Inside sports business
In a move years in the making, ROOT Sports Northwest is offering Mariners fans who are “authenticated pay TV viewers’’ the chance to live-stream games on their mobile phones.
This isn’t the be-all, end-all package one might expect — especially for Seattle-based fans that pick up ROOT as part of a Comcast subscription. Yes, you actually need a cable subscription to stream the games, and our local Comcast platform has chosen not to participate.
But this is a start for some fans in Washington, Oregon, Idaho, Montana and Alaska. Compared with where Major League Baseball was just a couple of years ago on the topic of a Regional Sports Network (RSN) offering live streams via mobile phones, this is a seismic event. ROOT has been trying to do this for eight years and got MLB approval only now.
You see, nothing terrifies sports leagues and the TV industry more than unknowns. And where so-called Over The Top (OTT) streaming goes, this is the next frontier threatening to disrupt TV sports as we know it.
We’ve discussed at length the “cord-cutting” by younger viewers disrupting the cable-sports model. ESPN recently laid off roughly 100 on-air personalities and print journalists as a response to its subscription base declining from about 100 million viewers to about 88 million in a little more than five years.
It seems folks are tiring of $200 monthly cable bills and would rather stream their favorite TV shows via cheaper options such as Hulu or Netflix. But live sports have largely remained immune from that trend.
Until recently.
OTT is a huge curiosity. Imagine forming your own sports network without the overhead costs of a traditional broadcast outlet. That’s something billionaire Los Angeles Clippers owner Steve Ballmer — who has the spare cash to try new things — mused about doing when his cable-TV rights deal was up for negotiation.
Ballmer talked of going OTT in lieu of a traditional cable-TV contract.
Ultimately, his sanity prevailed and he created his own OTT network as a supplement to his team’s RSN. Even Ballmer knew he wasn’t going to generate nearly the revenues from an OTT streaming network as he would from a traditional broadcast outlet.
Not yet, anyway.
But we’re getting there. We just saw Amazon pay $50 million to get in on some NFL games via live streaming. The truth is, you, me and the guy slinging drafts at the corner tavern can form our own OTT network and start bidding for rights to sports events without the massive investment in cameras, studios and talent that it used to cost.
This is what leagues and TV networks have long feared. That the so-called “a la carte’’ options for sports fans would actually become viable.
Up to now, if you want to view live sports, you’re forced to buy a cable-TV package. Now, there are packages of sports being made available over the internet that you can purchase without having to sign up for the gardening channel on your local cable platform.
Put yourself in the Mariners’ position. They’ve owned a 71 percent stake in ROOT Sports NW — with DirecTV occupying the remaining 29 percent — since 2013 and spent big bucks renewing Felix Hernandez’s contract, signing Kyle Seager long term, locking up free agent Robinson Cano for a decade and then adding Nelson Cruz to boot.
Virtually anybody on the Mariners worth a darn was retained not via homegrown talent grooming but with huge cable-TV money they assumed would be there for years. And they are not alone around baseball, where money has always talked the loudest of any major professional sport.
So, naturally, MLB was reluctant to embrace OTT streaming that threatened its cable-TV cash cow,
What’s happened? Reality. Like any tidal wave, you can run away from it for only so long.
Sure, the current internal network studies show watching baseball games on mobile phones amounts to mere “transitional” viewing. If people are away from home, they might watch an inning or two, but will almost always revert to the 70-inch big screen if offered a choice.
Still, there’s concern. And it’s not millennials who are causing the worry, as their jobs gradually become better paying and they, too, cave and buy the same TV sets we’ve always enjoyed. No, as fun as it is to blame millennials for everything, they probably won’t be the ones to bring this system down.
That falls to the teenagers coming after them. The ones now glued to their phone like a best friend. Who never grew up watching TV on a screen bigger than the palm of their hand.
They are the ones that won’t be buying the 70-inch TVs. And though their impact is years from being significant, the folks with business foresight know joining them will be easier than beating them.
That’s why ROOT Sports just introduced streaming as a value-add for current customers. Sure, giving them extra options to watch games never hurts.
But if streaming ever becomes the only option, you can bet billion-dollar TV companies want to be ahead of that curve.
