Cord cutters have another reason to get excited, as CBS this week announced its planning to launch a live streaming service for sports. The news was discussed on the companys Q2 earnings call, and though details are light theres no name, pricing or exact launch date at this time, for example the service could potentially go a long way to fill a gap thats not currently well-covered by live TV streaming services and on-demand subscription video.
According to the company, the idea to do a live streaming channel for sports was influenced by the networks earlier digital success with its streaming news network, CBSN. First launched in 2014, CBSN was designed to increase the distribution of CBSs news content to digital platforms. CBS more recently announced CBSN content, including its live news and original reporting, would become a part of CBSs over-the-top streaming service, CBS All Access.
The goal now is to replicate the CBSN model, but for the world of sports.
Later this year, we will roll out a 24/7 live streaming channel like CBSN for sports as part of our ongoing [over-the-top] strategy, said CBS CEO Les Moonves, on the companys earnings call, adding that the service did not yet have a name. We think sports fans are looking for something like this, and that opportunity is significant, he noted.
The company has already benefited by bringing sports programming to over-the-top viewers who no longer subscribe to traditional television, like cable or satellite TV.
In December 2016, CBS announced a multi-year streaming deal with the NFL that gave it the rights to broadcast every NFL game on CBS via the CBS All Access service. Of course, there were a few caveats.
First, the games were only available where CBS offers live local broadcasts via the service. Thats not the entire U.S., but it was a sizable chunk at the time the deal was announced 150 markets. (As of May, CBS claimed All Access reached 90 percent of U.S. households.) Also, CBS All Access wasnt able to stream NFL games on mobile, because of Verizons [disclosure: TechCrunchs parent AOLs owner] NFL deal.
That said, CBS said that its announcement of streaming NFL games boosted weekly sign-ups, on average, by 75 percent, when compared with the weeks before the news of the deal was made public. That indicates theres definitely pent-up demand for access to live sports through nontraditional means that CBS is able to tap into.
Additionally, Moonves explained that many of the pieces necessary to move into streaming sports were already in place at the network.
As you know, we already have a very proactive online sports group down in Fort Lauderdale, Florida, and as I said, we have the infrastructure that allows CBSN to thrive, which obviously will be used there as well, the exec noted.
Because it would be able to keep costs down due to existing infrastructure, the company believes its chances for earlier profitability with streaming sports are good.
Moonves didnt fully respond to a question about what kind of sports content would be live streamed, whether its focus would be more on highlights, or whether that was all still being worked out.
However, he did point out that CBS has deals with the NFL, the NCAA (through 2032, in fact), FCC football and PGA Tour Golf. But he described the project as being in the very preliminary stages of formation.
CBS is a big player in the sports world, Moonves said. We are going to look to differentiate ourselves from the ESPN and the Fox Sports as well, and we think we have a good opportunity to succeed.
By taking CBS sports over-the-top this year, the company will beat ESPN to its just announced launch of its video streaming service, planned for 2018.
That move was a long time coming. A profile on ESPN published by Bloombergthis spring noted that ESPN had lost more than 12 million subscribers since 2011, largely due to cord cutting. But the company seemed to still be focused on propping up the cable bundle, the report explained. It was doubling down on investments in technology to make ESPN better for cable customers like integrations with TV remotes to pull up ESPN channels and content, new tech for SportsCenter anchors, a personalized app for cable customers and much more.
Meanwhile, ESPNs forays into streaming had been more modest. It offers its channel and content through streaming services like Sling TV, Hulu, DirecTV Now and YouTube TV, for example. It chose not to go direct-to-consumer because the economics dont work. AsBloomberg pointed out, an entire season of Games of Thrones costs less than what ESPN pays to air a single Monday Night Football game.
But things are changing now. Disney said today it will launch an ESPN video streaming service next year, including MLB, NHL and MLS content. It will do the same for Disney in 2019, and will pull its movies from Netflix.
The high cost of sports programming could be an issue for CBS, too. But CBS believes it has a strong position to negotiate for rights, especially with the NFL, which Moonves described as a big supporter of broadcast television.
However, CBSs competitors today arent limited to Fox or ESPN when it comes to sports.
Consumers today have a growing number of options for over-the-top access to sports programming and live games. Twitter, for example, has made deals to live-stream MLB games, WNBA, the PGA Tour and others from smaller sports leagues. Facebook and the MLBpartnered this year to bring 20 regular-season games to the social network. And Amazon scored NFL Thursday Night Football.
When ESPNs Monday Night Football deal expires in 2021, it will be interesting to see what the NFL chooses to do at that point, given ESPNs current struggles, the new entry of sports streaming services and the potential to roll out to other platforms like Amazon, Twitter or Facebook.
CBS said it plans to launch its streaming sports service this year.