Disney, Warner Bros. Discovery, and Fox have announced a new sports-focused streaming platform that has the potential to reshape the television industry. However, this joint venture could also anger pay-TV distributors and sports leagues. The programmers behind the platform pay sports leagues a significant amount of money to carry their games and charge pay-TV distributors a high fee to broadcast those games. The new streaming platform could disrupt these arrangements and put pressure on both parties involved, according to industry executives.
The programmers seem to be aware that there may be blowback from their partners, as they had not informed any pay-TV companies or sports leagues about their plans until the announcement. While the programmers have not explicitly stated this, their actions suggest they anticipate some resistance.
The new streaming platform offers a package that gives consumers access to a wide range of sports programming at a lower cost than traditional cable TV. It is targeted towards individuals who primarily subscribe to cable for its live sports coverage. However, it does not include CBS and NBC, which have significant NFL deals, so it may not fully replace traditional pay TV for viewers who watch NFL games.
From an industry perspective, the programmers describe the platform as a "virtual MVPD," which means it is a cable TV package delivered over the internet. Similar services like Hulu Live and YouTube TV already exist in the market. This description is crucial because it explains how the programmers will be compensated for the content in the bundle. They will be paid by subscribers, just like with traditional pay TV.
The programmers argue that the new platform could potentially benefit sports leagues by maintaining their current audience and attracting new viewers who may not be willing to pay for traditional cable TV. However, pay-TV companies and sports leagues have expressed concerns about the joint venture. Pay-TV distributors are worried about competing with the programmers using their own content, while sports leagues question the collaboration between former competitors.
Ultimately, it remains unclear if pay-TV companies and sports leagues can do anything to prevent the success of the new streaming platform. While they may not like the increased competition, previous experiences have shown that they are unable to stop industry disruptions. The programmers behind the new platform are likely hoping for a similar outcome, where the pay-TV companies would rather have sports and compete with the new platform than lose sports programming altogether.