Yesterday, ESPN announced it is launching a similar feature to Apple Sports on the ESPN App and ESPN.com called “Where to Watch”. All ESPN games will have one-click access, and some partner networks will be directly linked with one-click access to games (e.g., NESN and Monumental Sports).
But, the question is whether it will offer something similar to the tune-in notification from Apple Sports. I argued in February that model is a proof-of-concept for what comes after the cable box because, in theory, it helps to drive more viewership to partnering sports apps.
Both are bets on owning the viewership of sports fans in a post-linear, digital-first, consumer-first and retail-first world. They reflect the challenge that David Perpich—a New York Times (NYT) executive who is currently Publisher of The Athletic—described: How can the NYT and other legacy media businesses participate in “fandom” because it is “so huge”?
The NYT’s $500 million bet on The Athletic was on “one million subscribers addicted to coverage of their own local and favorite sports teams.” Now, The Athletic is going narrower and deeper into sports collectibles in a recently-announced partnership with eBay “to help everyone from aspiring to seasoned collectors better understand the sports memorabilia market and make smarter purchasing decisions.”
This reads like an apples-to-oranges comparison, but each is a bet on monetizing sports fandom: Apple and ESPN seek to recapture the magic of fans turning into watch sports at scale. Whereas, The New York Times ignores TV altogether and instead dives deeper into the more niche transactional aspects of fandom.
The question is, who is building a better business for monetizing sports fans?
Key Takeaway
The Athletic’s model with eBay suggests the best models for serving sports fandom are dynamic, product-oriented, and focused on achieving smaller scale across multiple distribution channels.
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Fandom & Friction
First, there is a quick backstory to this essay: At 3pm on Tuesday, Apple TV sent me an iPhone notification that FC Barcelona’s match against Rayo Vallecano would start at 330pm on ESPN+. I received this notification because I have listed FC Barcelona as one of “My Teams” in the Apple Sports app (which I wrote about in February). I turned on my smart TV (not an Apple device) and watched the match on the ESPN+ app.
Notably, I received the notification from Apple and not ESPN. Also, Apple’s notification launched a user journey it did not control. Once I went to my Smart TV, Google TV software controlled the viewing experience and ESPN controlled the login experience. I had to find the ESPN+ app.
The ESPN+ app on my TV asked me to log in via a QR code. That did not work despite two attempts. I then tried to watch the match via Hulu—which integrates ESPN+—and Hulu crashed. I was then forced to reboot my TV. Long after the 3pm notification, I could access the match.
If I had not been an ESPN+ subscriber, it would have taken additional time and effort to sign up for a new app. The urgency of “must-see TV” from a notification is lost in any “friction” created by the consumer experience of tuning in, whether on an Apple device or a smart TV.
It’s About The User Journey
That frustrating user experience highlights the key difference between betting on TV tune-in to capture fandom versus betting on sports collectibles. The monetization of fandom increasingly demands a frictionless user journey.
I argued back in June that the economics of pay TV require ESPN or NBCUniversal to build a platform that “gets its subscribers addicted to watching their own local and favorite sports teams.” NBCUniversal made some progress with Peacock during the Olympics. The platform “won praise from viewers and reviewers for technical and design achievements that let fans quickly find the events and recaps they want” across devices. Peacock subscribers paid for a product that made Olympics viewing easier and more fun.
By comparison, ESPN’s “Where to Watch” is a much simpler value proposition: ESPN Digital platforms are link aggregators for ESPN and third-party live streams of sports broadcasts. But, the user journey has more friction than Peacock subscribers experience because it requires login to third-party streaming apps (ESPN boasts it has data from over 250 streaming services).
It is also a suboptimal business model because it does not always monetize the user. According to a May 2023 report from CNBC’s Alex Sherman, ESPN “would take a cut of subscription revenue from a user who signed up for a streaming service through the ESPN app or website”. If a customer already subscribes to a given service, “ESPN would collect no money and just provide the link as a courtesy."
The User Journey Athletic↔eBay
The NYT partnership with eBay appears to always monetize the user:
“The exclusive collectibles partnership, a first for The Athletic, will make relevant eBay collectibles and memorabilia discoverable through The Athletic’s collectibles content and various product platforms. The partnership will allow readers to seamlessly search and purchase collectible items from their favorite players, teams, leagues and sports, powered by The Athletic and eBay.”
The key word in that quote is “seamlessly” because the partnership monetizes the user journey in three ways:
Subscriptions (to The Athletic or a broader NYT bundle)
Advertising (on The Athletic)
Affiliate (eBay payments to NYT for all completed sales from referrals)
The NYT has had success with the affiliate model: Its Wirecutter product review and recommendation offering helped to drive $152 million in Other Revenues in 2023 (up 33% from 2022).
So, there is little to no friction in monetizing a sports fan who wants to learn more about the collectibles market and/or buy a collectible. eBay will be integrated “across The Athletic’s ecosystem, including team and player pages, editorial articles and live blogs, social posts and newsletters.”
Notably, the only friction would be for eBay users who do not have accounts with The Athletic or NYT users who do not have accounts with eBay. The former is more likely than the latter given that there are over 132 million active users of eBay, whereas the NYT has 10.8 million digital-only subscribers as of Q2 2024.
(Re)Defining Fandom
I wrote in “Apple Sports Disrupts Pay-TV Sports” that ESPN’s pain point is “the economic models of pay television assume scale and scale in streaming is a different beast.” It is paid top dollar by cable distributor for its six channels (nearly $10 per subscriber per month per channel), and cord-cutting is eating into that model. The sense is that it can convert some percentage of 102.3 million unique visitors (as of July, according to Comscore), or 5% of Apple’s devices base) into streaming viewers, regardless of whether it is hosting or monetizing those views.
The Athletic’s model with eBay suggests the better models for serving sports fandom are dynamic, product-oriented, and focused on achieving smaller scale across multiple distribution channels. The NYT and eBay seem confident that different fans will pay for varying aspects of fandom ranging between subscriptions and commerce.
It is too soon to tell whether this venture with eBay will be successful. But, its message to the sports media marketplace is clear: Fans will spend more money with in sports media if you build them holistic product experiences where they can spend money to go deeper and broader into their fandom. That is a concept that ESPN, Disney and NBCUniversal are obviously struggling to understand and execute.