The year is 2028. You and some friends want to watch the Duke-Kentucky game. Will you:
A) Sit on the couch in your home and watch the broadcast on TV, just like the dinosaurs from previous decades;
B) Stream it on one of your devices from an over-the-top (OTT) subscription site, for which you pay a nominal fee and get limited commercial interruptions in return;
C) Conjure video from your device into a three-dimensional spatial experience, a la Tom Cruise in “Minority Report,” while wearing virtual reality goggles that make it feel like you’re in the stands?
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All three options may be available, along with others we haven’t even imagined yet. Media technology is changing at breakneck speed, with digital streaming services growing in importance and new players entering the marketplace seemingly by the week. If this all sounds a bit too sci-fi, consider how you’d have felt in 2008 if someone said you could watch a random Atlantic-10 game on your phone while driving through rural backroads.
The way games are delivered to fans surely will look different in the not-too-distant future. The challenge for schools, conferences and media companies alike will be figuring out how best to capitalize on the new technology without losing the revenue that keeps them afloat. Who will win, who will control the content and how much will it end up costing you?
“Ten years from now, I think fans will find it unacceptable if an event is happening and they can’t watch it and watch it right now,” says John Lasker, ESPN’s vice president of digital media programming. “What the businesses and distribution models are that support that remains to be seen.”
College sports are basically underwritten by TV. Your team’s shiny new practice facility or sparkling locker room owe their creation to the massive media rights deals showered onto conferences. The Big Ten, for example, expects to distribute $52 million to each of its members in the next year, mostly from its new TV partnerships. The SEC gave its schools $41 million each last year.
Those big bucks are largely driven by football, but CBS Sports and Turner are shelling out nearly $1 billion per year to broadcast the NCAA Tournament, covering most of the NCAA’s annual budget (Full disclosure: Seth Davis, the managing editor of The Athletic College Basketball, is employed by CBS as part of its NCAA Tournament coverage). ESPN has always been a primary destination for college basketball fans. The Worldwide Leader filled much of its airtime in the early days with Dick Vitale screaming over games on campus, and its exposure helped fuel the rise of the Big East in the mid-1980s. Championship week offers wall-to-wall drama.
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ESPN could always count on dual revenue streams: the carriage fees it collected from cable and satellite companies, plus the advertising it sold. But with the rise of cord-cutting, ESPN has lost a reported 14 million subscribers since 2011. That has led to layoffs and questions about whether the Disney-owned sports behemoth can continue to hand out enormous rights deals.
In an attempt to win back some of those cord-cutters, the company launched ESPN Plus this spring. The standalone streaming service costs $4.99 per month and will feature hundreds of college basketball games this season. Most will be from mid-major leagues such as the Big West, Horizon, MAC, Missouri Valley, Sun Belt and the WAC. League executives will be watching closely this winter to see how ESPN Plus – which surpassed 1 million subscribers in September – connects with fans.
“People have been conditioned to consume content digitally, but they have been conditioned to get it for free on ESPN3,” says Jack Watkins, associate commissioner of Missouri Valley Conference. “This is the first time a portion of our events will be behind a paywall. It has not been seamless so far. But we believe in the alliance with ESPN.”
ESPN Plus (or ESPN+) might be the highest profile new OTT platform, but it’s not the only one college basketball fans need to know. Stadium arrived on the scene last spring and features games from several conferences. British-owned DAZN (pronounced Da-Zone) wants to be known as the “Netflix of sports” and offers commercial-free streaming for $9.99 per month. FuboTV is targeting sports fans with live events. Hoops junkies can also get their fix through Bleacher Report Live, CBS Sports HQ and FOX Sports Go. And we haven’t even mentioned YouTube or the bottomless pockets of the FANG (Facebook, Amazon, Netflix and Google) group, should they decide to jump into the live sports arena.
“Clearly as we move forward, you’ll want to have a mix of platforms to provide your content,” MAC commissioner Jon Steinbrecher says. “Whether that’s Facebook or Amazon or Netflix or Hulu or something to be determined, all will be part and parcel of these conversations.”
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In the best-case scenario, having so many potential suitors for sports content will mean a financial boon for conferences and schools.
“Live news and live sports are golden because those are the only things people watch in real time,” says Eunice Shin, managing director and head of consulting for Manatt Digital. “As much as there is a massive amount of cord-cutting happening and a massive amount of growth in the OTT space, I still think it’s a fantastic time to be in the business of sports, because those fees are going to go up.”
The power conferences and blue blood programs probably have nothing to worry about. There will always be an audience for North Carolina and Indiana and Syracuse. It’s the mid- and low-major leagues that might feel the squeeze. The upside of all this streaming is that fans can find and watch basically any event on any campus. But can OTT platforms sell enough subscriptions or ads for what is essentially a niche market?
“That’s a really fair question,” Watkins says. “There has always been a historical rate card, if you will, for linear productions. But digital is such an emerging technology that I don’t think there’s a standard operating procedure on how to monetize it.”
“It’s definitely a concern,” Conference USA commissioner Judy MacLeod says, “especially for programs like ours.”
The WAC could be the canary in the coal mine for these changing times. The league is in negotiations with ESPN for its new rights deal. Expect many WAC basketball games to be carried on ESPN Plus. The conference also streams its events on the WAC Digital Network.
“It’s a different world,” says Eric Danner, the WAC’s executive director of broadcasting. “But people now expect to see every game either on their TV or on their computer. Basically, you’ve got to stream everything to keep up with the Joneses.”
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WAC member schools all have their own studios and broadcasting capabilities. In fact, several of the WAC games that have appeared on ESPN3 were produced by the schools themselves, with announcers hired by the conference office, not ESPN. Most schools around the country now have their own broadcast centers.
All of which raises a question: Why don’t the conferences cut out the middleman and simply deliver their games directly to fans, perhaps for a subscription fee? It’s never been easier or cheaper to do so, and versions of this already exist. On Conference USA’s digital network, for example, you can get access to all live streaming events for $10.95 per month or $99.95 a year. The Big Ten Network offers a School Pass that allows you to watch all of your team’s non-televised content for $79.95 per year, though that doesn’t include football and only rarely covers men’s basketball games. The Big Ten was a pioneer in controlling much of its own content with the formation of BTN in 2007, though Fox owns 51 percent of the business.
But striking out on your own isn’t as easy as it sounds. The Big Ten and Comcast settled a carriage dispute in August that threatened to leave millions in the league’s footprint without access to their team’s games. The Pac-12 Network has struggled to succeed since infancy, a fact that frustrates fans and puts the league at a disadvantage relative to its peers. “I don’t know if we could do any better than what we’re currently doing with the BTN model,” says Mark Rudner, the conference’s senior associate commissioner for television administration. “We believe and support the cable or satellite subscription model and the ad-based model that goes with it. I don’t know if any digital platform has demonstrated that it can replicate the economic benefit we get from the current model.”
Many leagues have found it best simply to partner with ESPN, most notably the SEC and the ACC. The MAC, the A-10 and the Ivy League also have digital networks co-branded with ESPN. Kansas recently announced that its Jayhawk Network, which broadcasts six men’s basketball games per year statewide, will be available on ESPN Plus.
While mid-majors probably could make money by selling games directly to their most passionate fans, they would miss out on the promotional muscle of a network such as ESPN as well as those casual basketball fans flipping channels (or is that switching streams?), plus the recruiting advantages of being aired coast to coast.
“Part of the challenge in generating value on the digital side is getting a lot of eyeballs to see what you’re doing,” the MAC’s Steinbrecher says. “So the ability to go to one place and have a full menu of options to choose from has great value. ESPN3 and ESPN Plus are phenomenal exposure platforms. Not everybody is getting paid a whole lot for that right now. But that may be OK, depending on where you are in the food chain.”
Whenever Rudner speaks to a group of students, as he did recently at Stanford and Michigan, he always asks one question: How many of you have watched a live sporting event on an iPhone or an iPad in the last six months? “They all raise their hands,” Rudner says.
Viewing habits are definitely changing. Shin used to be a devoted watcher of ESPN’s “SportsCenter;” now, she gets her highlights and news through ESPN’s Instagram feed. The short-attention-span generation might prefer its sports in bite-sized chunks rather than sitting through a two-hour game. NBA League Pass introduced an option this year that lets fans purchase only the fourth quarter of a game for $1.99. Might something like that work for college buzzer-beaters?
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Conference USA struck a deal to show select football and men’s basketball games exclusively on Facebook. The league found that during some of those football games this fall, people in the stands had their Facebook apps open so they could chat with other fans. “We’re not afraid to try new things,” MacLeod says. “As more people enter the space, that can only help a conference like ours.”
Some consolidation is bound to happen. Only the hardest of hardcore fans would pay for 20 OTT services to see all the games they want. “That would be 10 times the cost of cable, and that’s the whole reason you dropped your cable,” Shin says.
Expect to see more “skinny bundles,” which allow you to pick the channels you want at modest prices. And mergers and acquisitions are inevitable. There’s little doubt ESPN still wants to stiff-arm competitors. Lasker says the company’s goal is for you to open the ESPN app and click a link to watch a game, no matter what ESPN platform is carrying it. “We believe that if there’s a game worth playing, it’s worth presenting to an audience,” Lasker says. “And we believe ESPN should be doing that.”
No one thinks broadcast networks – or linear TV, in the current parlance – will disappear any time soon. But there will be lots of other ways to consume college basketball. Even that futuristic, Tom Cruise/virtual reality option will be here sooner than you think, thanks to companies such as MagicLeap and others.
“You’ll still have people over to your house sitting in your living room and watching the game in real time,” Shin says. “But you’ll also be able to watch anywhere, anytime, on any device and in any environment.”
That sounds like a future we can all get behind.
(Top photo of ESPN’s Holly Rowe: Denny Medley/USA Today)
