Bally Sports Plus, ESPN+ And Others Could Continue To Fuel Sports Fan Cord Cutting
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The streaming video wars is entering a new phase this month, with Sinclair Broadcasting’s subsidiary Diamond Holdings Group planning a major marketing push for its Bally Sports Plus, which is an online Direct To Consumer (DTC) platform for their regional sports networks (RSNs), formerly known as the Fox Sports Networks.

The marketing blitz will come in the five markets where Bally Sports Plus did a soft launch last month, coming after Major League Baseball’s All-Star break which will occur from July 18-21.

The initial channels which were launched have popular MLB games, with the DTC brandscarrying the Detroit Tigers, Kansas City Royals, Miami Marlins, Milwaukee Brewers and the Tampa Bay Rays. This is likely to be an exploratory time for Bally Sports so they can learn more and focus on their remaining RSNs.

This could be another nail in the coffin of cable and satellite companies which continue to see a significant number of video customers migrate to online over-the-top (OTT) or DTC services like Hulu, Netflix
NFLX
, Disney+. There is expected to be a major expansion into online sports with Disney investing heavily in their ESPN+ platform.

In addition, with USC and UCLA bailing from the Pac-12 Conference in favor of the Big-Ten Conference, Apple has rejoined the bidding for a package of Big Ten games, competing against Amazon
AMZN
Prime Video, ESPN and NBC. Apple
AAPL
and Amazon Prime are expected to be increasingly aggressive going forward on bidding for sports rights, with traditional broadcast and cable networks not having the financial muscle that these online giants have unless they can figure out a way to monetize the rights fees via their own online video platforms.

Historically, RSNs were on the “basic” tier of cable, meaning that if you subscribed to anything other than the cheapo “lifeline” package, you could watch all of your local teams when they were in season. This helped cable and satellite operators retain subscribers to their ever increasingly expensive video packages, as even those consumers who didn’t like to watch sports helped subsidize the cable bill.

For example, the average wholesale price per month for the RSNs which launched as a streaming product cost the cable or satellite operator $5/month, meaning at retail you were paying somewhere in the neighborhood of $7-8/month, even if you never watched the channel.

The new Bally Sports Plus channels will go after the most avid fans with a price-point of $19.99/month or $189.99/year, which means it will be increasingly difficult for cable and satellite operators to force significant price hikes on video consumers as some of the most avid RSN fans move to OTT services.

Sinclair has publicly stated they will be going after people who have already cut the cord and they don’t believe it will have a significant impact on future cord cutting. They will be marketing to younger consumers with an interactive app which will eventually allow playing fantasy and predictive games for prizes, get advanced statistics and compete for prizes.

FuboTV, another OTT service, is marketing heavily to the sports fan and ESPN+ is already being bundled with Hulu and has more than 22 million subscribers.

And it’s not just a regional phenomenon, ESPN is expected to continue to move more and more popular content onto its ESPN+ service. It will have to take an extremely delicate approach in doing so in order to ensure that the wholesale price-point they are charging multichannel operators of more than $10 a month remains worth it.

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