Will major sports deals knock out traditional TV broadcasting?

Digital entertainment is undergoing a seismic shift, with live sports emerging as the new battleground where streaming giants like Netflix, Amazon, Disney, and Apple are clashing to secure and retain subscribers.

With millions scaling back on their increasing number of subscriptions, streaming platforms are now leveraging live sports to offer something traditional cable once monopolized. This strategic pivot marks a critical evolution in the streaming wars, but how did we get here?

Viewers fight back with binge, cancel, and repeat strategy

Cord cutters who canceled their $100-a-month cable and satellite subscriptions en masse to go all in on streaming services are now finding it's no longer a bargain. A clamp down on sharing passwords, inserting ads, and returning to the old-school rationing of one episode per week has brought us back to where we started.

A quick look at a bank statement with outgoing payments for Netflix, Prime Video, Apple TV+, Disney, HBO Max, and Paramount TV is enough to leave anyone with subscription fatigue. Rather than preventing users from leaving, locking the most popular shows behind weekly episode drops made audiences more disloyal.

Savvy viewers switched tactics by adopting a binge-and-cancel strategy. This involves waiting for their favorite shows to finish and then binge-watching everything that interests them for a month before canceling and moving on to another streaming platform to rinse, wash, and repeat.

Streaming services are preparing for a stagnation or decline in subscriber growth. With services such as Paramount struggling to keep subscribers, it could pave the way for consolidating streaming platforms.

Netflix was trying to get ahead of the trend by announcing that starting in 2025, it will stop sharing subscriber numbers. So what can the big four streaming platforms do to prevent audiences from hitting the cancel button? The answer can be found in the traditional TV playbook and the addition of live sports.

Sport is the next battleground for streaming platforms

Earlier this year, Rafael Nadal and Carlos Alcaraz were part of a live sports event called the Netflix Slam. On Christmas day, Netflix hopes to put the glitchy Jake Paul vs. Mike Tyson fight behind them with two NFL games to be streamed on its platform. As we look toward 2025, the streaming giant will flex its sporting entertainment muscles with a $5 billion deal to make Netflix the home of WWE Raw in 2025.

The NFL is LIVE on Netflix this Christmas! Wednesday 25 December (in case you didn't know when Christmas was). 🎄

Chiefs vs. Steelers at 6.00pm GMT
Ravens vs. Texans at 9.30pm GMT pic.twitter.com/AkvgwGhph4

undefined Netflix UK & Ireland (@NetflixUK) October 21, 2024

Amazon is also making big movies with Prime Video, and the NBA announcing a landmark 11-year global media rights deal. The rights will cost Amazon nearly $20 billion, but with 66 regular-season NBA games on its platforms, it could go a long way to securing more Prime members.

Amazon also has broadcasting rights to the UEFA Champions League and 20 Premier League matches. By throwing a $7.7 billion NASCAR deal and Thursday Night Football into the mix, Amazon is building a competitive sporting portfolio. Outside of the US, Wimbledon is moving from Sky to Amazon in Germany and Austria.

#PLonPrime 🤝 #UCLonPrime

All 2️⃣1️⃣ fixtures LIVE on Prime this December ⚽️📺 pic.twitter.com/YYej2FdBKz

undefined Amazon Prime Video Sport (@primevideosport) November 28, 2024

Earlier this year, The Walt Disney Company's ESPN, the Fox Corporation, and Warner Bros. Discovery revealed plans for an "innovative new platform to house a streaming sports service." Collectively, the companies have broadcasting rights to lucrative sporting franchises. However, the NBA is turning their offer down and going to Amazon, which will be a massive setback.

Apple has also dipped its toes in sports streaming with a seven-year deal with MLB games. The contract is worth $595 million, but the tech company still is yet to pay the big money required to stream high-profile live global sporting events.

It was also reported that FIFA had valued a broadcasting partnership for the two Club World Cup competitions at $4 billion, a deal that would have granted Apple TV+ exclusive media rights worldwide. However, Apple was only willing to commit up to $1 billion.

In India, a merger scheduled for 2025 between Reliance and Disney India would lead to the control of 85% of streaming and lucrative cricket streaming rights. Despite the $8.5 billion merger receiving hundreds of antitrust queries, the deal has been provisionally approved by India's competition watchdog.

Reuters Flash: Disney, Reliance $8.5 billion India media assets merger gets antitrust warning notice in India, sources say; Competition watchdog concerned about market power of merged entity over cricket broadcast rights, asks why investigation should not be ordered pic.twitter.com/MLfUWINEzs

undefined Aditya Kalra (@adityakalra) August 20, 2024

By contrast, Sky, a longtime stalwart in sports broadcasting, currently pays an estimated £12 million annually to air 60 days of live darts, including the much-anticipated World Championship. Despite this seemingly modest investment, darts remains Sky's second-most viewed sport, trailing only behind football in terms of peak viewership numbers.

However, Sky's latest offer to increase the rights fee to £25 million falls significantly short of the £45 million annual fee desired by PDC Chairman Barry Hearn. This gap has potentially opened the door for streaming behemoths Amazon and Netflix to enter the fray, signaling a pivotal shift with Sky potentially losing the rights to another sport.

Can streaming services replace traditional sports broadcasters?

Streaming live events to 65 million concurrent users requires a much more powerful technical infrastructure, which Amazon has nailed perfectly with streaming Premier League and Champions League matches. However, buffering problems of the Jake Paul vs. Mike Tyson fight highlights how Netflix still has a lot of work to do.

Variations in internet speeds among viewers, diverse device capabilities, and network congestion can lead to issues like buffering, lowered resolution, and interruptions.

WTF @netflix This buffering and now frozen screen is unacceptable. #PaulTyson #NetflixBoxing #MikeTyson #JakePaul pic.twitter.com/88uYEFw8Io

undefined Terry Wade Thompson (@TerryWThompson) November 16, 2024

Scaling streaming services during high-demand events introduces another layer of complexity. A sudden surge in viewers can overwhelm servers, potentially causing crashes and degrading the user experience. To address this, effective load balancing and cloud-based solutions are crucial. They help distribute the streaming load evenly across servers and utilize the scalability of the cloud to handle peak traffic.

Spending billions of dollars on securing broadcasting rights is the easy part. Ensuring that streaming remains reliable and high-quality during crucial live events to maintain viewer satisfaction and loyalty requires expensive infrastructure. Any streaming platform going viral for all the wrong reasons during critical sporting moments will learn the hard way that it’s the quickest way to lose subscribers.

Will streaming services deliver the knockout blow for cable and satellite TV?

In 2025, the world's biggest sporting franchises could quickly become locked behind the paywalls of a handful of streaming platforms alongside the biggest TV shows and movies. With the most popular content gone, what value proposition does this leave traditional cable and satellite TV providers?

Sky is branching away from entertainment packages in the UK and offering a wide range of services. The broadcaster can now be found renting its Sky Glass TVs, locking users into mobile contracts, and selling everything from smartphones to gadget insurance coverage. But are legacy providers slowly losing their identity?

Who owns the broadcasting rights to your favorite TV shows, movies, and sports is the most likely streaming platform that will remain on your subscription list. The stage is set for a royal rumble that will see traditional broadcasters go toe-to-toe with streaming platforms, and we are likely to lose a few entertainment providers along the way.

So grab your popcorn and stay tuned. The shift from cable to sports streaming could change everything.