For this major business move, Gen Z can say: It’s all about me.
Earlier this month, Warner Bros. Discovery, ESPN, and Fox announced plans to create a joint sports streaming service featuring programming from at least 15 networks. While the name and pricing are still unclear, the new app will premiere in the fall, according to the companies. And on Friday, Warner Bros. Discovery chief David Zaslav revealed exactly who this game-changing sports venture is targeting.
The platform is for the “younger generation” that does not subscribe to cable, Zaslav said in the company’s fourth-quarter earnings call. “We are missing those subscribers, and the traditional cable industry is missing those subscribers.”
While people from every generation are canceling their cable subscriptions in favor of streaming, Gen Z consumers—born between 1997 and 2012—are the least likely of any generation to purchase and watch cable, Statista data shows. Warner Bros.’ own data from Bleacher Report, the sports website it owns, signals a hugely unaddressed market of consumers under 30 years old who love sports but don’t own cable subscriptions, Zaslav said.
The problem for traditional media companies like Warner Bros. has been balancing the shift from cable to streaming. Sports are still highly profitable on cable, so even as consumers leave linear television, companies can’t move sports to streaming without cannibalizing a revenue-driving segment of their businesses. By targeting young, anti-cable sports lovers, Warner Bros. intends to attract a new audience to its app, rather than the group of people already paying to watch its sports channels on cable, Zaslav said.
The joint sports venture also seeks to alleviate consumer frustrations around figuring out where to watch individual sporting events. For decades, consumers have had to bounce between cable channels to find their desired game. But with streaming, they must hunt among far more platforms. Moreover, in an effort to attract subscribers to streaming, media companies also show some games exclusively on their streaming services. As a result, viewers must sometimes subscribe just to watch one sporting event.
“The consumer experience right now is cluttered, awkward, and somewhat confusing,” Zaslav said. “People have learned how to deal with it. You Google where a show or where a sport is, but rebundling just makes an awful lot of sense.”
By bringing all sports properties from Warner Bros., ESPN, and Fox to one app, consumers can avoid paying for and managing multiple unique streaming subscriptions. Notably absent from this deal are Comcast (which owns NBC Sports, USA Network, the Golf Channel, and streaming service Peacock) and Paramount Global (which owns CBS Sports and streamer Paramount+).
Zaslav also sees opportunity in bundling the service with Max, the streaming service featuring HBO and Discovery content, which he said can drive more growth for Warner Bros.
Whether the new sports app will actually see the light of day remains to be seen. Sports streaming service FuboTV filed a lawsuit on Tuesday to block the joint venture. The offering violates antitrust law, according to Fubo, because it would prevent Fubo from giving its customers what they want and force the platform to broadcast unwanted and expensive content. The company is seeking a jury trial and punitive damages.
It is unclear how the lawsuit may impact the app’s intended launch this fall. Zaslav did not address the lawsuit in the earnings call, and none of the companies involved in the joint venture have made public statements.