Here’s the week’s news in TV economics in one sentence: Without live sports, the TV business could fall apart; and because of live sports, the TV business could fall apart.
Confused? Ha, well, blame the bundle, perhaps the most successful and most misunderstood business model in entertainment.
If the $70 billion television industry is on the verge of imploding, as viewer attention flees to DVR’d shows and Netflix accounts, live sports is the keystone keeping the roof from collapsing. And live is the key word. The bulging of the bundle and the rise of on-demand video have thinned out ratings and partially severed the tendon between live-viewing and lucrative advertising. But in a time-delayed video world, the biggest games still drive dependable live audiences, making sports rights the most valuable resource in the whole TV ecosystem.
… so, that’s why cable needs sports.
Here’s why sports could destroy cable …
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Last night’s halftime portion of the game featuring a performance by Beyonce averaged a 48.2/71 among the metered markets (56 major cities), one tenth better than the game rating of a 48.1/71. If that index holds up once the nationals are released, it would mark among the few times that a Super Bowl halftime would have out-rated the game average. Beyonce would share that distinction with Michael Jackson for Super Bowl XXVII in 1993, and last year’s SB XVLI when Madonna was the halftime performer. Typically, the Super Bowl halftime show rates between 3-6% below the game average.