The distribution of live sports content has only become more fragmented in recent years, as the top U.S. pro sports leagues and college athletics, combined with the major broadcast networks, aim to keep pace with viewers’ change in consumption habits.
Enter the skinny sports bundle, the hottest phrase entering the media lexicon as industry executives grapple with the next phase of the streaming wars.
“The question will always be, does it cover everything or does it cover enough of all the places where sports are currently distributed?” asked William Mao, senior vice president of media rights consulting at Octagon. “Even when the skinny cable bundles came out — YouTube TV, Fubo, etcetera — all of them seemed to be missing one piece of the “puzzle” to complete the set.
“That’s a function of the cost of trying to aggregate, distribute and have all of the offerings in one place, not only from an acquisition — so you have the rights to offer it — perspective, but also the price point you put out in the marketplace for consumers to have that willingness to pay.”
John Kosner, ex-ESPN executive and President of Kosner Media, told Sports Media Watch that there are three challenges in creating a sports package capable of replacing the traditional cable bundle for most sports fans:
— Is the product comprehensive and substantial enough that it includes everything currently available on linear television (e.g. excluding technology companies’ platforms such as Amazon, Apple, Netflix and YouTube)?
— Second, will the price result in widespread consumer adoption?
— Lastly, and the most difficult challenge, Kosner said, is the product compelling enough to recapture cord-cutters and attract cord-nevers?
In January, Disney, Fox Corporation and Warner Bros. Discovery abruptly announced the shuttering of Venu Sports, a sport-specific streaming option that could have served as an all-in-one service in the future, excluding live programming located on the technology platforms.
Initially, Venu received legal pushback from Fubo, which argued the joint venture violated U.S. antitrust law. Fubo later dropped its lawsuit as part of a merger deal with Disney, seemingly paving the way for a potential launch of Venu.
Executives interviewed for this story expressed a mixed bag of reactions to Venu closing its doors. Kosner, who worked at ESPN for two decades, said Venu “wasn’t comprehensive enough for most sports fans.”
He noted that the abandoned service included only some components of the NFL and NBA media rights packages, along with parts of the NCAA men’s basketball tournament. In addition, the service did not include any Olympics coverage or final rounds of professional golf, he said.
“I didn’t understand who that product was for,” added Kosner, stating that maybe both Paramount and Comcast would have executed deals to put their sports programming on the direct-to-consumer offering.
“It’s not just about what does it cost,” he explained, “but who are you serving? Most sports fans who want to spend money on a subscription want to buy something specifically. They want to purchase Sunday Ticket, the English Premier League or NHL Center Ice. I don’t think that they want to buy portions of different things. The harder it is to explain what you’re buying, the less likely it’s going to be successful.”
Kosner and Mao both identified possible messaging challenges and consumer confusion that ESPN would have faced as it tried to market Flagship — its soon-to-launch streaming service that will be “a sport’s fan dream,” according to Disney CEO Bob Iger — and Venu in 2025.
On Disney’s earnings call Wednesday, Iger said after the decision was made to launch Venu, skinnier bundles emerged and “Venu basically looked redundant to us.” The timing served as an opportunity to make ESPN available in skinny bundles as well as fold its Hulu + Live TV business into FuboTV and create a new entity that will be 70% owned by Disney following last month’s merger — the new venture with Fubo currently has over six million subscribers.
Iger explained that he wants to make ESPN “as accessible as possible and in as many ways as possible to the consumer.” He continued, “Some will want to consume it just through an app. Some will want to consume it as part of the more traditional, expanded, basic bundle. Some will migrate into in the direction of skinnier bundles or sports bundles only.”
Patrick Crakes, a sports media consultant who previously worked at Fox Sports as a research and insights executive, said the Disney-Fubo deal represents an understanding that there needed to be content placed in more varied digital packages to better grasp consumer preferences.
“Maybe there’s a product that goes to 25 million people, a more specialized option that goes to 15 million and a super expensive, highly customizable product that costs a lot but it appeals to crazy sports fans, that goes to three million people,” hypothesized Crakes.
Meanwhile, last month, DIRECTV debuted a sports-centric skinny bundle of its own, featuring ABC, NBC and FOX along with the big sports cable networks. The service is initially offered for $50/mo before increasing to $70/mo following the three-month promotional period.
Comcast also recently announced a forthcoming sports and news skinny bundle that will include access to the national sports channels and other news and broadcast networks, among additional offerings.
On Tuesday, Fox Corporation CEO Lachlan Murdoch announced plans to launch a direct-to-consumer subscription streaming service — which would include sports and news programming — by the end of 2025. Fox would be the final network among the big four corporations to make its sporting events available via a streaming offering.
“I do think that fans want the ability to be able to buy the whole thing, or as close as they can get to it, rather than have to do multiple different packages to stitch together what they largely had in the pay TV ecosystem,” Kosner said.
As Mao highlighted, the Southeastern Conference lives exclusively on ESPN platforms, including ESPN+ and the SEC Network, making it “more the exception versus the rule” in terms of how many places a particular league or sport is distributed.
“The fragmentation of where rights are being distributed, multiplied by the existing fragmentation that was based on the fact that there are so many different sports networks out there already, will naturally make it more difficult to aggregate everything together in one place,” he said.
In other words, make sure you have your login passwords memorized, or at least saved, because a fragmented sports media environment appears to be the future — for now.
