Broadcast Challenges Lie Ahead For WVU And The Big 12
By Matt Keller
MORGANTOWN, W.Va. – If Shane Lyons can pinpoint one primary change in how viewership of sporting events has shifted, it’s been that of going from the big screen to the small screen.
Lyons, WVU’s Director of Athletics, noted that for years the focus was on reaching the middle-aged men in recliners, the ones with theater surround sound and out-sized flat screen TVs. It was the new trend, circa the mid-2000s, and it continued to catch fire with that demographic.
But there was a massive shift when the millennials came of age, that generation choosing not to sink their disposable income into the ever-growing cable television monster, but instead cut the cord and utilize the now-common personal devices and stream only what they wanted instead of the smorgasbord of all they were offered.
“You look at my kids and the way they watch TV is different than the way I watch TV,” said Lyons, who has an older son, Cameron, and younger daughter, Brooke, with wife Emily. “We talked about the big screen TVs, and now I watch my 18-year-old and 14-year-old walking around the house looking at their phone. They are back to a five-inch screen, but it’s mobile. They take it everywhere they go.”
That’s the issue facing West Virginia, the Big 12 and all of collegiate athletics. Because when a large segment of fans view games, they now do it via the internet, often through a secondary source sans payment that makes it difficult to pinpoint viewership numbers. That, in turn, affects ad revenue potential and thus the question becomes how to generate money from a set-up in which a product is often consumed for free?
“They are still watching it, but we are not calculating it the same as we did in the past,” Lyons said. “Think about years ago, you go with your wife or girlfriend to the mall, you had to find a TV to stand and watch a game while they shopped. Now you are sitting there watching it on your phone and it’s with you all the time. That’s what we have to get: What’s the change in landscape? Some of them have (broadband), but just on their phone. Some have cable, but instead load something like the ESPN app and watch from there.”
There’s little question the rising cost of cable, along with the proliferation of personal viewing devices, continues to cut into the market. The 11 major TV cable providers lost more than 1 million subscribers in 2015 and the trend continued through last year, when ESPN lost 621,000 subscribers in the month of November alone. That’s on top of an average loss of 300,000 a month – the number of subscribers cutting cable when the trend reached its perceived zenith in early 2017.
“You wish you had that crystal ball you could look at,” Lyons said. “But you go back 10 years and people said there wasn’t going to be any money in TV. Things were shifting then, and there are now different opportunities. I think TV will be there, it’s just that there will be more options and platforms and we have to adjust with the times and technologies. I think the potential revenue streams will be there in the platforms as well.”
It’s become a question of not only keeping or redirecting cord-cutters, but attracting those who never had cable initially. Over the next nine years, the projected losses for cable TV providers is from $57.7 billion to $55 billion, even considering inflation. But that will be more than offset by the growing demand for broadband, and its ability to stream live events and provide content any time and nearly anywhere, at least within the United States.
Media and communications business analyzer SNL Kagan expects broadband subscriptions to increase by more than seven million over the next nine years, reaching 71 million by 2026. That projects as an estimated revenue jump from $35.5 billion last year to $47.3 billion. Translation: There’s a market. The question for WVU and the Big 12, among others, is how to tap into it.
“You are still going to continue to have discussions with your TV partners,” Lyons said. “It’s about the changing landscape in their business and the more opportunities for streaming and new technologies and different platforms that we will continue using as a conference. Ultimately that decision will lead into TV discussions in the mid ’20s for our media rights.”
Indeed, the estimated advances in broadband viewership match-up nicely with the expiration of the Big 12’s $2.6 billion media rights deal in 2025. That gives the league, and its partners at Fox and ESPN, a window of opportunity in which to begin establishing how to capitalize on the emerging market, and continue to bring new viewers into the fold.
“The TV people don’t have an answer to it,” Lyons said. “No one does. What we need to do is to continue looking at it and studying it and seeing what options we do have. I think that you hear people talk about the cord-cutters, and the Amazons, the Netflixes, the Hulus. The platforms are all so different that you get, but do you get that 20- to 35-year-old group in each?”