Verizon's $2 billion NFL mobile rights deal marks a major change in the streaming sports landscape. Verizon has long paid handsomely for exclusive mobile rights to NFL games, but the newest arrangements signals a shift in strategy. While previous deals restricted mobile NFL viewing to Verizon customers, now anyone on any network can watch the games, provided they do so on a Verizon-owned platform like go90, or Oath properties like Yahoo Sports.
For decades, most TV companies have sold their product through middlemen, mostly cable or satellite providers, bundling their channels inside of a larger lineup. As consumers cut or trim their cords, the value of the bundle erodes somewhat. It's becoming clearer that companies need to build a direct relationship to consumers.
YouTube video consumption in October was up 27% year over year, with similar figures in September and (so far) in November. Pivotal Research group's Brian Weiser crunched the numbers in a recent research report and came to the conclusion that YouTube views are equivalent to 13% of all TV consumption, when monthly viewership hours are compared in a roughly apples to apples fashion.
For consumers, the world of over-the-top video is flush with opportunity: the chance to cut the cord and save a little money, a video experience with an intuitive and simple user interface, and all the content one could want, on-demand and at your fingertips. But the OTT landscape is also incredibly confusing, with a dozen "skinny bundles" like Philo and FuboTV offering pay-TV-like services, and even more services offering single channels, like HBO Now and CBS All Access.
If there was one theme that would sum up the quarterly financial earnings calls of the big television companies this past quarter, it would be "over-the-top is coming, and we are ready for it." Whether these companies really are ready will be up to consumers to decide, but there is no question that just about every traditional media company is now betting big on OTT.
While many large streaming services try to be everything to everyone by having enormous libraries of content, we are now seeing a new wave of OTT startups targeting more niche audiences. Karma, an over-the-top streaming service that founder Karam Hinduja describes as "The Economist for the next generation, on video," officially launches today.
2018 is shaping up to be a pivotal year for over-the-top video. Amazon and Netflix are ramping up their spending on original content, while OTT bundles from YouTube and Hulu are expected to make a big consumer push. Traditional television companies, meanwhile, are building out streaming services of their own.
Live sports, long the linchpin for the traditional television bundle, appear to be finally finding significant viewership online, if early data from this year's Major League Baseball playoffs and Amazon's "Thursday Night Football" simulcasts are any indication.
The video landscape is undergoing sea changes, and a lot of major players with deep pockets are trying to figure out how to compete. It's easy for us media industry folk to lose sight of the fact that roughly half of all TV households across the country have no DVR and half have no streaming services. And the number who have top-tier cable packages is declining. CBS All Access, Disney/ABC, and others are putting down markers, trying to gain a foothold into this new media world. There's more room for them to thrive than many seem to think.
My wife found it infuriating that CBS' new "Star Trek: Discovery" is so good. Having recently seen the series premiere on CBS, we can't watch subsequent episodes unless we subscribe to the CBS All Access streaming service.