BIG TECH LOOKING TO TRIUMPH OVER CABLE TELEVISION
By: Chloe Huang
Since their formation, Big Tech companies like Apple and Amazon have tried to get buyers to use their new, innovative technology. Unfortunately for established business models, the success of their new technologies can come at a steep cost for traditional businesses.
Amazon’s online shopping platform disadvantaged physical stores, and Apple Music almost completely ended records stores. Now, they’re setting their sights on cable television.
Recently, Big Tech companies have been making deals to expand in the field of live sports. Apple and Amazon are entering negotiations for media rights held by the National Football League, Major League Baseball, Formula One racing, and college conferences to boost the number of members subscribed to their streaming services. On paper, this seems to be a good way to attract new members, as sports programs account for 95 of the 100 most popular TV programs last year.
Big Tech’s new interest is unfortunate for media companies, as Big Tech usually has a larger budget and can afford to spend much more money to acquire popular media rights like the World Cup or Super Bowl. “It’s hard when you’re competing with entities that aren’t playing by the same financial rules,” said Bob Iger, the former chief executive and chairman of the Walt Disney Company, which controls ESPN.
Some believe that companies like Apple and Amazon are succeeding in their mission to replace cable with streaming services. According to MoffettNathanson, an investment firm, cable television has lost 25 million subscribers since 2015. However, to acquire more media rights, Apple and Amazon must prove that they can provide high quality streams and an intuitive interface to viewers more used to using a television remote.
Some media companies like Comcast, ESPN, and CBS are trying to combat Big Tech by starting their own streaming services and encouraging viewers to watch sports on their those.
Comcast, for example, started Peacock, and ESPN started ESPN+. However, those streaming services are usually very small and don’t reach a wide enough audience compared to cable television to justify it to their advertisers.
Big tech’s newfound interest in live sports is the opposite of their views a decade ago. Back then, most companies who provided streaming services agreed with Reed Hastings, the chief executive of Netflix, who said that sports were not lucrative because it was only watched once. This change in opinion is attributed to the intensifying competition between streaming services for subscribers.