Netflix CEO, Reed Hastings caused a bit of an uproar earlier this month by declaring that sports networks are heading towards availability on-demand. The statement was benched in a broader prediction that all TV will be available on-demand and online within the next ten to 20 years. The online consensus is that Hastings was alluding to a near-term opportunity with Netflix. If true, what could that mean for cable providers and consumers?
There are three layers to look at when considering the assumption.
- Viewers want to watch more sports online
- Sports networks are looking to expand their content access online
- Cable bundles of sports programming today
A study was performed by Frank N. Magid Associates to illustrate how sports fans are viewing content. It showednine out of ten fans reported to watch sports on TV sets, 37% also said they often stream sports online, and 57% said they watch sports online at least some of the time.
Sports fans want to be able to access their favorite teams in the easiest way possible. Unless you are paying for a sports package, that isn’t always possible on a regular TV set at home.
Sports networks are slowly but surely expanding their content online for more viewers to get access. MLB.com is one example of streaming out-of-market baseball games, and the Tennis channel had major success by offering its newer subscription Tennis Channel Plus service earlier this year; they hit their revenue goal in 14 months that wasn’t projected to hit until year four.
This reinforces that consumers are willing to watch content online if it is delivered at a speed and price that meets their needs.
The last concern for cable is the “cable bundle.” A couple examples include: ESPN internet partnering with Dish Network’s Sling TV and offering a sports bundle online for only $20/month, and NFL mobile with Verizon offering the ability to stream live National Football League games for free on mobile devices.
The online stream game isn’t going away, and consumers are getting a taste of TV choices that they aren’t willing to give up.
What if Netflix decides to go all in and capitalize on a trend that is only growing? Netflix has already bet on the future of streaming and on the success of original programming, so why not take it to the next step and say, yes to sports?
Netflix could take the streaming game to a whole other level; they already offer a low rate for consumers with their $8.99/month streaming package and tag on a little extra for your favorite teams to enjoy every Sunday at your fingertips. Now, that’s competition.
What Cable Can Do to Keep Consumers
As stated above, nine out of ten sports fan watch sports on TV sets which shows cable is still in the game and has the opportunity to strength their medium to retain consumers.
Cable needs to be mindful of the customer and their wants which lately are ever-changing in this digital world; the world will continue to change which means cable needs to change with it or be left in the dark.
Content remains king; mergers and acquisitions will continue to happen, but if you provide a solid service at a fair price over the competition then it’s game on.
The two central keys to the game are: access and content—without either the sports packages and streaming capabilities become obsolete. Find a way to provide what the audience wants, at an affordable price without sacrificing your own business then cable could be standing high and mighty at the end of the battle.