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ESPN, Fox, and Warner Bros. Discovery announced plans to launch a joint sports streaming service this fall in the US in a new standalone app, bringing together sports linear networks and DTC service ESPN+. The platform, which will be owned by a newly formed company with its own leadership team, does not yet have a name or a price. This will not be cheap! I’m “guessing” it will cost $40-$50 a month after a special launch price discount.

Note that it will be missing NFL Sunday Night Football and NFL games from Paramount+. It’s interesting to see WBD included since they have no NFL rights, but I guess this means WBD has won the new rights to the NBA. I question whether there is enough sports content throughout the year to support this service.

The new Joint Venture will not be bidding on sports rights on its own, and this announcement does not impact Disney’s plans to bring on a strategic partner for ESPN or impact ESPN’s planned DTC service. Disney says this new sports streaming service can be bundled with Disney+, Hulu and/or Max. Talk about confusion. You’ll have ESPN+, a new ESPN app, and a new sports streaming service that includes ESPN content. This is getting messy.

The news is interesting, but it is far too early to call it a “game changer.” There is so much we don’t know about the service, internally dubbed “raptor”; until we do, we can’t truly judge the potential impact. Here are my questions:

• Cost of service and bundling options with Disney and WBD’s other DTC services
• WBD has no NFL games. Does their inclusion indicate they may have renewed their deal with the NBA? (I’m speculating)
• We know the NFL is the number one viewed sport in the US, but this won’t have Sunday Night Football, which is on NBC and Peacock, Sunday games on CBS and Paramount, and Thursday Night Football, which is on Amazon.
• Paramount Global has rights to the NFL, NCAA Men’s Basketball, the PGA Tour and soccer’s Champions League.
• Many sports are missing from this new JV, and one has to wonder why Paramount is omitted.
• Who’s tech stack will this be built on? Max is very busy with their service and doing many enhancements, and Disney is already laying the groundwork for their DTC ESPN app. I don’t see Disney being able to take on the engineering work; Max might also be too busy.
• What type of ad formats will be offered? Inserting ads into a live stream is not easy at scale; doing it on a personalized level is challenging, as we saw with the NFL Wild Card game on Peacock, where DAI was not used and the ads were burned in.
• How will user data and usage be shared amongst all three companies?
• There are no regional sports networks in the bundle. Will the newly formed JV try to bring that content to the platform?
• All three companies own an equal share in the new JV, but I’m told revenue will not be split the same way. What is the methodology that determines the revenue split?
• Are there enough sports during the year to keep churn low? Many sports fans like myself only watch one sport. Churn could be high as users come on/off the platform for just one sports league each season.
• Will Max strip out the sports option from their D2C service once this new sports service launches? I assume not, but I wonder since they recently postponed charging users for the B/R (Bleacher Report) Sports Add-on.
• Do any of these companies in the JV truly understand what the sports viewership crossover is from one sport to another? Or are they guessing a “sports fan” wants to watch all sports?
• Will independent networks be added over time?
• This does not change the fact that Disney is still looking for a strategic partner for ESPN and plans to offer a stand-alone ESPN streaming app. But does this news change the type of strategic partner or investor they want?

On the company’s earnings call, FOX’s CEO says the new sports streaming service does not plan to add more content partners, saying it’s “not something that we’re considering at this stage.” When asked again, he said they were “not contemplating adding partners to it” and that the 14 linear networks this service offers “gives people a tremendous amount of content.” I’m hearing Paramount, and others were not asked to join because adding a fourth content partner would have made the service more expensive than they think consumers would be willing to pay. CEO says he has “seen some of the prototypes” for the new JV sports streaming service but gave out no other details.

Multiple news outlets report that sports leagues weren’t informed of the talks to create the new sports-streaming platform. Even if you own the rights to the content, you still want the leagues backing this and making them feel like they are a part of it. Lots of questions.

The Netflix episode “Woooooo!” This week, we discuss Netflix’s record Q4 earnings, their free cash flow of $6.9 billion for 2023, their growing AVOD business and their off-the-top rope deal with the WWE as they continue to dominate the industry. We discuss how the WWE deal with “scripted entertainment” differs from sports content, how it will expand Netflix’s advertising business, and what it might mean for a more significant content deal with the WWE when Peacock’s domestic WWE Network deal expires in March 2026.

We highlight new data from Netflix showing that 40% of all Netflix sign-ups are for their AVOD plan in markets where it is offered and the reason why Netflix plans to retire their Basic plan in some of their ad countries. We debate the growth Netflix could have with AVOD in the short and long term, especially with T-Mobile having just converted Netflix’s users to the ads plan in their “Netflix On Us” bundle.

Finally, we discuss what Netflix said about their shift in the mix of content spend, their historical bias to build and not buy content assets, why they are not interested in some of the big linear assets being shopped and the work they are doing to improve ad targeting, relevance and measurement.

In the US, the TV OS market is highly competitive, and there’s little room for new entrants because many of the largest TV manufacturers, including Samsung, LG, and Vizio, operate their OS. On top of that, Roku, Google, and Amazon have established relationships with other brands like TCL, Sony and Hisense. But in Europe, the CTV market is different from the US, and this is where Titan, a new TV OS recently launched with Phillips as its main distribution partner, plans to concentrate their focus. In November, I had the chance to sit down with the Titan team in NYC and hear more about their product and their interest in the European market.

In Europe, Phillips has the third largest market share behind Samsung and LG. Connected TV penetration in Europe lags behind the US, and there is an opportunity to grow with many regional brands that don’t have their own OS. In addition to launching with Phillips, Titan also announced a partnership for branded TVs with Curry’s, the largest electronics retailer in the UK. The European advertising market differs substantially from the US since the continent has over three dozen countries and two dozen languages. Titan has built a network of local relationships with advertisers and agencies to create a new marketplace for CTV advertising built upon a robust data platform that complies with EU privacy laws.

Philips already has a partnership with Google TV but will deploy Titan on most of its models for 2024, including its upcoming entry-level Mini LED and LCD TVs, including the PML9009 Xtra Mini-LED and “The One” LCD (also known as the PUS8909). These TV models are expected to make up >60% of the overall volume of TV sales in 2024. Phillips will continue to use Google TV on the newly announced OLED+959 and OLED+909.

TV operating systems are important in the Connected TV ecosystem because they serve as a marketplace for streaming services, FAST channels, data and advertising. Operating systems build revenue off these lines of business and measure their success by growing ARPU. Growing revenue after the retail sale of a television is a trend over the last decade, pioneered by Roku, with many companies following a similar playbook. Margins in the highly competitive TV manufacturing business are shrinking, so having a recurring revenue stream to bolster profitability is necessary. In the case of Titan, they share recurring revenue with the TV manufacturers they partner with.

We have yet to see any company break out TV OS revenue from the rest of their finances, and almost no TV manufacturer breaks out revenue from their FAST offerings aside from Vizio. If I missed numbers from a manufacturer, please let me know in the comments. I don’t know if Titan plans to release any numbers over time, but it would be helpful for the industry to know the actual market size by region based on revenue.

Titan, based in Barcelona, has no plans to enter the US market anytime soon. Following the launch of Europe, the company plans to expand with Philips into Latin America.

Qwilt has announced a deal with Cirion Technologies to deploy Qwilt’s edge cache software and cloud services across Lumen’s former CDN footprint in LATAM. In 2022, Lumen sold its LATAM infrastructure (network, peering, hardware) to Cirion, one of the few Pan-Latin American networks operating one of Latin America’s most interconnected data center platforms, with 18 owned data centers. Their long haul and metro networks comprise 31,000 miles and over 22,000 miles of subsea network, with 13 Tbps of total CDN capacity.

With this partnership, Qwilt gets full LATAM CDN coverage through the Cirion infrastructure and peering in the region. Cirion gets Qwilt CDN tech and access to their SP-embedded edge deployments throughout LATAM. Qwilt will run this CDN service and jointly sell with Cirion, expanding Cirion’s footprint and CDN services in the region. Neither company is disclosing how much total capacity Qwilt will build across Cirion’s network, but we should expect to get more details as their edge services start to roll out this year.

Lumen has started shutting down their CDN. The company was one of the CDNs in the mix, along with Akamai, Amazon, Edgio, Fastly, and Qwilt, for delivering the NFL Wild Card game on Peacock, with the game being the last big event for Lumen’s CDN network.

Now that the game is over, multiple ISPs are reporting that Lumen has stopped sending traffic, and the de-provisioning of their CDN has started. Lumen had recently refreshed some of their CDN hardware, so some assets are expected to be redeployed for Lumen’s Edge Bare Metal product offering. At the peak of their CDN business, Lumen was generating about $200 million in revenue. Once they lost traffic from Apple and later on Disney, the business started to decline.

In August 2022, Lumen sold off their Latin American operations, including all of Lumen’s fiber assets and data centers in Latin America and their subsea assets. In October of last year, Lumen announced the sale of “select” contracts to Akamai, comprised of about 100 enterprise customers and the “end-of-sale of Lumen’s CDN services.”

For a little CDN history lesson (see www.cdnlist.com), in 1999, Sandpiper, one of the earliest CDNs on the internet, was acquired by Digital Island. In 2001, Digital Island was acquired by Cable & Wireless. In 2002, Cable & Wireless withdrew from the U.S. market and sold the U.S. company to SAVVIS. In 2006, SAVVIS excited the CDN business and sold the CDN assets to Level 3. In 2017, Level 3 was acquired by CenturyLink, and in 2020, CenturyLink changed its name to Lumen.

Thanks to Nick Meacham and Chris Stone at SportsPro for having me on their podcast to discuss the latest sports streaming restraints around technology, market drives for business models, viewership numbers, and the fragmentation and frustration of the current sports fan viewing experience. We discuss:

🏈 The impact of tech on the market, i.e., Amazon (TNF), Google (Sunday NFL Ticket), and Apple (Friday Night Baseball). With so many big tech companies involved, why does sports streaming still have many outages and technical problems?

📺 The reason sports content will never go streaming only due to the licensing deals tied to pay TV, which still accounts for around 90% of total viewing hours in the US for live sports.

👸 The challenges Disney will have in offering a second ESPN DTC service from a pricing, packaging, and bundling standpoint.

💲 The high price of sports licensing costs and its impact on any streaming service’s ability to become profitable from sports content alone.

📈 The importance of CDNs that make live sports events possible, their role in the market and why low/ultra-low latency is rarely used for live sports events.

🏎 Recent content licensing deals and the upcoming NBA, Formula 1, and Diamond Sports Group deals being discussed.

I had a great time discussing what’s happening in the sports streaming market. Note: The podcast was recorded three weeks before Peacock’s exclusive NFL Wild Card game, hence why that wasn’t discussed in detail. Listen here: https://www.sportspromedia.com/insights/podcasts/dan-rayburn-hard-truths-about-sports-streaming-media-technology-podcast/

NFL Wild Card game viewership numbers across NBC, FOX, ESPN, and Peacock are out and pay TV saw record viewership. For all the recent talk of NFL streaming, digital viewership makes up less than 10% of all viewers when the game isn’t exclusive to a streaming-only platform. Pay TV still generates the largest viewership for NFL games and sports.

• 🏈 FOX, 43.4 million (peak viewers) FOX Sports NFL Wild Card game on Sunday, January 14, between the Green Bay Packers and Dallas Cowboys peaked at 43.4 million viewers, making it the best Wild Card game for FOX since 2015. FOX does not break out pay TV versus digital viewership for any of their NFL games.
• 🏈 NBC, 38.3 million (peak viewers) NBC Sports NFL Wild Card game on Sunday, January 14, between the Detroit Lions and Los Angeles Rams peaked at 38.3 million viewers across NBC, Peacock, NBC Sports Digital, and NFL Digital platforms. Across Peacock, NBC Sports Digital platforms, and NFL Digital platforms, the AMA for the game was 3.9 million viewers.
• 🏈 ESPN, 28.6 million (viewers) ESPN’s NFL Wild Card game on Monday, January 15, between the Philadelphia Eagles and Tampa Bay Buccaneers generated more than 28.6 million viewers across ESPN, ABC, ESPN2, ESPN+ and NFL+, ESPN’s second most-watched NFL playoff game. ESPN does not break out pay TV versus digital viewership for any of their NFL games.
• 🏈 Peacock, 24.6 million (peak viewers) Peacock’s NFL Wild Card game on Saturday, January 13, between the Chiefs and Dolphins peaked at 24.6 million viewers across Peacock, NBC stations in Miami and Kansas City and on mobile with NFL+. Peacock had 16.3 million concurrent devices.

Some key takeaways from the NFL and Peacock media call from January 2024:

• The Wild Card game was not part of NBCU’s overall NFL package. NBC Sports executive said, “This is not something for NBC. We bid on it for Peacock separately.”
• NFL’s EVP of Media Distribution: “As it relates to the Wild Card game exclusively, we’re excited to continue the conversation. This is a deal for this year, but it’s an NFL Playoff game. I expect there will be a lot of interest in it.”
• Media question for NFL exec. How much will viewership determine whether you would continue going forward with a game to a streamer in the postseason? Answer: “Certainly, viewership will be one of them. That will be just one of the criteria we think about and look at the opportunities we have going forward.”