How Netflix Wins the Sports Media Bidding Wars Without Participating

Thus, as the cable-tv-dominated status quo crumbles, pro sports will develop a new playbook, centered around better telling player stories. Players will also have more opportunity to tell and sell these stories themselves, direct-to-consumer:

But these bold, counter-intuitive moves proved game-changing. Exclusive rights and originals made content, a major component of Netflix’s cost structure, a fixed-cost item. Any potential streamer would now have to ante up the same number of dollars, regardless of how many subscribers they had. If, say, Netflix paid $100M for House of Cards and thei

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With the above dynamics in mind, we believe that there is going to be tremendous near-term innovation in the pay TV distribution business. The internet has made it possible for new entrants to innovate quickly and materially. Consumers will have more choice and convenience going forward. This competition will drive prices and margins down in pay TV... See more

Trouble arrived early in the 21st century, when upstart companies powered by new digital technologies began to challenge the status quo. Entertainment executives reflexively dismissed the threat. Netflix was “a channel, not an alternative.” Amazon Studios was “in way over their heads.” YouTube? No self-respecting artist would ever use a DIY platfor... See more

Until recently, the relative resiliency of traditional pay TV and the rapid growth of streaming have obscured the inevitability that TV will go through a similar transition. But we’re on the cusp of it now. Traditional TV is, finally, rolling over, and streaming profits won’t likely be big enough to make up the difference. Many of the downstream ef... See more