Alphabet
’s
GOOGL
division Google is consistently building strategic partnerships to increase viewership on its video streaming services.
Per
The Wall Street Journal
, Google is having final stage discussions with the National Football League (NFL) to acquire exclusive rights of the NFL Sunday ticket for streaming Sunday games on YouTube TV and YouTube Primetime Channels.
NFL Sunday ticket is a subscription-only package, which lets football viewers watch afternoon matches that are not available on the local TV channels, on the streaming platform.
Currently, the Sunday package is carried by the satellite broadcaster, DirecTV under a deal, which is expiring this season. DirecTV pays $1.5 billion annually to NFL for Sunday ticket exclusive rights.
Reportedly, Google is in talks to pay $2.5 billion per year to NFL for Sunday ticket rights.
Benefits of Sunday Ticket Rights
Google’s latest stance to win exclusive NFL Sunday ticket rights is a step forward to strengthen its streaming efforts. The NFL deal will significantly increase Google’s sports credentials.
Moreover, Google is expected to gain momentum among football lovers by showing Sunday NFL matches on YouTube TV and YouTube Primetime Channels.
Per the company stats, YouTube TV crossed more than 5 million subscriptions and trial accounts in June 2022. Additionally, viewers can individually subscribe to over 30 streaming services on Primetime Channels.
The addition of Sunday ticket to both YouTube TV and Primetime Channels will help Google to generate more revenues from subscription-based services.
This will contribute well to Google’s parent, Alphabet’s Google services’ revenues in the upcoming period.
Revenues from the Google services business increased 2.5% year over year to $61.4 billion, accounting for 88.8% of the total third-quarter revenues.
Competitive Streaming Market
Alphabet with its recent live sports streaming move remains well-positioned to capitalize on the growth prospects present in the booming video streaming market.
Per a Research and Markets
report
, the global video streaming market is likely to hit $330.5 billion by 2030, witnessing a CAGR of 21.3% during the 2022-2030 forecast period.
Given the huge potential in the aforesaid market, major companies like
Amazon
AMZN
,
Apple
AAPL
and
The Walt Disney Company
DIS
are also making strong streaming efforts especially in live sports to gain market share.
Reportedly, Amazon, Apple and Disney’s subsidiary ESPN were in the NFL Sunday ticket bidding battle with Alphabet’s Google.
Amazon entered into an agreement with NFL for exclusive rights of Thursday night football package, at an average yearly price of $1.2 billion per season. The Thursday night matches will be shown on AMZN’s Prime Video streaming service. Amazon has lost 48% in the year-to-date period.
Apple reached a 10-year contract with Major League Soccer in June. AAPL pays nearly $2.5 billion to the League for streaming matches on its TV+ platform. Additionally, Apple streams Major League Baseball on Friday nights during the regular season. Apple moved south 23.7% in the same timeframe.
Disney renewed its deal with Formula 1. Per the terms, ESPN Networks in the United States will continue to show Formula 1 races through the 2025 season. Shares of DIS were down 43.9% in the year-to-date period.
We believe Amazon, Apple and Disney’s growing initiatives in the video streaming space remain a major threat to Alphabet’s market position.
Shares of Alphabet have been down 38.2% in the year-to-date period compared with the
Computer and Technology
sector’s decline of 35.7%.
Currently, Alphabet carries a Zacks Rank #4 (Sell).
You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
.
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