it gets people's attention, and that's where the growth is.
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You know, streaming's coming from being like nothing, you know, 15, 20 years ago to a sizable portion of the audience now, but it's it's not a lot of time spent.
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So what we see is most sports viewers will watch sports on a streaming service, so it has a lot of viewers, but they're not regularly doing so.
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You know, you might watch like the the Jake Paul Tyson match, or you might watch some Peacock basketball.
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But when we look at data um from Inkscape, for instance, we see that on-demand streaming services are only about 10% of time spent with sports.
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The other two-thirds is going to you know cable packages.
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Now, if you include VMVPDs as streaming, then the streaming share is is more like a third.
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But I I would argue that even though VMVPDs deliver it digitally, you still have to subscribe to the TV networks.
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Like you're still watching it on ABC or on Fox Sports or FS1 or whatever.
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The advertising is still linear TV for all intents and purposes.
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But um that that's just such a big gap because streaming accounts for almost two-thirds of time spent with the TV screen in general, but then with live sports, it shrinks down to like a tenth, and that's gonna change, but um, it is where it is right now.
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And to help our audience with some of the nomenclature of VM VMPD, right?
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Even even the acronyms are sometimes hard to get out.
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What yeah, it's a terrible one.
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It really is.
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What what is that?
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Who are some of the the popular streaming apps that we would know fall into that category?
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Yeah, so a VMVPD, we don't even need to spell it out, it's so stupid.
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Um, it's you know, like we're killing it today, it's done.
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Yeah, it's uh uh we've tried to kill it with uh we call it actually digital pay TV, is what we call it, but that hasn't caught on broadly, so I'm using this other term because people probably know what it is.
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But it it's digital cable, it's Hulu at Live TV, YouTube TV, FUBO.
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You're paying for a package of TV networks, but it's done through a streaming service, and there is a lot of sports watching on that, that's about 20%.
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So, you know, it's like double what is on Paramount Plus, Peacock, Netflix, Prime Video, because it's just retransmitting what TV stations people have been watching for decades, and that's kind of the main purpose why people use those services.
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Like, if you look after football season, they'll report quarterly losses on those services, like all the companies that have them.
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Yeah, so so that that category is like incrementally grown, but it doesn't grow quarter over quarter.
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It like it grows at the start of certain seasons.
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It's very like they lose subscribers um the end of football season, you know, during baseball season, that doesn't have quite the appeal uh because that's more of an RSN um regional sports network-driven business.
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So, you know, people who want to watch that have to go to the MLB TV package or to their individual RSNs, like um Gotham Sports app, if you're if you're a Yankees fan, for instance.
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But the the VMVPDs, you know, they have their little niche, but that they they haven't really gone beyond that.
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So, like what what I guess I get when I'm researching all this stuff is a lot of the viewers who are counted as digital viewers of live sports are pretty casual.
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Most people aren't predominantly watching live sports that way.
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I do.
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I'm sure others who are listening to a streaming podcast do, but that's not the behavior in the general population.
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The general population is still to find out those TV networks and watch that way.
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And the TV networks hold the rights to like the lot of the greatest stuff still, so you can't totally get around it yet.
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Let's talk about that.
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Let's talk about the rights because Michael Beach from the State of Screens put out a piece earlier this week actually that sports could be a bubble, that that's the sports rights industry starting to look a little bit like a bubble, and we look at how much the streaming apps are actually paying to compete for these rights relative to the number of minutes of ads per hour, and kind of you you start to break down the math.
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Doesn't seem like the math is all the way there.
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Are you are you seeing anything similar in your research?
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I I felt that way for a little while now because the the rights have just increased at such an exorbitant rate.
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Like that NBA deal that was renewed last year.
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Six point nine billion, up from two point seven billion to six point nine billion.
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Yeah.
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Yeah, so like it, you know, I I can I get why TNT, you know, didn't want to play ball, like at first, because that's just a a crazy amount of money.
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Or if we even go on a smaller scale, like Peacock, which doesn't have you know a lot of subscribers, they're you know, they're kind of towards the bottom of the Nielsen gauge.
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They pay a lot of money to like the Big Ten in the in the Big East to have streaming exclusives, and they don't release data.
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But I you know I'd be surprised if like a St.
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John's game on Peacock is even bringing in 500,000 viewers.
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Because like a college basketball game on FS1 usually doesn't like it's gotta be a good game to crack a million.
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The kid streaming the game on TikTok that he's watching in his dorm room probably has as many viewers or more.
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But they're paying a lot of money for so I I do wonder like some companies can take it as a loss, like like Amazon, they probably honestly don't care that much if they lose money on the NBA because didn't even feel it then feel it, and they're they're bringing more people into Amazon and just increasing awareness for Amazon in tandem with the NBA, so there's a halo effect there.
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But like Apple TV paying for MLB or like Peacock with Big East basketball, if you're having peanuts for viewers, those those losses eventually well, Apple's another one that doesn't probably care if they eventually add up.
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But um, you know, with Peacock and then with with Paramount coming with these UFC matches, like they're not gonna get like you know 40 million people to watch all these fights.
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The math makes it seem like it's gonna be a loss leader on some of these.
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Yeah, the the math is definitely tough, but I think then to your point, Ross, is looking more fundamentally at the company itself.
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Is Amazon a streaming TV app?
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No, streaming TV is a component of the thing that they do, right?
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They print money from from AWS.
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Is is Netflix a streaming app?
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Yes, right.
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They they have to make money in a fundamentally different way.
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So as we're looking at these things, I think keeping those things in mind, right?
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The MLS tripled their annual rights payments, but lost 65% of viewers after after moving to Apple TV.
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Um, just really interesting stuff that we'll continue to keep an eye on.
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What are you most excited about in the research?
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What things stood out to you that that excited you the most?
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Well, one, yeah, something you just alluded to.
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I like seeing the trade-off between like short-term, we gotta just increase our subscription revenue and our retransfees at all costs, and then long-term thinking of like, we'll give up some of that if we reach more people who we want to have as our long-term fan base.
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Like, I'm thinking of all those NBA teams that said, we're not gonna use a cable network that charges our subscribers, you know, charges our fans$6 a month.
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We're just gonna put it on our local affiliate so we can have more fans and hopefully get them to come to the games and buy the merchandise and and like become lifelong Utah Jazz fans.
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That that excites me.
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Another thing that excites me, even though it often pisses me off more, is the breadth of what's available has greatly increased.
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Now, that means sometimes it's very hard to find like what you want to watch.
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Like even something as mainstream as the Yankees.
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You might have to go to the Yankees' website that day and be like, are they on Yes Network or is it on NBC that day, or is it on Apple TV?
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Like, who knows?
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Because it changes every game.
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And that's and it's not even like a regular cadence, like um, you know, Sunday Night Football's on NBC.
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It's like Amazon Prime could just grab a game whenever they want to.
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You have to pay attention, but everything is there if you are willing to pay for it.
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And and for tertiary sports, that wasn't always the case.
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So like I like seeing things like flow sports.
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I don't know if people are familiar with it, but tell us about flow.
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Well, it's just kind of a niche streaming service.
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Um, you know, you pay a monthly fee and you can get access to like all sorts of college and even high school sports that wouldn't be on there otherwise.
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Uh Big Ten Plus is another example.
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Like, if you want or if you're really a big fan of Penn State Wrestling, and Penn State Wrestling is huge.
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They've won like, I don't know, Kale Sanderson's won probably like six national titles since he's been coached there.
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Like they they then they're unbelievable.
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But that's not on national TV normally.
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But now you can watch it if you want.
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You you know, you can watch college volleyball and college gymnastics, and you you you can find lower level semi-pro hockey if you if you want to go search for it.
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That was basically limited to radio broadcasts in the past.
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So while streaming comes with the frustration at the high level of like, man, I just want to watch my team and I gotta figure out where I'm gonna do that, and I also have to probably pay five people to do it.
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That's annoying.
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But if you're into a sport that isn't one of the big four, you can put it on your TV screen and watch it live with a uh way you you wouldn't have been able to ever do so before.
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Are regional sports networks survivable as a business model, or is it this pivot to niche?
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Is it team access?
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Like, do you have a take on how this all plays out?
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Well, yeah, it it's it's gonna be a mess.
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I I think regional sports networks survive for the strongest teams.
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If you are um, you know, the Spectrum LA Dodgers channel or like MSG, you're in this huge market, you have such a large built-in fan base, you can financially profit through an RSN probably indefinitely.
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But like the Atlanta Braves or like the Utah Jazz, you know, teams in in smaller markets whose like salary role isn't always at the top, so like you know, they're not gonna be able to compete for the playoffs every single year, that's a lot harder.
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And a lot of those are dying off, and they were relying on a um a model that you know just doesn't work.
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Like if you if you're relying on cable subscribers who aren't actually going to watch your channel but just pay into it, well, that doesn't really work in an era of cord cutting.
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So for them, they have to figure out something.
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So I think there's gonna be more league control for MLB, MBA, NHL, for the franchises who um are unable to make it go themselves.
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And there's gonna be some pushback though, because those giants like the Dodgers and the Yankees and the Knicks, they're not gonna want to give up that control because it benefits them to be in the old system.
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So that's something that's probably gonna come up in collective bargaining agreements for all these leagues when they like you know renew with their with their unions.
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And then with the niche, it's just kind of spaghetti on the wall right now.
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Like, you know, the Roku channel has League One volleyball, which is one of three pro volleyball leagues um that are running in the United States right now.
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Like if you want, if you want to, you know, watch that, that's great.
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But I don't know how good the discoverability is or how many built-in fans there already are that even though it's cheap, the rights cost nothing, and it's cheap to pretty much just film that with one or two cameras and put it on the Roku channel.
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I I don't know if there's gonna be enough revenue there to like drive serious investment.
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So um, you know, it's the same with all those sports that are on big plus.
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And it's it's tough to know which ones will actually drive anything for for revenue or which ones are just there as an experiment.
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It's a fun time to experiment.
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There are a lot of experiments out there, and what's cool is we've got this conversation on the record.
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So as time time goes on, we'll be able to look back and uh and and see what's happened.
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I want to share some stats uh from Michael Beach, State of Screens, about the sports rights bubble, kind of get your reaction to it to a few of these.
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Streaming services are only selling 10 to 20 percent of the inventory.
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You covered that in the open, uh, at roughly a quarter of the CPM.
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So it's less inventory and a lower CPM.
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Uh, let's see, streaming will hit 50% of TV ad impressions by 2030, but that's still four years away.
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Um, so still pretty far off.
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Yeah, that'd be probably three years after CTV exceeds TV and ad spend.
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So the impressions are definitely a lagging thing.
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Interesting.
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And then the yeah, impressions again growing.
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Uh while linear impressions fall.
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Could sports be an opportunity for linear to reclaim market share or to re reinvent the way that we think about the bundle?
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Is cable dead?
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I do think uh cable is um not dead yet, but unable to fully resuscitate itself from its decline.
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And uh but the thing that's keeping it from being dead, that is what you're talking about, is that the sports bundle.
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And they they keep thinking of new ways to to slice the bundle.
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I think one of the more interesting developments is is NBC killed the NBC sports network, the cable channel.
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Then they had all these Peacock exclusives, then it was like clear that well, you know, not everyone can like watch this Peacock exclusive, so let's put it back on the NBC sports channel and bring it back.
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So like those NBA doubleheaders are on the reintroduced channel.
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And same with some of those like big East basketball games.
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There's enough value in cable that they they brought that back.
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And that that's a that's a you know rare use case, perhaps, but that shows that cable isn't dead.
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Because if it is, why would you why would you bring back a sports network?
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You you need it for the audience reach because your streaming service alone isn't gonna deliver what advertisers want.
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At the same time as spinning off versant and versant appearing to run maybe a similar playbook, playbook themselves, and combining those uh streaming and and broadcast assets.
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Well, Ross, there's a lot here and probably enough for for a follow-up part two conversation, but it it wouldn't be a full podcast if we didn't spend some time talking about your book was featured in a movie.
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Is that right?
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Uh yeah, well, a documentary, yeah.
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Okay.
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Tell us about what was the documentary, where would we have seen it?
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It was Dirty Talk, it was the name of it.
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It was a docuseries on ABC, and it was also available on Hulu and Disney Plus.
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So if you're a streaming person, you know, Hulu and Disney Plus would be the way to look at it.
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And it goes in depth on how 90s talk shows like Jenny Jones, um Horaldo, Jerry Springer, Ricky Lake have shaped our society.
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So, like my book has a chapter on that.
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It's actually the opening chapter.
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That's how the showrunner found me.
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So, you know, I I'm in there as a talking head, but then they also talked to like Maury Povich and and um Montel, you know, all these like great names from that era.
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So it was a fun experience.
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You know, I had a lot of people who uh I haven't talked to in years reach out because they saw me on TV, which made me think, hey, there's people still watching ABC live.
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That's interesting.
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This stuff does work.
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If you put something on ABC, no matter what it is, there's still probably gonna be at least a million and a half people that tune in.
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Maybe maybe a third of them are sleeping, but you know, they're still there.
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One of them's my aunt, so so you'll definitely uh get a call from my aunt.
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All the heroes of being homesick, you got to spend time with uh with legends.
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That's awesome.
00:20:39.860 --> 00:20:42.740
And Ross, we got to spend time with a legend today.
00:20:42.980 --> 00:20:44.100
Thank you for being here.
00:20:44.180 --> 00:20:49.059
This has been a fun, insightful conversation, and I'm sure just the first of many.
00:20:49.220 --> 00:20:50.340
Thank you for being here, Ross.
00:20:50.500 --> 00:20:51.140
This is a good time.
00:20:51.220 --> 00:20:51.940
Thanks for having me on.
00:20:52.100 --> 00:20:52.420
Absolutely.
00:20:52.500 --> 00:20:57.460
If folks want to learn more about what you're working on, if they want to stay in touch with you, where should we go?
00:20:57.539 --> 00:20:58.900
Where are you most active on social?
00:20:59.059 --> 00:21:00.340
How do we stay in touch with your work?
00:21:00.660 --> 00:21:06.420
Yeah, so I'm I'm on you know, LinkedIn would probably be the easiest way in just you know, Ross Spanish backslash.
00:21:06.500 --> 00:21:08.980
I mean LinkedIn.com backslash ra spanish.
00:21:09.220 --> 00:21:10.180
Pretty easy to find me there.
00:21:10.259 --> 00:21:20.980
You know, same on Twitter, but if I'm I'm sharing more streaming research on LinkedIn, and then if you really want to shoot me a message, the easiest way would be uh R Benish at eMarketer.
00:21:21.059 --> 00:21:24.580
You know, emails my preferred method of communication because I'm a millennial.
00:21:24.740 --> 00:21:24.900
Cool.
00:21:25.059 --> 00:21:26.900
We'll make it all easy to find.
00:21:27.140 --> 00:21:32.740
So, regardless of your demographic age range, you'll be able to get in touch with Ross.
00:21:33.140 --> 00:21:34.340
Ross, thanks so much for being here.
00:21:34.500 --> 00:21:35.140
Hey, thank you.
00:21:35.299 --> 00:21:35.700
Absolutely.
00:21:35.779 --> 00:21:41.860
And if you join enjoyed this conversation, please share with a colleague or a client and start a conversation today.
00:21:42.019 --> 00:21:43.539
We'll see y'all next time.
