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Big Tech Companies Will Revolutionize Sports Streaming



By: Michael Chang


Recently, some of the largest technology companies in the world expressed their interest in the live sports broadcasting industry, a field monopolized by cable television companies. As the times change, big tech companies are bidding against these traditional cable television companies causing the prices for sports media rights to skyrocket. Supported by credible evidence, big tech companies will make significant leaps into the sports broadcasting industry within the next decade.


For these wealthy technology companies, long-term profit caused the desire to join the established sports broadcasting industry. In 2021, 95 percent of the most viewed television programs contained sports content. With this massive pool of consumers, big tech companies like Apple, Amazon, and Google are willing to bid billions of dollars on sports media rights to profit from the current market controlled by ESPN, Comcast, CBS, DirecTV, and Fox. Some bidding ventures by Apple and Amazon are for media rights from the National Football League, Major League Baseball, and Formula 1.


As of July 2022, Apple and Amazon had not yet secured a bid for a sports media rights package in the United States because some sports leagues apprehended that they would lose views after switching from cable to streaming. Sports leagues had the same fear twenty years ago when sports broadcasting changed from network television to cable television. Eventually, the switch became publicly accepted, and viewership increased notably.


Of significance, these large technology companies earn more money than cable television media companies. According to Bob Iger, the former CEO of Walt Disney Company, the company that owns ESPN, “It’s hard when you’re competing with entities that aren’t playing by the same financial rules.” These words show the perspective of concern the current cable television companies have while competing to outbid massive companies that earn tens of billions of dollars from maintaining market dominance in other industries.


Additionally, the National Football League supports this expensive competition and the industry invasion of the big tech companies. Currently, the NFL is hosting a bidding contest for broadcasting rights of the NFL Sunday Ticket package, which includes out-of-market Sunday football games not shown on local television. Apple, Amazon, and Google are the three big tech companies bidding against ESPN for these media rights.


As the bidding process continues, the NFL’s chief media and business officer, Brian Rolapp, states that “[Apple, Amazon, and Google] are in [a] strong position to … land Sunday Ticket.” Thus, most of the companies in this media rights negotiation are big tech companies, and the NFL’s likeliness of granting the media rights to streaming instead of cable further supports that these wealthy technology companies will be broadcasting live sports soon.


Furthermore, in recent years, entertainment viewership preferences are shifting toward streaming rather than cable television. According to MoffettNathanson, an investment firm that analyzes the television industry, cable television has lost a quarter of its consumers to streaming services owned by big tech companies in the past seven years. Therefore, the avid watchers of these streaming services should increase profits in the live sports broadcasting industry. This shift in entertainment viewership further incentivizes the immersion of companies like Apple, Amazon, and Google into live sports broadcasting.


Since cable television companies have maintained the sports broadcasting monopoly for two decades, the struggle for the large technology companies will be convincing skeptical sports leagues that they can produce high-quality broadcasts for millions of viewers. However, the technology companies have wealth, influence, and an unrelenting interest in sports broadcasting. These traits help them to inch closer to the sports broadcasting monopoly. On Monday, July 18, during the MLB Home Run Derby in Los Angeles, Apple, Amazon, and Google executives socialized with sports leaders at a popular event formerly dominated by the cable television industry.


Large technology companies will most likely make notable progress in streaming live sports within the next decade due to their immense monetary wealth, support from major sports leagues, and the recent consumer revolution from cable television to streaming services.


Regarding the unmatched determination and influence of the big tech companies, Daniel Cohen, a senior global media rights consultant for sports agency Octagon, states, “[The sports media rights negotiations come] down to a Silicon Valley ego thing. I see a road to victory.” As cultures and lifestyles evolve, the sources of entertainment must also amend and progress.



Sources:

https://s3.amazonaws.com/appforest_uf/f1658689623016x685695927358763000/Why%20Big%20Tech%20Is%20Making%20a%20Big%20Play%20for%20Live%20Sports%20-%20The%20New%20York%20Times.pdf

https://s2.q4cdn.com/299287126/files/doc_financials/2022/q1/Q1-2022-Amazon-Earnings-Release.pdf

https://www.sportsbusinessjournal.com/Journal/Issues/2022/02/28/Insiders/Sports-media.aspx

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