Mixed Signals

Boyz Toyz: Sports Video To Mobile Devices Saves Pay TV?

12/30/2010 4:08 PM

Rare is it when a particularly strong niche audience, together with an astoundingly strong programming niche, and an equally strong hardware device type combine to produce a “killer app.” Yet, live sports programming delivered to mobile devices for viewing mostly by young males seems certainly to have captured that rare marketing trifecta.

But what is truly interesting is that a recent study shows this triad of factors may well be what saves pay TV as we know it today. Live sports to boys’ mobile devices - and tied to their pay TV subscriptions - may be one of the few things that abates so-called “cord cutting.”

That is because live sports involving top-level events is the one piece of programming that appears to be farthest away from making its way on to Internet/over-the-top TV (unless it is tied to a pay TV subscription). The reason for that is that its creators and owners - entities such as the International Olympic Committee, the National Football League, and the various college sports leagues - don’t want their programming to transition exclusively to the Internet/OTT genre.

Currently, just the pay TV advertising dollars alone, to say nothing of the monthly subscription dollars, are huge. ESPN alone receives over $4 per month from the subscription payments of most U.S. pay TV customers. These sports rights owners and controllers are perfectly content reaping the dollars and the prestige and other benefits that accompany pay TV and over-the-air mass audience exposure.

Indeed, these sports programming power brokers participate at various levels with the so-called “TV Everywhere” movement - whereby that live sports programming content can also be delivered to mobile devices - only very cautiously, and only if it is still tied to the umbilical cord that is the core pay TV monthly subscription.

And live sports TV, especially the regional sports channels, are the one thing that these young males cannot access regularly and affordably using the Internet all by itself. An example is the “free” streaming of the 64 “March Madness” basketball games CBS Sports allowed pay TV subscribers as part of last season’s NCAA Division I basketball championships.

Another example is that young male in Denver who wants to watch his Pac 10 football in the fall of 2011, and local pay TV, i.e., cable, telco, and/or satellite TV packages, is the one source that is going to get it to him. But it will get it to him, and others across the U.S. like him, only in the form of that core pay TV subscription they are required to pay for.

The point is: there are lots of young males who cherish their sports programming and are willing to pay for it, meaning they sign up for and maintain their pay TV subscriptions, and the rest of the programmers on those packages benefit as a result. In fact, many would argue that the rest of the programmers are merely drafting on the success of live sports pay TV programming.

Also worth noting is the fact that most video that is not tied to a pay TV subscription and is offered on Internet/OTT is delayed, not live. Indeed, unless one has a broadcast TV receiver built into his mobile device, he is not going to see any live sports telecasts, including via Internet/OTT.

But what is truly interesting is the idea that one of these big leagues or one of these big sports rights holders may break the mold and actually get an offer from a Hulu or an AppleTV that they cannot refuse. And if that programming arrangement can offer each party - the viewer, the distributor, the rights holder - essentially what they had when they saw it on pay TV, then tectonic plates begin to shift and PAY TV, WATCH OUT!

As noted in the prior “Mixed Signals” column dated Dec. 15, 2010, strategic implications like these are what makes modern-day TV so fascinating, but also so fraught with dilemma for the existing stakeholders, and so fraught with opportunities for new players coming up with new ideas for this crazy business of ours.

Jimmy Schaeffler is chairman and CSO of Carmel-by-the-Sea-based consultancy The Carmel Group (www.carmelgroup.com).