Sportsnet Goes Direct to Consumers to Target Cord-Cutters

NHL Game - GETTY H 2016
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Parent Rogers Media is selling access to NHL, MLB and other sports leagues via a $24.99-a-month OTT service as Canadians increasingly abandon the traditional pay TV bundle.

Canada's Rogers Media has peeled its marquee TV sports channel Sportsnet away from its traditional pay TV package to go direct to consumers.

Selling Sportsnet Now as an over-the-top streaming service for CAN$24.99 (US$19.25) per month marks the first mainstream North American TV sports channel to offer live NFL, NBA, MLB and NHL games directly to consumers, Rogers Media announced Thursday.

Scott Moore, president, Sportsnet & NHL Properties at Rogers Media, told The Hollywood Reporter that Sportsnet Now is targeting young cord-cutters and cord-nevers who may buy a bundle of six Sportsnet channels on their own, but not as part of a pay TV bundle.

"With audiences changing, we want to make Sportsnet available to everyone in the country, whether you're a Millennial or a student without a TV set," said Moore.

CBS, Showtime and HBO have decided to offer OTT services, and Starz has talked about going direct-to-consumer outside the U.S. market. But major TV sports channels like ESPN, while talking openly about digital streaming as a game-changer for broadcasters, have yet to go direct to consumers to drive new revenues.

And with cord-cutting picking up in Canada, Rogers Media execs felt they had to bite the bullet with Sportsnet Now to reach hardcore sport fans going online or to their mobile phones for their TV sports fix. "This is a target audience we have to attract, to engage, and so this is an opportunity to do that," Rogers Media president Rice Brace explained.

Brace knows a thing about sports-fan engagement. Rogers Media owns the Toronto Blue Jays baseball club, and has seen young fans increasingly view MLB games on their mobile phones or other digital devices. That's fine for parent Rogers Communications, Canada's biggest mobile phone and high-speed Internet access provider.

But Rogers Media, as the broadcast division, has watched as Canadian sport fans increasingly decide against watching whole games, and their advertising. "They're getting clips, they're getting updates. We have to address that and beat that challenge," said Brace.

What's more, pro sports leagues are no longer hostage to broadcasters as they increasingly go direct to consumers with their own online offerings. Sportsnet Now is priced at $24.99 per month so Rogers Media can match what it makes under its traditional pay TV distribution model as the cost of pro TV sport rights rises and cable subscriber numbers fall.

Rogers Media has long-term deals with major pro sporting leagues in the U.S. and around the world, and so long-standing negotiations over acquiring digital rights are easier today than in years past, said Brace. Back then, pro leagues didn't know how to value digital rights or foresee what an online streamer would look like.

Brace said of current negotiations with sports leagues: "It comes down to what you will pay; they're happy to sell it [rights] to you."