Alphabet Inc.'s (GOOG) YouTube just inked a streaming deal with Major League Baseball as competition rises in the disrupted entertainment industry. As providers understand that a major reason customers sign up for online TV services is live sports, the number of partnerships between media firms and sports leagues are growing at a fast pace.
Google's deal with the MLB, which will make baseball's live television channel available on the YouTube TV streaming television service, comes as media companies such as Sony Corp. (SNE), Hulu and ATT Inc.'s (T) DirecTV race to grab market share as more consumers shy away from traditional providers like Comcast Corp. (CMCSA). At the same time, behemoths such as Walt Disney Co. (DIS), with its new direct-to-consumer ESPN sports streaming service set to roll out in the spring, and Amazon.com Inc. (AMZN), with its recently announced pay-per-view package for Ultimate Fighting Championship (UFC) bouts, have doubled down on their sports entertainment segments. (See also: Amazon to Offer Pay-Per-View Packages.)
The Great Migration
On Friday, social media giant Facebook Inc. (FB) signed a deal with the MLB for exclusive rights to stream 25 afternoon games on the social network in the U.S., marking the first time a major American league has agreed to show regular season games exclusively on the platform, as reported by Bloomberg.
"Much like the migration of sports from broadcast to cable, you’re reaching these milestones where the combination of the financial incentive and the audience allow you to make the next great leap,” industry consultant Lee Berke told Bloomberg.
Alphabet and other tech giants' move into the industry once run by major cable and satellite providers such as Comcast and Dish Network Corp. (DISH), as well as cable channels such as 21st Century Fox Inc. (FOX), has led companies to consider strategic M&A. Late last month, Comcast made a surprise bid for U.K. broadcaster Sky plc, positioning itself in a possible bidding war against Fox and Disney. (See also: Why Comcast's Sky Bid Could Hurt.)