Many, many years from now, when you die—yes, you—there will be, almost certainly, a television in the room. Barring a sudden, ignominious end (firing squad, acid bath, peevish hippo), you’ll slide into the Big Dirt Nap while under the all-seeing eye of a TV; in the event it’s been turned off, you may be able to catch in the screen one last glimpse of yourself as you go.
If the very thought of being outlasted by a purportedly obsolete technology rankles, that’s perfectly natural. The whiskey, after all, bears a grudge against the decanter. Now, imagine the attendant mortification of the digital futurist who finds himself in a similar situation. For as long as anyone can remember, he’s been nattering on about the death of TV, and yet when the end comes, his final words are drowned out by the gavel of a syndicated divorce-court judge.
Despite the ongoing erosion of the pay-TV bundle and evidence suggesting younger people largely consider TV to be an outmoded style of home furnishing—a credenza that lights up, or one of those weird old record players with the flaring brass horns—the rush to bury the medium is unseemly. Actual death is far less ambiguous, and a whole lot quieter; where TV is headed is more akin to an unhurried senescence. First, the morning tea and the peppy tedium of The Price Is Right, followed by a visit from a local dog and then arts and crafts in the activities room.
If you’re reluctant to accept the metaphorical upgrade from irrevocable non-being to a state of dotty old age, have a look (er, listen) at (to) the radio. Decades after TV was said to have administered the coup de grâce, terrestrial radio still throws off $15.8 billion in annual revenue. As diminished as it now may be when compared to its pre-TV heyday, radio remains a viable business. But for vaudeville and Lawn Jarts®, nothing in American life ever really dies.
Which brings us to the once-mighty regional sports networks, which in recent years have manifested a Rasputinian unwillingness to be killed off. Much of this accidental resilience is a function of the overarching popularity of live sports, especially as it pertains to local fandom. While all three leagues are served by generous national distribution schemes, the vast majority of the consumption of NBA, NHL and MLB games is realized via the RSNs. The only top-tier U.S. sports league that doesn’t rely almost entirely on local deliveries is the NFL, and by now you’ve probably come to the realization that Roger Goodell’s fief is entirely sui generis, and that it conforms to its own arresting and irrefutable inner logic.
Therefore, let’s just get the axiomatic part out of the way here: As local fandom is the lifeblood of American sports, the leagues cannot abide a disruption in the transmission of their live games. As such, regardless of who winds up owning the RSNs or how the local broadcast model ultimately shakes out, there cannot and will not be any interruption in service. It will take a lot more than a bankruptcy filing to diminish media’s home-field advantage.
This isn’t to say that the current model isn’t crumbling under the weight of its own antiquated architecture. In the last eight years, pay-TV subscriptions are down nearly 40%, with penetration of the cable/satellite/telco-TV bundle having dropped to fewer than half of all U.S. TV homes as of last fall. Meanwhile, for all the chatter about the inevitable shift to a direct-to-consumer model, streaming remains the world’s most expensive life preserver; in the last year the owners of the Big Three broadcast networks alone have squandered some $8.34 billion on their DTC platforms. (The one service that makes a killing in streaming is Netflix, and the higher-ups there remain firm in their conviction that live sports is a loss leader.)
What tends to get overlooked in all the clamor of the platform debate is the existence of a technology that may carve out a third path, a middle ground between linear TV and streaming. While a lot of the data on the ATSC 3.0, or “NextGen TV” protocol may be of interest only to propeller-heads, early deployments of the technology have shown great promise. And while Evoca, the first company to crack the code on offering an inexpensive local sports play, went under at the end of 2022, the tech upon which the service was built remains a potential game-changer.
Launched in Boise, Idaho, Evoca offered locals a 60-channel suite of live sports and entertainment for just $25 per month. The service expanded to nearby Portland, whereupon it hashed out a deal with the Root Sports RSN, home to the NBA’s Trail Blazers. Evoca’s hockey puck-sized receivers and IP-based delivery of broadcast-quality signals allowed local hoops fans to take in live games for a fraction of the cost of a cable subscription, and by all accounts, the service ran with little lag/jitter or other audio-visual disturbances.
Evoca in short order began expanding beyond the Pacific Northwest, inking a deal with the Denver Nuggets/Colorado Rockies RSN Altitude Sports. The startup was in the midst of clearing a deal with another NBA-affiliated RSN (think Salt Lake) when its funding ran out. Subscribers were allowed to retain their receivers, which may come in handy should another NextGen TV outfit look to pick up where Evoca left off.
One factor that seems to have accelerated Evoca’s demise is its inability to strike a deal with the Sinclair Broadcast/Diamond Sports Group-owned Bally Sports RSNs. Last summer, as the service expanded to the Phoenix market, the co-founder and CEO Todd Achilles was actively courting Bally Sports Arizona, home to the Phoenix Suns, Arizona Coyotes and Arizona Diamondbacks.
Achilles later said that Sinclair declined to cut a deal with Evoca. The issue had less to do with the actual sublicensing of the RSN and more to do with a dispute over incidental retransmission-consent fees related to Sinclair’s local broadcast stations. In any event, investors in Evoca suggest that Sinclair’s refusal to work with the startup not only contributed to Evoca’s demise but may in the long run wind up impacting DSG’s own RSNS. (If ATSC 3.0 represents an alternative to a shrinking pay-TV universe and the in-utero DTC scheme, the Bally Sports nets may have missed out on a chance to fine-tune a market-tested product.)
Then again, as one of the early backers of ATSC 3.0, it’s likely that Sinclair has its own ideas as to how the technology might be deployed in the service of its RSNs. While the company hasn’t made explicit mention of such a notion in its quarterly earnings calls, the protocol has been name-checked in the fine print of some recent filings with the Securities and Exchange Commission. In these cases, it would appear that NextGen TV may be harnessed as a means to augment the company’s local broadcast signals, rather than serve as an alternative distribution mechanism for the RSNs.
In the meantime, anyone with a bunch of VC funding and a little moxie may want to have another go at serving up local sports content via ATSC 3.0. The technology has been deployed in dozens of major U.S. media markets, including Los Angeles, Boston, Denver and Miami with other biggies (New York, Chicago) in the works. Including areas that have been targeted for future rollouts, up to 80% of all markets should be up to speed before the end of this year.
