By Mihai Crasneanu, CEO
First, we had the fights over the licensing rights for premium movies and TV series from the major studios, which ranged in the hundreds of millions of dollars (see Disney and Netflix).
Then, the spectacular investments in original productions of TV series, movies, documentaries, and animations, this time in the billions of dollars (see Netflix plans to spend $6 billion on new shows this year).
In the fight for differentiation and worldwide market domination that just begun between Netflix and Amazon (and I guess others will be on this list sooner than later), what is next? One piece of content was missing, and the most expensive and exclusive one. Yes, live sports.
In this new game, Amazon hits first, and big. It announced it just closed a $50 million deal in exclusive rights to stream live all the NFL games for 1 year to its 60+ million Amazon Prime members worldwide. It already showed last year its interest for sports, from tennis to rugby.
Others were also bidding for the NFL rights: Google (who has, in my opinion, a very unclear and unfocused strategy, or maybe just unsuccessful, on premium video), Facebook (who recently repositioned its video strategy towards premium original content, after The Zuck had this incredible and unique realization: «I see video as a megatrend») and Twitter (who had those rights last year, but did anyone really noticed?). Amazon ended up paying 5x what Twitter paid the previous year and outbid everybody.
Netflix so far seems to stay away from it. Reed Hastings, its CEO, said that Netflix has no plans to show live sports. And they don’t need to, their exclusive deals and especially their original productions are enough so far to boost their growth and make them market leader in almost every country. When you are already the HBO of worldwide streaming, you don’t need to be the ESPN too soon. But those plans can appear at some point. That could be when Amazon will finish putting together an attractive live sports package, and generate a renewed appeal to its service, the same way Netflix did with their original productions and became a reference for all.
So bottom line, we should expect live sports to enter the streaming arena quicker than expected, as the tech giants are putting more and more money towards content. They are reshaping the media landscape and disintermediating many established traditional players.
And bottom bottom line: what about the life and future of the Pay TV operators (telcos, satellite or cable), especially outside of the US? With premium series and movies way too expensive or not available anymore for licensing, amazing original productions available on streaming services 10 times cheaper and 100 times more friendly and ubiquitous, and now live sports going the same way, what is left to keep its subscribers, let alone attract new ones?
The jewels of the crown – premium movies, premium original series, live sports – are changing hands and morphing into something different. There is hope, and new jewels can be found, or re-discovered. But it takes vision, imagination, guts, efforts and humility to take this new path. Before its too late.