As Fragmentation Continues, Need For Sports Streaming Bundle Grows

Sports fragmentation isn’t new, but returned to the spotlight over the last month for a variety of reasons:

Set against the backdrop of inflation concerns for consumers, there’s a potential breaking point coming for televised sports, where audiences, media partners or both simply can’t pay what they’ve been paying anymore.

Solutions to these growing problems have been proposed before.

Venu’s Swift Rise And Fall

Not too long ago, Disney, Fox and Warner Bros. Discovery were poised to offer up a solution in the form of Venu. The all-in-one sports streamer would cut down on the number of subscriptions required to watch many live events, while conceivably giving sports-minded consumers an easier way to cut the cord for a price of $42.99.

But like relatively every solution presented to fix this problem so far, it failed.

From the time it was announced, Venu was immediately embroiled in legal issues, provided an incomplete collection of major sports (no Paramount or NBCUniversal properties, after all), and folded before launch. WBD losing NBA rights also made things more difficult, since as a result, the company brought less to the table than Disney or Fox.

Starting in October, those two get another crack at a partnership. Audiences will be able to bundle the ESPN app with Fox One (which includes non-sports programming as well) for $39.99. That’s $10 more per month than the ESPN app’s standalone price, but the same price as the Disney bundle (with Hulu and Disney+) and $10 less than it would cost to subscribe to ESPN and Fox One separately.

This is a decent step in the right direction for consumers to simplify subscriptions and programming choices. Yet, it’s still relatively limited, missing games from Amazon, Apple, Netflix, Paramount, NBCU and WBD. What’s needed to subscribe to those offerings would far surpass most MVPD and vMVPD offerings.

Can MVPDs Solve The Puzzle, Again?

Essentially, the need for an all-in-one sports app stems from the continued collapse of the traditional cable bundle, and the resulting fragmentation consumers experience via streaming. So realistically, the easiest solution to this problem could be the very cable structures that streaming once seemed to (positively) fight against.

Whether traditional cable/satellite companies or the Hulus and YouTubes of the world, the simplest option involves just combing back to traditional TV channels – via “cable packages.” That already covers most sports, beyond just tacking on whichever of Netflix/Amazon/Apple are needed for a given households’ sports preferences.

As re-bundling continues to take hold, too, providers like DirecTV have also worked to integrate various services directly into their “cable” interfaces. The one drawback there, however, is simply that you’re still subscribing separately to many of these external apps, even if contained within the same interface.

What About Operating Systems?

Another option could be operating systems; either in the form of Apple, Amazon Fire and Roku, or built-in setups from the likes of VIZIO, LG and Samsung.

These solutions already have discoverability built in, along with subscription management. But despite the tiles all presented together on the screen, the apps all remain separate entities. Changing that fact would require a significant shift in business approach (though Amazon and Apple already have some of these machinations in place, including some bundling discounts).

It could be done. But do TV operating systems really want to restructure as MVPDs or guides for channel surfing?

Breaking Point

Consumers are arguably already hitting a breaking point with the cost of subscribing to all of these services for sports, in particular. The real break may come from the media companies, though.

Across the board, streaming services have been losing billions of dollars per year since 2020. And even as some find revenue now (in part via ad tiers), these services still take significant investment to stand up – even more so when sports are involved.

At some point, consolidation may be the only way to keep up with the escalating costs it takes to retain sports rights. That could be what forces a true sports streamer, at least among the TV networks.

Whether they could get the tech giants to join such an effort would be up for debate. But a combined bundle from Disney, NBCU, Paramount, WBD and Fox could at least force their hand better than any effort to-date.