NeuLion SMT Conference Quotables: Industry Leaders Sound Off on the State of Sports-Media Tech

Execs of L.A. Clippers, Fox Sports, NFL, Activision Blizzard on next-gen viewing, social media, and more

A quartet of one-on-one interviews with L.A. Clippers owner Steve Ballmer, top Fox Sports execs Eric Shanks and Jamie Horowitz, Activision Blizzard Chairman Steven Bornstein, and NFL EVP Brian Rolapp headlined the Neulion Sports Media & Technology Conference (by SportsBusiness Journal/Daily/Global) in Manhattan Beach, CA, this week to address the hottest tech and business topics in the industry today. The top sports execs addressed next-gen viewing experiences, social media, cord-cutting, studio shows, live streaming, declining sports ratings, and more. Here are some of their observations on key topics.

Steve Ballmer, Co-Chair, Ballmer Group/owner, Los Angeles Clippers
On the learnings from a previous deal Microsoft did with the NFL: “I was excited about how Xbox might be used to change the viewing experience. What we learned is that nobody controls enough rights. The league didn’t control the rights; they had licensed them to four networks plus. So how do you actually get enough rights to build a next-generation experience, an experience where you can — I’ll use the football analogy — show what it’s like to be Tom Brady or Russell Wilson, to actually be there? It was impossible with the diffusion of rights.”

On what the next-generation viewing experience might look like: “What you see here [in a projected slide] is essentially a video feed, with the ability to superimpose other kinds of key information. Statistical information, alternative views of the game, fantasy information: you can weave all this into the viewing experience. Let’s say you’re a fantasy buff; you can see a players’ fantasy points superimposed directly on the player. Pretty good. Let’s say you want to explain the action to — let’s use my case, my wife, who’s not really an expert in basketball; you can call up the last play, in kind of an X’s and O’s way, and explain, Oh, that’s called pick and pop, this guy was supposed to go under the screen. [By the way], I’ve learned from my partners at Second Spectrum that there are eight kinds of pick and roll, and so their software can really help viewers learn the game.”

On social media and interactivity: “I think the concepts being pioneered on Twitter are, in fact, part of the future as well. How do you tie the world of broadcast into social? One question you have to ask is, does the content come into social or does social come into the content? And my belief is, if you’re watching the game long-form — meaning you actually want to watch the game — it’s probably social coming into the content. If you’re trying to snack and watch a minute or two minutes of the game, it might go either way: social into content or content into social.”

Jamie Horowitz, President, Fox Sports National Networks
Eric Shanks, President/COO, Fox Sports
Shanks on cord-cutting: “We’ve been pretty lucky across all the Fox Networks Groups that, over the last three years, we’ve added 60 million pay-TV accounts into all of our channels. And, on the sports side, Fox Sports 1 and 2 added subs over the past three years. So it might be a mixed bag as to how mature certain channels are and where growth can come. It’s no secret that there is a secular decline in pay TV, but then we’re also starting to see some material positive impact from the new skinny, OTT, whatever you want to call it, and, if digital growth for those businesses tracks the kind of growth we’ve seen in other digital businesses, we think that should grow pretty quickly.”

Horowitz on what appears to be a ratings decline in sports: “Different packages have had different experiences. It’s pretty easily explainable; you don’t have to look much further than the obvious thing, which is the election. News is way up, and everything that is competing with news now in the live space in one way or another is feeling the impact. For us, we’re almost flat from last year. Last year, we were down 7% at this time, and we came back at the last half of the season. [On] the packages of NFL that rely on the home markets, the Sunday-afternoon stuff, we’re seeing much less of an impact than, say, [on] the national windows, which really rely on people outside of the home markets paying attention and investing their time. That’s really where news, I think, is having an impact: on those windows where you’re more reliant on the outer market than the inner market.”

Horowitz on the investment in pre/postgame studio shows: “I think the studio shows cast a long shadow, because it’s sexy to write about. People say interesting, incisive things that lead to further coverage. So I think that shadow extends way beyond immediate ratings impact. But it’s true that our primary focus is on the main event, the live broadcast of the event.”

Shanks on live streaming: “Sales of the non-linear Super Bowl is really what is surprising me the most, [on] both the demand and pricing structure. We’re actually getting as much or more for a unit on the non-linear side than the top entertainment programs on linear, like Big Bang and Modern Family. We’re actually seeing, for a streaming-only product, real similarity between the top entertainment programs.

Steven Bornstein, Chairman, Activision Blizzard
On whether the cable business is dying: “I would say, when terrestrial AM goes away, that’s when the bundle goes away. I mean, the horizon line for that is another 50 years. Will it be less prevalent? Sure. Will the next generation of consumers have a lower chance of taking the bundle? Probably. But people will still take the bundle. It’s still a great value. For 100 bucks a month, you still get a lot of content choices. So I don’t see that ever disappearing, but I do see it getting marginalized a bit from where it is today.”

On what appears to be a major ratings decline in sports: “There is some explanation, but it’s also early: we’re only in the first quarter of the season. I wouldn’t write off the NFL or say this is a serious issue. I do think the election coverage has had an impact on consumption and ratings. Look, the elephant in the room is that millennials’ consumption of linear television is down. But it’s worth noting that their overall consumption of media and video is up. So it’s how you distribute and what platforms you use that is a more valuable discussion, as well as measurement. The ratings agency don’t measure digital very well, and they need to get up to speed on that. As that millennial, non-linear audience becomes more important, you’re going to have to adjust for that. I think the Olympics viewing numbers are probably more about the reporting of the viewing than what actually happened with viewership.”

Brian Rolapp, EVP, NFL, and President/CEO, NFL Network
On the Twitter NFL deal: “We are happy with the numbers. It’s about what we expected in terms of average-minute audience and reach. It is a predominantly mobile audience, it’s a younger audience, and it’s a higher international skew. The whole idea going into it was to make it incremental, and I think it has proven that out. The video quality was great, there was very little buffering, and fans seemed to be very happy. I think the only complaint they saw is that Twitter users want to have their own customized timeline on the broadcast.”

On exclusive vs. non-exclusive distribution models: “The secret of our model is, we don’t have one broadcast partner; instead, we have a handful.”

On the feared decline in pay TV: “I think there’s no question pay TV is under pressure and will look much different in five years, but the bundle still matters. The bundle will be a bit different. The partners might be the same, or they might be different. And we won’t know all the details until we get there. But, either way, we will stay focused on reach and audience.”

On the ability to grow the pay-TV ecosystem with premium channels and services: Red Zone channel, I would argue, is one of the greatest premium channels created in the last 15 years, because not only is the product so good but the model actually works for us and the cable operators. The operators make money when we sell a new Red Zone subscription. So we actually believe there’s lots of opportunity to grow organically in pay TV even though it is a flat to down market. One of the ways we’re growing is that we’re having success in the OTT platforms. So, as the pay-TV market shifts with skinny bundles, we have had some success there. We’re aggressively looking at how we can take the NFL Network and the Red Zone Channel direct to consumers.”

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