Migration Of Sports From Traditional Television To Streaming Is Chugging Ahead- The NFL Sunday Ticket On YouTube
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The deal with The NFL Sunday Ticket cements YouTube, a division of Google, as a growing force in online and TV streaming.
The agreement
The company that started out as a website offering user-generated clips with little curation now also sells cable bundles and the best sports shows it was once meant to supplant. On Tuesday, the National Football League was in advanced talks to grant YouTube exclusive rights to the NFL Sunday Ticket, a subscription-only package that allows football fans to watch most Sunday afternoon games.
YouTube will pay an average of around $2 billion a year to secure the rights to the NFL Sunday Ticket franchise.
What is The Sunday Ticket?
The Sunday Ticket is a subscription-only package that gives customers access to all Sunday afternoon matches from non-market teams. The NFL is eager to form media partnerships with tech companies, which broadens the pool of potential bidders whenever rights deals come up.
YouTube will offer the Sunday Ticket as an add-on to YouTube TV and on the video platform's main app through a service called Primetime Channels, which allows viewers to subscribe to individual channels.
Current owner of rights
DirecTV currently pays the National Football League an average fee of $1.5 billion per season for both residential and commercial rights. His contract expires at the end of this season. The current rights holder DirecTV has approximately 13.5 million subscribers. However, like all other cable and satellite providers, it has been hit hard by cable cuts as more and more consumers turn to streaming.
Major sports are migrating
The potential move of the Sunday Ticket to YouTube is further evidence that major sports are migrating from traditional television, which has been hit by cable cuts, to streaming and tech companies willing to spend a lot on content. Amazon.com Inc. has its own NFL deal while Apple Inc. broadcasts some Major League Baseball games and has a new Major League Soccer deal. Amazon and Apple also kicked the Sunday Ticket tires.
Even Netflix, which has said it has no interest in acquiring major sports rights to its streaming service, has explored acquiring rights to niche sports and even taking stakes in leagues.
Why is it good deal for YouTube?
The addition of a Sunday ticket would provide a boost to YouTube streaming as the video platform tries to expand beyond ad sales to subscription revenue. YouTube's advertising business fell year-on-year for the first time in the third quarter after a series of rapid growth during the pandemic.
YouTube situation
YouTube has recently become a go-to destination for TV viewers, surpassing Netflix Inc. as the most watched streaming service on TV for the first time earlier this year, according to Nielsen data.
YouTube TV, an online bundle of cable channels for $64.99 a month, surpassed more than 5 million subscriptions and trial accounts in June. The Primetime channels, which launched in November, allow viewers to subscribe individually to more than 30 streaming services, and the Sunday Ticket would be offered as an add-on to both services.
Problems for traditional television
Traditional TV networks continue to make big NFL rights deals. CBS and Fox air Sunday games, while NBC and ESPN air prime-time games on Sunday and Monday, respectively. The NFL has signed long-term deals with its partners that collectively are valued at over $100 billion.
There are signs some traditional media companies are struggling to keep up with the rising costs of sports rights deals, especially given the high amounts tech companies are willing to pay.
Google share prices
Google should see higher stock prices due to increasing internet usage and ad revenue.
This week, stock prices fell from 90.25 to 88.26. Thus, this is the worst week in the current month.
Source: wsj.com, finance.yahoo.com
