business news in context, analysis with attitude

by Kevin Coupe

This play is the kind that changes the course of the game ... except that in this case, we're talking about the billion dollar business of sports broadcasting.

Conventional wisdom generally has been that one of the things that traditional media can hold onto in a world where its business has been fragmenting is live sporting events. But that may have changed with the decision by the National Football League (NFL) to make a deal with Yahoo! to allow it to host a live, global webcast of the game that the Buffalo Bills will play against the Jacksonville Jaguars in London on October 25. The deal is speculated to be for seven figures, though no specific amount was cited in reports.

For the NFL, the New York Times writes, "the streamed game is an experiment to understand the complex economics of digital streaming and gauge the audience for watching American football in the rest of the world ... For the N.F.L., the long-term question is how to generate more revenue from streaming games without cannibalizing its lucrative broadcast deals. The foray with Yahoo may be a way of prompting the networks to pay more for rights fees that include streaming rights in the future."

And, for Yahoo, the story says, "winning the digital rights to the popular game is a rare victory against more successful rivals like Google and Facebook, who compete with it for attention and ad dollars."

But it seems to me that only one thing is sure to happen as a result of this move - that in the long run, we're going to see yet another traditional business fall. I'm not talking about the NFL here, but the broadcast networks that have long counted on these games to generate big ratings and big ad dollars. Because at some point, the prime audience for the games may want to watch them someplace else.

I suspect that the games are going to generate big ratings and big ad dollars for somebody ... but it may not be networks.

Forbes analyzes it this way:

"Live streaming online is only growing larger as the millennial crowd is staring to become more interested in appointment programming. While the concept may be – mostly – dead for the likes of traditional, scripted storytelling, it’s still very much a real desire overall. Audiences still want to be part of a shared experience for a specific kind of programming, and live sports are one of those things. Yahoo jumping on the NFL bandwagon before its competition is simply another way it’s proving itself a formidable force to the opposition as the foundation of the digital war continues to be laid, while traditional media continues to struggle."

And another one prepares to bite the dust.

When it happens, it'll be an Eye-Opener. Though, to be honest, neither a shock nor a surprise.
KC's View: