Where the NFL Can't Get on the Field

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Welcome to Telogical Talk, a weekly series where we analyze a slice of the competitive intelligence data collected by the Telogical research team.

Professional wrestling fans have long-accepted the fact that script writers generate the soap-opera story lines and carefully-rehearsed choreography determines what happens in the ring. More recently, those fans accepted (and paid for) WWE Network, a $10/month service and one of the earliest success stories in direct-to-consumer OTT video

Launched in 2014, WWE Network just surpassed 2 million subscribers, and Wall Street is bullish on this "pure" D2C play. In the past month alone, WWE matched Netflix's 10% stock run-up.

Unlike vMVPD products that suffer thin video margins, WWE controls its content library and manages the product from production to distribution.

.WWE planted seeds for the next-generation of fans with a Scooby-Doo crossover movie in 2014, a favorite of the author's children

With linear sports entertainment taking an outsize role in driving video product offerings, Telogical took a look at some of the recent moves being made by key stakeholders. A variety of strategies have emerged from the headlines.

Data and Discussion

Subscription-based video content distribution comes in three forms: 

  1. Traditional, linear cable networks
  2. Streaming aggregation services (with ties to traditional model)
  3. Standalone D2C streaming services 

The second and third categories are where all the interesting action is taking place, but reliance on revenue from the traditional model maintains a "status quo" effect for much of the sports entertainment world.

NBC Sports Gold Logo.png
ESPN Plus Logo.jpg

ESPN+ made a splash with its April debut, but the $5/month streaming service was derided by some as mostly aggregating "castoff" content too niche or random to attract subscribers. With its just-announced multi-year deal with UFC, the ESPN+ strategy of acquiring exclusive content for its D2C becomes more clear. Additionally, ESPN+ will serve as a buy-through platform for UFC's $10/month "Fight Pass," 

While ESPN+ attempts to build exclusive content to justify its price, NBC Sports Gold serves as a platform for customers to purchase league passes exclusive to NBC, such as Premier League, Rugby, Cycling, Motorcross and, just announced, Ice and Speed Skating. US Ice Skating's decision to abandon its D2C OTT platform and partner with NBC reflects the distribution challenges faced by content producers. 

Chart: Options to Stream Selected Sports

For the moment, the big-4 sports leagues in the U.S. seem disinclined to fully embrace D2C streaming services. While MLB, NBA, and NHL all offer D2C products, they only cover out-of-market games. Meanwhile, the NFL remains firmly in the traditional model, having tied up its programming with satellite-provider DIRECTV's Sunday Ticket. (Ironically, DIRECTV NOW customers cannot purchase Sunday Ticket as an add-on to that service.)

While MLB allocates a very limited number of streaming-exclusive games to companies who bring a large bag of cash to its door, major sports leagues have no interest in killing the "golden goose" of affiliate fees flowing from the traditional model of national and regional sports networks.

Meanwhile, smaller sports entertainment properties continue to partner for traditional and streaming distribution rather than pursue the standalone D2C streaming path. Not everyone can bank on the star power of, say, WWE's John Cena, to power a D2C service to success.  

At Telogical, we’re always studying the competitive landscape. If you have a topic you’d like to discuss with us, please reach out. We look forward to working with you.

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