NFL's Black Friday game is the latest warning sign for traditional TV

The picture above is credited to Jacob Kupferman and was taken using Getty Images. Rewritten: The photograph presented is attributed to Jacob Kupferman and captured through Getty Images.

This week, the Miami Dolphins and the New York Jets are set to compete in the National Football League's inaugural Black Friday game. However, it won't be aired via the customary broadcast or cable channels. Instead, the game will be exclusively streamed on Amazon's Prime Video.

The NFL has chosen to create a fresh Thanksgiving custom with a streaming platform, not through a broadcast or cable channel. This decision further highlights the problems traditional or linear TV is currently experiencing, with a decrease in ad earnings and customers resorting to cable cutting.

The game between Amazon and NFL on Black Friday is an extension of their agreement for "Thursday Night Football", which aided in a 6% increase in viewership compared to the previous year. As the game is being streamed the day after Thanksgiving, Amazon has a chance to attract a portion of the holiday viewership, which was at an all-time high last year.

Brian Rolapp, who is the NFL's main person in charge of media and business, recently informed CNBC's Julia Boorstin that he doesn't like to make guesses about the ratings. Nevertheless, he did mention that he expects the ratings to be positive. Keep in mind that the game on Black Friday will begin at 3 p.m. ET.

Football has become a well-established custom for Thanksgiving Day, featuring prime games with the Detroit Lions and Dallas Cowboys over the course of many years. This year, the games will be aired by CBS, NBC, and Fox.

During a media conference on Tuesday, executives said that the NFL and Amazon are aiming to make the Black Friday game a yearly event. One way they plan to increase Amazon's e-commerce sales is by including QR codes on the screen with links to Black Friday deals. After the game, an exclusive concert by country music legend Garth Brooks will take place.

Live sports programming is increasingly moving from traditional cable to online streaming platforms. This is evident through deals like Amazon's 11-year agreement for "Thursday Night Football" and YouTube TV's "NFL Sunday Ticket" package. Warner Bros. Discovery also recently introduced its Bleacher Report Sports Add-On Tier for their flagship streaming service Max. This add-on gives users access to hundreds of live sports events. It's clear that streaming is becoming a popular choice for sports fans.

For a while now, ESPN has dominated traditional television when it comes to sports programming. However, there's a chance that this could all shift when the long-standing cable company brings all of its programming to streaming in a planned direct-to-consumer release.

Despite the rise of streaming, the existence of cable and traditional television continues to be sustained by sports programming, at least for now.

In the beginning of 2021, Nielsen, a company that collects data, said that traditional TV was less than half of the total TV viewership in July. However, linear TV came back in August and September. The rise was mostly due to the comeback of college and professional football. A report by Nielsen released last month stated that ESPN had the most-watched telecasts for the month of September. Out of the top 11 shows, 10 were related to football.

ESPN has managed to endure the challenges of diminishing TV viewership by obtaining a "modest increase" in advertisement earnings in Disney's latest quarterly report, despite the overall decline in TV revenue for the company.

Macquarie analyst Tim Nollen believes that the television industry is being sustained by sports programming, and ESPN plays a significant role in this.

ESPN's strong foothold in sports programming could eventually endanger traditional TV. The launch of ESPN's direct-to-consumer service, which will provide more features than the existing ESPN+ app, could trigger a shift among sports enthusiasts to completely give up bundled services.

According to UBS media and telecom analyst John Hodulik, if ESPN releases their direct-to-consumer product online and prices it right, it could encourage more people to cancel their cable subscriptions, as they would have access to live sports without needing a bundled cable package. This is something that many people seem to be anticipating.

During an interview with CNBC's Boorstin on Nov. 8, Bob Iger, the CEO of Disney, officially announced that an ESPN flagship will be made available directly to consumers before the year 2025. This move will certainly shake up the world of sports programming.

However, there are individuals who doubt that ESPN's entry into the streaming market will have a significant impact in a short period of time.

According to Patrick Crakes, a sports media expert and former Fox Sports executive, ESPN cannot simply switch from pay TV to direct-to-consumer (DTC) streaming without considering the financial impact. He explains that DTC streaming doesn't have the same widespread appeal as pay TV, despite the latter declining in popularity. Therefore, making the transition would not be easy.

According to Crakes, the coming times show a renewed pay TV package with added streaming products and traditional bundle economics involved. This reminds us of the recent deal between Disney and Charter, where Disney+ and ESPN+ are now a part of some Spectrum cable packages.

However, media companies who have not yet taken the step to bring their programming to the world of streaming may face some difficulties in the future.

Is Fox Vulnerable?

During the fifth week of the NFL season on October 11, 2020, a camera operator from FOX Sports was present at Mercedes-Benz Stadium in Atlanta, Georgia to film the game between the Atlanta Falcons and the Carolina Panthers.

David J. Griffin, an Icon Sportswire photographer, captured a stunning image that caught the attention of many. The photo showcases a football player making an impressive catch during a game. The photo has garnered a lot of praise and admiration from sports fans all over.

According to Nollen from Macquarie, Fox Corporation will suffer the most from the reduction in ad sales, which is causing a slowdown in the market. Macquarie and its affiliated companies have a significant stake in Fox Corp of at least 0.5% equity securities.

Many media businesses, like NBCUniversal and its Peacock platform, have shifted their focus to streaming services. This helps to make up for a slump in traditional linear advertising revenue. However, Fox is experiencing a problem as it hasn't made the same move. Unlike the other media businesses, Fox doesn’t have its own paid streaming platform, leaving it reliant on its free, ad-supported service called Tubi.

According to Nollen, Fox chose to emphasize the bundle a few years back and it turned out to be very successful for them. However, if more people abandon traditional cable and switch to streaming sports from other providers at a faster rate, Nollen doesn't comprehend what Fox's strategy will be.

When questioned for their thoughts, Fox referred to a statement given by Steve Tomsic, the CFO of Fox Corp., during the Bank of America media conference held in September.

The speaker expressed their vision of a future in which even big names like ESPN choose to go direct-to-consumer (DTC). However, they are unsure of the effect this will have on their specific company or the industry in general. They suggest that if a sports package featuring various networks were to surface, Fox would likely be the top choice for those wanting to combine their content with another service. This is due to the strength of the sports programming offered by Fox.

Note: NBCUniversal and CNBC are under the ownership of Comcast.