As more and more streaming providers make deals with sports leagues, where will fans access the live content? In this clip from "The M&A Show" on Motley Fool Live, recorded on March 18, Fool.com contributors Travis Hoium and Jason Hall look at a few models the big platforms will use to get the largest audiences.
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Travis Hoium: My open-ended question is, I wonder where this fits in the streaming battle because I think what we're talking about is probably right. We're not going to have 30 streaming services, 5-10 years from now, but maybe we do have channels underneath them, it works a little bit like cable does today with the add-on services that you can have today. Do those sports rights fit under Netflix (NFLX 4.15%), Disney (DIS 1.54%), Amazon (AMZN 1.39%), HBO Max, and Discovery (DISC.A) (DISC.B) (DISCK)? Do you think that's naturally where they fit or is it like a fubo that's going to figure this out or something like that?
Jason Hall: I think eventually we see more consolidation into the larger players that want to have the biggest platforms to draw the largest audiences. I think there's going to be two models. I don't think we're going to see the models that have the streaming. It's like the Netflix model that are going to continue to focus on that and then we're going to have the hybrid models, like what Disney has done, which is to attract as much content as possible and have the tiers of service.
You think about everything that Disney has now, you have Disney Plus, you have ESPN, you have Nat Geo, you have Hulu, and then Hulu has a live TV option too. You have six different things that you can pay Disney for on their own. Or you can bundle them together. Hey, there's that bundling word that we all thought we'd be getting rid of with the death of the cable companies.
Hoium: It's just a different bundle, that ends up being more expensive. [laughs]
Hall: Then we're also going to have the stand-alone model, or we're going to have like the hybrid model that's going to be like YouTube TV and Hulu, where they're companies that offer just like the plug-in replacement for cable, the streaming cable. I think there are going to be a few companies that do that on a stand-alone like Sling. But I wouldn't be surprised to see something like Sling get acquired. To be honest with you.
But on the sports side, besides ESPN, it's just hard to justify they're being a stand-alone. I don't know, look at fubo one of them, they've had to pivot to other kinds of programming, I don't know, the sports. I have two minds of this because you think about sports on a global basis and there's so much sports. But getting the content is really expensive too and you need the really well-heeled companies that can afford to pay the massive amounts of money.
