Streaming poses existential threat to cable sports networks
The latest way to watch sports — streaming — has taken off with more people opting out of paying high cable bills in exchange for cheaper online options. The number of so called “cord-cutters” has been steadily increasing each year with 222,000 Canadian households cancelling their cable TV services in 2016.
Major Canadian sports broadcasting networks like TSN and Sportsnet have been losing subscribers and receiving lower ratings from an increase in streaming among sports fans. According to the CRTC (Canadian Radio-television and Telecommunications Commission), TSN lost approximately 200,000 subscribers from 2011-2015 and Sportsnet saw an even bigger loss of nearly a million subscribers.
Networks who offer streaming online, such as Sportsnet NOW, still require a cable subscription, defeating the purpose of why many people have opted for streaming over cable. While illegal streams have plenty of drawbacks, such as buffering, poor quality, and potential adware, they have improved over the years. As the sites who offer the streams gain popularity, they are also generating greater ad revenue, making it more attractive as a business.
And Canada is not the only country experiencing this phenomenon. The U.S.-based sports channel ESPN has also been hemorrhaging subscribers, losing almost 13 million in the past six years. This loss cost the company next to $1 billion in revenue and led its own executives to turn to streaming services.
The biggest challenge for broadcasting networks is their reliance on cable subscriptions. With programming costs skyrocketing, sports networks are scrambling to increase revenue and cuts costs. It remains to be seen if revenue from subscriptions will offset their expenses, but due to the rising popularity of streaming it was a risk that needed to be taken. In England, rising costs of the Premier League have been a hot topic, with the multi-billion dollar deals broadcasters have signed for the rights to the league resulting in a major increase to consumers’ cable bills. Fans who wish to watch every game are also forced to get multiple channels, costing consumers more money. This changing landscape has resulted in many cutting the cords entirely and turning to streaming sites, where they have access to every game for no additional cost.
The Internet is a direct threat to cable sports stations, and not just in the way consumers view live sports. We now have the flexibility to pick and choose which highlights we want to see online wherever and whenever we want, rather than waiting for the highlights for a specific game to appear on television. With consumers always looking for ways to save time, this is another reason why sports broadcasters are wary of the growing threat of the Internet on their business.
The question facing sports broadcasting networks remains the same:
Will they adapt to the changing landscape, or is the future of sports broadcasting solely online?
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