The death of cable TV may be the birth of streaming sports aggregation

For about a decade, media executives have heavily invested in live sports as the primary value proposition for consumers to keep subscribing to traditional pay television.

For about a decade, media executives have heavily invested in live sports as the primary value proposition for consumers to keep subscribing to traditional pay television. While tens of millions of Americans have ditched cable for a variety of streaming services, ESPN’s marquee live sports have remained exclusive to cable subscribers. The broadcast networks (CBS, NBC, ABC and Fox) have been able to charge increasingly high fees to pay TV operators because they’ve invested in NFL games and college football, the most-watched American programming.

When ESPN launches its direct-to-consumer service (likely next month), for the first time ever, Americans will be able to consume all major sports without having to subscribe to cable.

(By the way, Disney — ESPN’s majority owner — reports earnings next week. Sources suggest to me and my colleague Mike Ozanian that would be a logical time for ESPN to announce not only the DTC launch date but also the finalized details of its deal for NFL Media assets, which I reported on in last week’s newsletter. Spokespeople for the NFL and ESPN declined to comment.)

The changes in the pay TV landscape have led to one question that’s dominated the strategic choices of the biggest media companies for the last decade: Will traditional pay TV die off completely, or will it level out and exist for decades to come as a profitable, albeit smaller, business?

There was an interesting data point last week in Charter Communications’ earnings report that suggests the answer could be the latter. Charter’s earnings results weren’t good. The stock fell 18% after the company reported it lost 117,000 internet customers during the quarter. Companies like Charter and CNBC’s parent company, Comcast, have largely traded on residential broadband additions (or subtractions) for many years.