As the Canadian government looks to prop up the past, the world continues to move forward. The latest example is the Amazon NBA deal.
There was once a time when broadcast television was a dominant form of media. That dominance, over the years, has eroded for a number of reasons. This includes venture capital hollowing out news rooms, complacency, and a series of poor decisions being made.
One of the things that really took a bite out of television’s dominance was the collapse in quality programming. Great quality television gradually got replaced by an endless supply of low brow reality TV on the basis that it was basically cheaper to produce. Programming, at least in Canada, was increasingly dependent on recording American broadcasts and replacing the ads with local ads. Canadian programming became less of a thing due in part to broadcasters being increasingly reluctant to invest in original content.
An exception to that was broadcast news. This was another major pillars of the success of broadcast television. However, thanks to the aforementioned headwinds broadcast news (such as the decreasing investment and venture capital hollowing out the news rooms), the quality dropped in the last decade or two (at least). Things grew increasingly desperate and broadcast news was more about shovelling out whatever garbage opinion the cultural elite want to push out and less about actual investigative and honest journalism. This has resulted in a collapse of trust in the media as the media continues to be more about pushing an agenda while increasingly abandoning fact-based journalism.
At the same time, online offerings continue to provide better content of all kinds. Platforms like YouTube, TikTok, and Twitch which allow anyone to produce and distribute their content has led to an explosion of creativity and expression online. With revenue sharing programs, the quality from creators kept increasing. This along with “premium” platforms like Netflix also offering an increasing library of equally on-demand content as well.
For many consumers, it has led to a pretty important question: why are we paying for television? The answer has increasingly been unknown. That has led to the phenomenon known as cord-cutting where consumers increasingly drop television offerings in favour of going internet-only for all their entertainment needs. The impact of cord-cutting has already had a major impact on subscriptions for broadcast services with increasingly dismal numbers. The traditional response from those offering broadcast services is to simply increase the rates, leading to even more people cutting the cord. A vicious cycle to say the least.
While things have been looking very grim for those in the traditional broadcasting sector, there has been one major holdout: major league sports. Thanks to hard to get contracts, major league sports have largely stuck with broadcast television. Arguably, it’s the only reason why the business of broadcast television even exists at all these days. Major league sports has been a major contributing factor in keeping broadcasters in business.
Other observers I know generally agree that the only reason why we haven’t witnessed a major collapse in broadcast television is because of major league sports. Cord cutting is increasingly hitting a wall of people reluctant to do without television and major league sports is arguably a big reason for this.
The thing is, that wall of major league sports keeping cord-cutting at bay is increasingly eroding. In 2022, Major League Soccer (MLS) signed a 10 year deal with Apple to carry Soccer/Football broadcasts. In the same year, the NFL signed the Sunday Ticket deal with YouTube. While there have been some surprising bumps in the road, these sports deals are increasing signs that the last bastion of television profits might be the last pillar of broadcast television to begin to crumble – thus increasingly allowing for that last rush of cord cutting to finish off traditional broadcasting profits by knocking out that last pillar.
Today, we are learning that another sign that major league sports is moving online. The NBA has apparently signed a deal with Amazon to be its third media partner to broadcast games. From CNBC:
The NBA has rebuffed longtime media partner Warner Bros. Discovery’s bid to keep airing games after next season.
The league told the media company it doesn’t believe it holds legal matching rights for the new media deal. It instead plans to move ahead with Amazon
as its third partner, along with ESPN and NBCUniversal, in its 11-year deal worth about $77 billion.
“Warner Bros. Discovery’s most recent proposal did not match the terms of Amazon Prime Video’s offer and, therefore, we have entered into a long-term arrangement with Amazon,” the NBA said in a statement Wednesday.
Warner Bros. Discovery acquired matching rights as part of its current media rights deal with the league, which expires at the end of next season. That provision allows the company to match payment for any of the games that air on TNT, which it attempted to do Monday.
The NBA doesn’t believe Warner Bros. Discovery’s rights extend to an all-streaming package, which was carved out for Amazon. Warner Bros. Discovery also owns a streaming service, Max, which it could use to air games, but the company has told the NBA it plans to simulcast TNT games on Max rather than only putting them on Max.
While games are still being broadcast with traditional partners, the exclusivity is increasingly eroding. If you want to catch the games, it’s possible to get it through an online offering instead. It’s another warning shot for traditional broadcasters that their monopoly on major league sports is increasingly over. If online streaming services like Amazon, YouTube, and Apple can also offer major league sports, those broadcasters now have to compete against them for that attention – not just for deals, but viewers as well.
Indeed, one of the things we’ve seen repeatedly throughout the Online News Act and Online Streaming Act debates, when they were called Bill C-18 and Bill C-11 respectively, is this push for the government to prop up the past. This through taking money from these successful platforms and funnelling those profits directly to the floundering broadcasters and traditional producers. This push to do so has led to major questions about market distortions as well as legacy news broadcasters and publishers depending on government to pay for their expenses. That has, in turn, led to further serious questions about the independence of a press dependent on government handouts.
With major league sports increasingly extending their offerings to online platforms, the financial viability of broadcast media is increasingly questioned. Market forces are increasingly moving online where the audience increasingly is. Both of which are leaving traditional broadcasters, who are insistent on living in the past, behind. Even with government handouts, it’s increasingly questionable whether or not there is a path forward financially for traditional broadcasters to carry on.
While traditional broadcasters could have easily avoided this by restructuring themselves to respond to the digital age, they largely chose to either ignore or actively attack the future – even going so far as to attack those who don’t think this is a particularly wise thing to do. The best thing these broadcasters can hope for at this point is that these deals are just blips on the radar and that major league sports will go back to the traditional broadcasters after. If the history of Meta dropping news links is anything to go by, well, good luck with that – the broadcasters are going to need it.
