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Here’s what Gen Z can say about this big business move: “It’s all about me.”
Earlier this month, Warner Bros. Discovery, ESPN and Fox announced plans to build a joint sports streaming service that would feature programming from at least 15 networks. The companies say the new app will be available in the fall, although the name and price are not yet known. And on Friday, Warner Bros. CEO David Zaslav revealed exactly who this innovative sports venture is targeting.
Zaslav said during the company’s fourth-quarter earnings call that the platform is aimed at “younger generations” who don’t subscribe to cable TV. “We’re losing those subscribers, and the traditional cable industry is losing those subscribers.”
While people of all generations are canceling cable contracts in favor of streaming, Gen Z consumers born between 1997 and 2012 are the most likely of any generation to buy and watch cable, according to data from Statista. shown to be the least likely. Data from Bleacher Report, a sports website owned by Warner Bros., shows a huge untapped market of consumers under 30 who like sports but don’t have a cable TV subscription. Zaslav said.
The challenge for traditional media companies like Warner Bros. was balancing the transition from cable to streaming. Sports remains highly profitable on cable TV, so even as consumers move away from terrestrial TV, companies cannot move sports to streaming without cannibalizing the revenue-driving segment of their business. Zaslav said that by targeting young people who are opposed to cable sports, Warner Bros. is trying to attract new viewers to its app rather than those who already pay to watch sports channels on cable. It is said that he intends to attract
The sports joint venture also aims to alleviate consumer frustrations about where to watch individual sporting events. For decades, consumers had to jump between cable channels to find the game they wanted. But with streaming, you have to shop around among far more platforms. Additionally, to attract streaming subscribers, media companies are also airing some games exclusively on their streaming services. As a result, a viewer may have to register just to watch one sporting event.
“The current consumer experience is messy, clunky, and somewhat confusing,” Zaslav said. “People have learned how to deal with it. Sometimes they search on Google for shows and sports locations, but rebundling makes a lot of sense.”
By consolidating all sports content from Warner Bros., ESPN, and Fox into one app, consumers can avoid paying for and managing multiple unique streaming subscriptions. Notably absent from the deal are Comcast (which owns NBC Sports, USA Network, Golf Channel, and streaming service Peacock) and Paramount Global (which owns CBS Sports and streamer Paramount+).
Zaslav also said he sees opportunity in bundling the service with Max, a streaming service that features content from HBO and Discovery, which could drive further growth for Warner Bros.
It remains to be seen whether the new sports app will actually see the light of day. Sports streaming service FuboTV filed a lawsuit Tuesday seeking to block the joint venture. According to Fubo, this service violates antitrust laws because it prevents Fubo from giving customers what they want and forces the platform to broadcast unwanted and expensive content. The company is seeking a jury trial and punitive damages.
It’s unclear how the lawsuit will affect the app’s release, scheduled for this fall. Mr. Zaslav did not mention the lawsuit in his earnings call, and none of the companies involved in the joint venture have issued public statements.
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