Weekly Column: Advertising and Paywalls in Hollywood-Sports Business

In his capacity as a Columnist for California Sports Lawyer®, Founder and Managing Attorney Jeremy Evans has written a column about the common denominator between advertisements in streaming, paywalls, mergers and acquisitions, antitrust laws, and artificial intelligence in intellectual property in Hollywood and sports content.

You can read the full column below.

What do advertisements in streaming, paywalls, mergers and acquisitions, antitrust laws, and artificial intelligence in intellectual property have in common? Each of the aforementioned mark the pain points for growth into entertainment, media, and sports content on streaming platforms and linear cable stations. People enjoying content are about to embark on a viewing mission that will see substantial stations in how content is consumed.

Amazon is introducing advertisements onto its Prime Video streaming platform, but for a few dollars more one can avoid the ads. Will consumers pay the additional freight? Amazon figures that between the price increase and the advertisement dollars, it will see further profitability or at least a move towards profitability as its ecommerce business has supported the streaming business. The lesson learned here is that eventually the stockholders in public companies come calling. In other words, after initial investment, unsurprisingly, owners want to see profitability.

Despite much chagrin, NBCUniversal-Comcast owned Peacock hosted the exclusive showing of the Miami Dolphins vs. Kansas City Chiefs football game on its streaming platform through a paywall. The move is akin to HBO hosting a boxing match for a fee to watch. The result was that people who wanted to watch the game had to pay to watch it. This might be the solution to the National Football League’s antitrust problem where outside vendors like Peacock control which games get show versus the NFL blacking out games through NFL Sunday Ticket, which is currently under fire in the courts. The NFL gets paid, which trickles down to the teams and players, while a platform looking for more subscribers gets exclusive live sports content to drive viewership that leads to further exploration into the entertainment streaming platform. With the NFL leading again in viewership by a wide margin, it seems to be a winning strategy. Divide and conquer is the solution to further raising the price on NFL content, evidenced by the resurgence of Monday Night Football. Popular on-air talent always helps as well.

Mergers and acquisitions and the use of artificial intelligence could help sports and Hollywood content players (often housed under the same company, but in different divisions), but whether it is there saving grace is another question. Mergers can help, but there is always uncertainty with antitrust approval. At some point, the profit margins may not make sense especially for a streamer that is not in the top three or four in subscribers like Netflix, Amazon, Disney+, and MAX. Artificial intelligence (“A.I.”) might be a way to create content, but union deals with WGA and SAG-AFTRA prevent some use of A.I. A.I. is also limited by intellectual property protections. While using A.I. might be useful and potentially less expensive and not subject to union rules in certain matters, Hollywood is limited in its current use of generative A.I. A.I. is more likely to be used in the margins to grow profits.

Hollywood and sports seemingly need each other to survive and thrive. Business leaders will continue to look for ways to improve the bottom line. One thing is certain, advertisements will continue to play a major role in the distribution and viewing of entertainment, media, and sports content. Social media will also continue to take views away from streaming and linear television as newer generations have a higher tendency to want to consume content in their time and more quickly.

About Jeremy M. Evans:

Jeremy M. Evans is the Chief Entrepreneur Officer, Founder & Managing Attorney at California Sports Lawyer®, representing entertainment, media, and sports clients in contractual, intellectual property, and dealmaking matters. Evans is an award-winning attorney and industry leader based in Los Angeles and Newport Beach, California. He can be reached at Jeremy@CSLlegal.com. www.CSLlegal.com.