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Horowitz: Venu Sports could poach customers from cable, streaming

A camera bearing the Fox Sports logo films a baseball game.
A camera bearing the Fox Sports logo films a baseball game. (Image courtesy Fox Corporation)

A new streaming service being developed by Fox Corporation, the Walt Disney Company’s ESPN and Warner Bros Discovery’s (WBD) TNT Sports is likely to poach customers from traditional cable and comparable streaming products when it launches later this year, according to the findings of a new study by Horowitz Research.

The study, circulated among industry analysts and journalists on Wednesday, found 38 percent of Americans who are currently subscribed to traditional cable or a streaming alternative like Fubo and DirecTV Stream are likely to adjust their subscriptions to buy Venu Sports when it launches in August.

Pricing for the service hasn’t been announced, but it is expected to cost around $45 to $50 per month — substantially lower than the cost of a core pay TV package offered by cable, satellite or sports-inclusive streaming cable alternatives.

The service will offer access to local stations affiliated with FOX and ABC, as well as sports-inclusive cable networks like ESPN, Fox Sports 1, TNT, TBS and Tru TV. What sets it apart from traditional cable and streaming packages is Venu Sports won’t include non-sports channels offered by the programmers — meaning no Disney Channel, FX, Freeform, CNN, Discovery Channel or Animal Planet.

Pay TV companies have accused Fox, Disney and WBD of offering more-favorable terms to Venu Sports than competing services, which are forced to carry non-sports channels as a condition of offering sports networks to subscribers. Fubo is suing the broadcasters on antitrust grounds. The lawsuit is still pending.

The allure of broadcast and cable sports channels without an expensive cable TV package is high among sports fans, according to Horowitz, with 58 percent of Americans between the ages of 18 to 34 saying they’d be interested in signing up for Venu Sports. The figure drops slightly to 57 percent among Americans between the ages of 35 and 49 years old. The number of older customers interested in Venu Sports drops to 23 percent.

“Being able to watch live sports has long been an incentive for sports fans to keep their subscriptions to MVPD and vMVPD services,” Adriana Waterson, the Executive Vice President of Insights & Strategy at Horowitz, said in a statement on Wednesday, using the initialisms for traditional and streaming cable TV products.

Waterson continued: “This new service will certainly be a game changer – pun intended – that will further disrupt the media ecosystem and make retention even more of a challenge for all players.”

While Venu Sports will offer a slate of sports programming from the three broadcasters, sports fans who want access to the full roster of events from a particular franchise or league will almost certainly still pick a comparable cable package — and they may need other streaming services on top of that subscription.

For instance, football fans who want access to every National Football League (NFL) game are likely to sign up for YouTube TV, which offers the NFL Sunday Ticket package. The core cost of YouTube TV is $73 per month, and the service includes local ABC, CBS, FOX and NBC stations and affiliates, along with ESPN and NFL Network. Out-of-market games from CBS and Fox are offered on NFL Sunday Ticket, which costs $350 per year on top of YouTube TV’s monthly fee.

YouTube TV and NFL Sunday Ticket still won’t be enough for fans to watch all football games: With Thursday Night Football relegated to Amazon’s Prime Video, fans will need a subscription to that service if they want to watch live games on their TV screens. Those who are comfortable watching games on their computers, phones or tablet can stream Thursday Night Football for free via Amazon’s Twitch.

This year, fans will also need Netflix to stream two Christmas Day football games after the service landed the exclusive national distribution rights to those events. Netflix will also offer at least one Christmas Day game over the next two seasons.

Football tends to be the most-watched sport on television in the United States. Venu Sports is hoping to launch its service in late August in order to generate interest leading to the start of the NFL’s regular season in early September. But with football rights fragmented across services, it remains to be seen whether Venu Sports can hold subscribers in for the long-term, or if sports fans will churn out once they realize the need to switch apps or platforms to watch games on NBC, CBS and other channels.

The same holds true for fans of other sports: National Basketball Association (NBA) rights are split between local broadcast and cable channels, with national telecasts airing on ESPN and TNT Sports. That will change after next year, with Amazon and Comcast’s NBC likely to grab national rights to some national NBA games that currently air on TNT Sports networks. Neither Prime Video nor NBC are part of Venu Sports.

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About the Author:

Matthew Keys

Matthew Keys is a nationally-recognized, award-winning journalist who has covered the business of media, technology, radio and television for more than 11 years. He is the publisher of The Desk and contributes to Know Techie, Digital Content Next and StreamTV Insider. He previously worked for Thomson Reuters, the Walt Disney Company, McNaughton Newspapers and Tribune Broadcasting.
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