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Everyone’s cutting the cord. Then again, maybe the demise of traditional broadcasting has been wildly exaggerated. That’s the reexamination happening after a June 17 Nielsen report showed streaming services such as Netflix and YouTube accounted for just 26 percent of total TV viewing time — while broadcast and cable dominated at 64 percent. “Wild that most TV time in USA is still legacy linear,” tweeted Netflix co-CEO Reed Hastings. CNN’s Brian Stelter wrote in the Reliable Sources newsletter, “Streaming might take up three fourths of the media world’s attention, but right now it’s only one fourth of viewership time. Streaming might eventually cannibalize everything, but that day is a long way away.”
Oddly, much of the conversation in media circles around Nielsen’s June 17 report overlooked the very thing that’s been largely propping up traditional broadcasting: live sports. Streaming’s ascent isn’t solely dependent on winning consumers over with series like Stranger Things, The Mandalorian and Ted Lasso. It’s also very much about the broadcast and cable ecosphere retaining its value as an exclusive spot to watch many top sports. If that goes away, consumer shifts could speed up dramatically. What would it take for streamers to make a huge pole vault by, say, next week? How about an unprecedented experiment from NBCUniversal?
Beginning July 23, the media giant will stream much of the Tokyo Summer Olympic Games live on its Peacock service — for free. It’s not just the less popular competitions but also premium events including women’s gymnastics, and track and field (with men’s basketball on the premium tier, for $4.99 a month or free with a Comcast X1 cable box). The broadcaster’s move may be just as audacious as WarnerMedia premiering tentpole films day-and-date on HBO Max. After all, what NBC paid for this Olympics ($4.38 billion for a four-Games package) is comparable with the cost of Warner Bros.’ 2021 film slate. As such, the decision to stream these Games is one worth noting. It’s a tipping point not unlike how the COVID-19 pandemic pushed movie theaters out of their privileged place of debuting blockbusters without competition from the small screen.
Increasingly, traditional broadcasting’s hold on live sports seems tenuous. Take, for example, the NFL. When broadcasters earlier this year decided to ante up $100 billion for 10 years to retain exhibition rights to NFL games, it seemed to signal the status quo would continue for the next decade. That Disney, NBCUniversal, Fox and ViacomCBS put up so much money (more than twice the value of the WarnerMedia-Discovery deal) makes sense given that NFL telecasts remain incredibly popular. NBC’s Sunday Night Football and Fox’s Thursday Night Football franchises were the top-rated shows on television in 2020 by a comfortable margin.
But the NFL’s new media rights package has a couple of wrinkles. Amazon Prime has now become the exclusive home of Thursday Night Football, reportedly paying $1 billion a year for 11 years. And the NFL has reserved the ability to unilaterally opt out of its agreements with the networks after only seven years.
Meanwhile, some external forces also could factor heavily. As early as November, the major broadcasters are headed to trial against Sports Fans Coalition NY, the entity that operates Locast, a digital app that streams over-the-air television stations. The broadcasters insist Locast is violating copyrights by retransmitting programming without license, while the defendant argues it’s merely taking advantage of a statutory exemption for nonprofits. The legal fight has nuances, but a successful defense for Locast would mean consumers have an alternative way to watch local NFL games without a cable or satellite subscription.
If that encourages sports fans who have remained loyal to linear TV to cut the cord, it could diminish what cable operators like Comcast are willing to pay in retransmission fees. (The major networks receive about $10 billion annually in such fees.) Less revenue, in turn, could lessen what networks are willing to put up for sports rights. At some point, the leagues may decide selling to Amazon, Google, Facebook — or even going over-the-top directly to fans — is more profitable. (Apple reportedly is in talks for rights to the NFL’s Sunday Ticket.)
That NBCUniversal is running hard in this direction to prop up its nascent Peacock service is rather remarkable. While Nielsen’s report was notable for highlighting pandemic consumption habits, it’ll be fascinating to watch the trends from here. As broadcasters take big spectacles like the Olympics to their streaming platforms, don’t assume cannibalization won’t happen rapidly. Not when the future seems clear, and players are desperate to ensure they’ll be around to see it. Let the games begin!
This story first appeared in the July 16 issue of The Hollywood Reporter magazine. Click here to subscribe.
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