Will US sports streamers condemn linear cable advertising?

In early September, former Disney CEO Bob Iger was the latest to predict linear TV's incoming death. If the decline of linear audiences is nothing new, TV advertising has remained stable and overcome the cord-cutting hurdles until now. Subscribers were leaving but ad money was staying. However, the acceleration of the cord-cutting trend, even hitting virtual MVPDs, added to the increasing amount of sports rights awarded to streaming platforms, may spell the end of this anomaly. If the pay-TV market has been struggling for many years already, the cord-cutting trend has even strengthened in 2022. The five largest traditional video providers (cable operators Comcast and Charter, together with Dish and DirecTV), which account for around two-thirds of the total US pay TV market, have experienced a decline in their subscriber base by more than 7% in 9 months. For the majority of them, the falling rate has worsened quarter after quarter. More surprisingly, vMVPDs, which long benefited from people ditching their traditional cable subscription, turn out to be also affected by this phenomenon and were not spared for the first half of the year, experiencing a much lower growth or even a decrease. Hulu Live TV lost around 300K clients in August 2022 but added 400K subscribers in the last financial period. The automatic bundling of the service with Disney+ and ESPN+, which was introduced last December, plays its role in this increase. The end of the year could turn out to be even more critical for Hulu since the termination of the content-sharing deal with NBCUniversal becomes concrete. After posting three consecutive negative quarters and falling to its level prior to 2018, Sling TV also bounced back in the third quarter, adding more than 200K clients. But these positive results should probably be seen in the light of the beginning of a new football season, rather than a real renewed interest in the platform. Inevitably, this downward trend cannot remain without consequences in the advertising industry. It is probably a matter of time before the advertisers start deeply following eyeballs, by shifting budgets from linear cable to AVOD. Indeed, Dataxis expects the US AVOD market to overtake the traditional advertising TV market by the end of 2025. This trend should be strengthened by the introduction of an ad-supporter tier by both SVOD giants Netflix and Disney+ in the coming days. This should make up for recent trouble experienced by YouTube, which just posted a negative evolution in its advertising revenue, for the first time. Sports will play a key role in the shift from linear advertising to streaming platforms. Indeed, sports broadcasting represents not only a significant part of linear advertising budgets but also a type of programming yielding...