Just when I thought I would have a reprieve from writing about the total disruption of traditional media, think again.
As covered in past articles, there are three things that basically are keeping broadcast television alive:
- Baby Boomers
- Big Pharma advertising dollars
- Live sports
The first group is aging every day along with many departing each day. Big Pharma still spreads around the majority of the money, especially to cable news outlets.
It is the final area that this article will focus.
Tech Companies Taking Over Sports
We have seen Apple and Amazon getting into the sports game. They have contracts with both MLB and the NFL.
It will be interesting to see how things change when the major contracts come due. The NBA has one coming up, one that is presently on ESPN. This network is suffering meaning a loss of those rights could be horrific. However, do they really have enough money if Amazon or Apple really wants it?
One a smaller scale, we see moves being made by Netflix.
The first splash was the contract it signed to air the WWE. While this is not technically sports, it does appeal to the many of the same fans.
This is a 10 year, $5 billion agreement. It removes the broadcast for USA Network. Naturally, this is not a major player but it does show the trend.
Now we have a fight announced that is going to be aired on Netflix.
Is this a gimmick? Perhaps. Mike Tyson is 57 years old so it might not be a very competitive event.
The point is not the caliber of the contest. What is important is that it is entering the realm. Some of us remember the days when ESPN was known more for the truck and tractor pulls rather than the NFL or MLB.
Netflix could use this as its first foray into live sporting events.
We can see how this is starting unfold.
The List Is Getting Shorter
As stated, the Baby Boomers are declining in number. This is a trend that is not going to reverse. The Millennials, let alone GenZ, are not traditional television watchers.
Hence, we can cross this off the list since it is a matter of demographics. The result is simply a decline over the next couple decades.
Advertising dollars follower the viewers meaning, at some point, this will become an issue. For the moment, it is not fatal to the networks.
That leaves the last. We can almost guarantee this is going to get eliminated. The NBA contract is worth watching. It is evident Netflix is starting to enter this realm, something that should worry the broadcasters. While it cannot compete with the likes of Amazon, Apple, or Facebook, it can take on ESPN or TNT.
Is that something it is willing to do? Only time will tell.
The key to remember about disruption is that it starts on the fringes. There was a time when CBS, ABC, and NBC has the dominate sports departments with ESPN being a joke. By the mid-1990s, that was not the case.
NOW we are seeing another transition.
To me, the fact it is happening before our eyes is fascinating. We can see the path this is traveling. It is likely the executives at the traditional broadcast entities see the same thing. The difference is they are powerless to stop it. This is how disruption works.
The time to snip Netflix was a decade ago. Now it is too powerful as compared to other media outlets. It is only a matter of time before it starts to asset itself.
In the end, it might only be the 3rd in line behind the double A's. However, that is still going to reign supreme over any of the major broadcast institutions.