Hugh Scallon’s Post

Netflix succeeds through brand transformation, and the company’s agreement to stream NFL games on Christmas is a great example.   On May 15, Netflix announced plans to stream the NFL’s two Christmas Day games in 2024. This launch is part of a three-year deal, with the streaming service set to broadcast at least one Christmas Day game in both 2025 and 2026. This is big for Netflix: according to the NFL, last year’s Christmas Day games were among the 25 most viewed programs in 2023.   Airing games through connected TV is nothing new for the NFL, but Netflix has only recently entered the waters of live sports. It is impressive how quickly Netflix is becoming a sports brand. The company did not get involved with live sports until it aired the Netflix Cup in November 2023. Since then, the company has made up for lost time. In January, Netflix said it will begin to air the WWE’s flagship weekly program, “Raw,” starting in January 2025. And now comes an agreement with the NFL.   Netflix’s brand transformation milestone are impressive: 1. From DVD rental to streaming service. 2. From streaming service to movie production studio. 3. From subscription service to ad-driven business. In addition to launching in ad tier in 2022, the company announced its own in-house AdTech platform at the TV upfronts on May 15. 4. And now becoming a sports business.   These transformations do not necessarily surpass the previous ones. You can still stream movies and television on Netflix without experiencing any of Netflix’s original content, and enjoying sports need not be an either/or choice with non-sports entertainment. As for advertising: yes, you can subscribe to an ad-tier model, but advertising is certainly a major component of live sports. Analyst Guggenheim predicts that Netflix will earn approximately $185 million in direct advertising revenue from the NFL games.   Meanwhile, shares of Netflix stock are up 80% in the last 12 months–an impressive outcome born of brand transformation. #Netflix #NFL #LITrendingTopics #Sports #TheInsider #Streaming #Advertising #Brand https://lnkd.in/dAD53Eku

I couldn't allow the week to end without commenting on the NFL deal to stream Christmas Day games on Netflix. Last year the NFL broadcast on Christmas Day for the first time (outside a Sunday) in a space traditionally held by the NBA. Needless to say its audience blew the NBA away, and being the NFL, it has now exploited rapidly a new revenue stream by carving out a Christmas Day package for Netflix. First of all this shows the power of the NFL - in any other sport its broadcaster contracts would clearly define what other rights it can exploit. Either the NFL carved out Christmas Day when it was doing its major broadcaster deals (in which case why did no one bid then?), or it has the freedom to add additional packages as it sees fit. This comes off the back of the successful NBC/Peacock streaming of a playoff game last season, and its Amazon Thursday night package. From an NFL's perspective, increasing the number of exclusive streaming packages is the way to maintain its upwards rights fee trajectory, especially given ESPN's falling subscriber base which has to inevitable feed through to its ability to pay for rights. The EPL will be taking note. But why Netflix? Following Tyson v Paul Celebrity Boxing (I fear for Mr Paul) and WWE Raw acquisitions, now an NFL experiment. The Netflix juggernaut is slowing and needs some more gas. It got a boost from Covid, then removing sharing options, and then a new Ad tier. But all these innovations can't hide the fact that its early markets trend subscriber growth is slowing (Netflix will stop reporting subscriber numbers next year, always a sign of problems), and content consuming is falling (people have seen everything apart from the new stuff itself limited by the writers strike). And how many more "Drive to Survive" copies can we cope with? In the past Sport has been a driver of new distribution platforms but it was drama for the streaming platforms. Something that caused the likes of Sky Sports and Disney to reduce their dependence on live sport. However, people still watch sport in greater numbers than anything else. It is regular, it attracts a younger more male demographic (Netflix is female skewed), and it is unscripted so can be watched year after year. Prime is a marketing tool, Apple TV supports hardware sales (though this is shifting). But Netflix has is wholly dependent on content sales. Rather than be surprised by Netflix's move into sport, we should be surprised its taken it so long. Who is next? https://lnkd.in/eU93fWmp

National Basketball Association (NBA) TV Deal Winners and Losers Winners: 1. NBA Owners. Big money. Owning professional sports franchises are good business, this deal makes it even better for NBA owners. 2. NBA Players. Players get 49%-51% of basketball revenue. The nearly 3x increase in TV $$$ will likely send the salary cap up 10% annually during the duration of the deal. Good for them. 3. Seattle and Las Vegas. Getting the TV deal done opens the door for expansion, which will undoubtably include long-suffering Seattle and sports upstart Las Vegas. Expect owners to move quickly. Losers: 1. Fans. Massive disaggregation of games across TV, cable, and, apps. Nothing about this deal is fan friendly on the surface. The product is likely to get worse too as TNT exits and ESPN continues to cost cut. (The fact the NBC Sports/Peacock is involved garuntees that the product will be worse overall). It’s a money grab of owners and high CAC acquisition vehicle for streaming services. Sorry fans. Note: I will be interested to see if Prime Video & Amazon MGM Studios does something interesting with NBA League Pass. It’s a massive opportunity to engage the super fan. At a minimum, I am confident they won’t screw it up like ESPN did with the National Hockey League (NHL) out-out-market where the product became dramatically worse. There some hope for fans. Prime Video NBA League Pass could be the bridge to the disaggregation of the NBA experience. 2. WNBA. Stand alone rights likely would have went more more $$$ and the league probably could have gotten better exposure at a time when things are moving in the right direction, but they were an afterthought in the deal the NBA made for itself. Sort of a quiet setback for women’s sports. 3. Warner Bros. Discovery Just sort of another (embarrassing) mishap on a ship that was sinking from the start. But what can more you expect from a company that pays its CEO $50M a year with a true market cap (market cap less debt) of negative $20B. Good riddance. #ott #streamingvideo https://lnkd.in/gHdd5SrC

Update: Venu Sports shuts down. Fubo comes out on top and consumers win by gaining much needed simplicity in the streaming space. -------------- Big News in the Streaming World this Week: Disney’s Hulu + Live to Merge with Fubo. Wasn’t Fubo just suing Disney to prevent them from teaming up with Fox and Warner Brothers to launch Venu? Now Disney is merging their Hulu + Live business with Fubo. Let’s break it down: The Gist: Fubo filed a lawsuit against Venu (a potential new joint sports streaming service between Disney’s ESPN, Warner Bros. Discovery & Fox), claiming antitrust violations.   Venu agreed to pay Fubo $220M to dissolve the dispute. Additionally Disney agreed to pay Fubo a $145M term loan in 2026. Takeaway:  Venu & Disney preferred to pay up rather than:  Risk legal scrutiny of potential antitrust issues with their new streaming service & face obstacles in moving forward with Venu. Some see this as a signal that Disney is all-in on streaming. If Venu launches, Disney will own a significant stake in three different sports streaming services. 1. Hulu Live + FuboTV  2. Venu 3. ESPN+ Others are watching closely to see how quickly Disney sells down its stake in Hulu Live + FuboTV, revealing their true intentions and commitment to this venture. What does this mean for viewers? Potential Pros - Programming consolidations, customizable bundles, more leverage in negotiations with rights holders - maybe the savings will be passed on the consumers? Potential Cons - Less competition could lead to higher prices, increased complexity? How much more complex can this all get? It's already confusing enough. Do you think this will be a win or loss for consumers in the long run? What else did I miss?

Not EMARKETER giving me the mic to talk 👀 in their latest piece, I chat about how brands can make the best of a gameday glitch. From Netflix’s Love Is Blind “live reunion” meltdown to the infamous Mike Tyson vs. Jake Paul broadcast glitch, we’ve all seen how quickly things can go sideways. And with Netflix’s NFL Christmas Gameday (featuring Beyoncé at halftime!) just around the corner, brands need a strategy to shine—even if the stream doesn’t. Here’s how to turn chaos into your moment: ✨ Prepare Like It’s the Super Bowl Have pre-approved content templates, tone guides, and creative assets ready to go. Align legal and creative teams early to avoid game-day delays. 💡 Social Listening is Your MVP Monitor TikTok comments, Threads, and YouTube streams alongside hashtags to anticipate trending conversations. Build a keyword list for top themes (hello, Beyoncé and holiday vibes). 🔥 Embrace the Unpolished A witty, raw response can outperform a million-dollar polished ad. Empower community managers to take bold, calculated risks—real-time banter wins hearts. 🎯 Turn Glitches Into Gold Use downtime to entertain with mini-series updates or “how it should’ve gone” parodies. Engage audiences with polls, memes, and lighthearted holiday content to keep them hooked. The brands that win aren’t just fast—they’re bold, strategic, and human. When chaos is expected, the opportunity is to lead, not just react. thank you Emmy Liederman for including me. - 👋🏾 I'm Jazmin, founder of que lo que? —the agency where scrolling, eavesdropping, & social listening are our thing. | visit queloque.co 🌟

#PeakSports: The NBA Has Maxed Out; Owner Promotes Tequila I just watched this clip of the current #BostonCeltics governor (the new PC term for lead owner of a team) Wyc Grousbeck on #CNBC. Funny thing I learned, he's sold over 2 million bottles of his own tequila. Also, in the interview, he said his family is simply doing some estate planning and they want out of Celtics ownership. As I intimated last week, while it's very plausible estate planning is a driving force behind them deciding to sell the team, people do not sell assets they think are growing at massive rates—especially when there's little downside like there is in sports. But the Celtics ownership IS selling. That likely means they don't see this franchise 10x'ing anytime soon. And they're right. Do you know why? The NBA has maxed out its media rights. They will never see more money (inflation-adjusted) for their U.S. rights than what they're getting in this 11-year, $76B deal that runs from 2025 to 2036. In the deal, as reported by The Wall Street Journal, new partner #NBC is paying $2.5m per game for 100 NBA games a year. That's $2.5B a year on average. For the sake of argument, let's assume NBC can make that money up through ads, streaming subs, and paying TNT a whole lot less money on the Comcast side! 😅 But how on Earth will NBC be able to offer more money in 2036? The cable bundle is currently dropping 8% YoY. SVOD subscriptions in the U.S. are moderating. There aren't more eyeballs to go after in our flatlining population. Even if there were more eyeballs to be had, Gen Z and Gen Alpha don't seem to care much for sports. If you thought giving it to them for free via streaming and/or on-demand might work, the best premium seller of digital ads, Hulu, is seeing its ad revenue decline. Or if you believe vMVPDs like YouTubeTV are the answer, think again. They just saw their subs dip for the first time as NFL Sunday Ticket users churned out as soon as the NFL season was over. And if the NBA was relying on more Big Tech companies coming into the market to save them, it's unlikely that'll be the case. With the move towards consolidation, the intense Big Tech battles they've been prognosticating have already materialized. By 2036, you'll probably have 3 bidders interested in sports, all of whom will have commoditized sports on their platforms by then. Of course, the NBA could grow in other ways, but only internationally with either more fans, or more international investment. But the odds of either of those options benefiting U.S. viewers, U.S. media companies, or even team owners are low. This is why after watching this interview, I can see why Wyc appears more excited about his rising tequila brand than he is about further owning the Celtics!

🏒 📺 The Dallas Stars are the latest team to break the mold and leave the traditional regional sports network apparatus, announcing this week they are terminating their agreement with Diamond Sports Group-owned Bally Sports Southwest before it ends next year. In its place, the Stars are partnering with media company A Parent Media Co. Inc. (APMC) on a seven-year deal to offer its games for free to local fans in Texas, Louisiana, Arkansas and Oklahoma via a FAST (free ad-supported television) channel called VICTORY+ Unlike a number of the complex elements in the streaming/media space, a FAST channel is quite straight forward: viewers can watch content on virtually any device — i.e., TV, tablet, phone, computer — at no cost, with the only tradeoff being that the viewer most times does not control the content and has to watch commercials. It’s a page out of the original television model, but with updated technology. The Stars, like many other clubs in the National Hockey League (NHL), National Basketball Association (NBA), and Major League Baseball (MLB), are faced with a challenging decision when what to do about their local TV rights. The current RSN model is quickly shifting, and there is not an obvious replacement. This presents a question of opting for reach or revenue. Most of the clubs gave up reach for revenue in the traditional RSN model. While RSNs historically reached a smaller segment of the clubs’ DMA (for example, the Stars estimated that 60% of the local Dallas-Fort Worth market (~1.9 million of the 3.1 million television households) was unable to watch its RSN, the clubs were rewarded with eight-to-nine-figure annual payouts from the RSNs that amounted to anywhere between 12-23% of overall revenue. In this free streaming model, they will sacrifice upfront money by going with a free channel but hope to make some of it back in advertising dollars and ancillary revenue streams (i.e., merchandise, sponsorships) that come with attracting more fans and earning goodwill. Plus, the Stars reportedly received a minimum guarantee from APMC that serves to de-risk the deal somewhat. Other clubs have tried this free channel idea, but the Stars’ setup is unique in that it is streaming only and with a partner that has experience in FAST channels and digital content (APMC runs Dude Perfect’s streaming service). These two elements are likely to help attract a younger, more digital savvy fanbase as the Stars seek to grow the fanbase. This partnership feels like the next evolution in the move away from RSNs, and I would expect other clubs to look hard at this option. The concept of going free and also providing a digital native medium that appeals to younger audiences is quite compelling. Interested in learning more (and seeing an Entourage gif)? Check out Sports Business Playbook to get smarter in 5 minutes on the biggest business stories in sports 👇 https://lnkd.in/gqkRbgXQ

RSNs are Taking a Dive. Regional Sports Networks (RSNs) are facing significant challenges and appear to be in decline, but they are not entirely a thing of the past yet. Here's an overview of the current situation: The Decline 🔌Millions of Americans are abandoning traditional cable packages. 💵RSNs cannot afford to operate. For example, Diamond Sports Group, the largest RSN operator, filed for Chapter 11 bankruptcy in 2023. 🧾Constant contract disputes between broadcasters and cable providers have led to blackouts, frustrating fans. Networks Today 🔵Some RSNs are still operating, such as YES Network (New York), NESN (Boston), and Marquee (Chicago). ⚾12 MLB teams still have RSN rights with Diamond Sports Group. The Future of Sports Broadcasting 💻Direct-to-consumer models: streaming subscriptions. 📢League involvement: Leagues taking more control over broadcasting. 🌐Tech giants: Potential involvement from companies like Netflix, Amazon, or Apple 📣COACHES CORNER 🎙️ “The RSN situation today reminds me of the decay in local newspapers that has been going on for 20 years. Yes, the technology is changing, but the cataclysms come from new, emergent business models.” —Eric Spitz, Chairman of FanUp.ai Questions to Ponder ❓How will the consumer experiences of streaming services compare to those of RSNs? ❓ ❓Which RSNs stand out for their innovation and ingenuity? Does that matter, or will all of them receive the same fate? ❓ ❓Which streamers are likely to dominate the competitive landscape? Is size the only thing that matters? ❓

It's the sports streaming joint venture that's got everyone talking - and not in a good way. "Spulu" (or "Hulu for Sports" as some call it) is facing a mountain of questions and concerns from lawmakers, sports leagues, and competitors alike. And if you ask me, this consolidated streaming Goliath is poised to be a major headache for consumers and the industry as a whole. 🚨 Key Takeaways: - Two high-powered Congressmen are demanding answers from The Walt Disney Company, Fox Corporation, and Warner Bros. Discovery on the pricing, intent, and anti-competitive impacts of "Spulu" - The venture is already facing a DOJ antitrust inquiry and a lawsuit from fuboTV Network - not a great look for something that's supposed to be the sports fan's dream - With major sports rights like the National Football League (NFL), Olympics, and college sports missing, "Spulu" is shaping up to be more of a sports media nightmare than a dream come true At the end of the day, this alliance reeks of corporate overreach and a blatant power grab. As the lawmakers put it - without more transparency, we're concerned this will result in "higher prices for consumers and less fair licensing terms for sports leagues and video distributors." Sounds to me like the sports media landscape is about to get a whole lot messier. Buckle up, folks. The future of sports streaming is looking increasingly uncertain.