80/20 Rule for TV Ratings: Why Sports Matter

According to TV ratings firm Nielsen, in 2023, the National Football League accounted for 93 of the year’s 100 most-watched TV shows in the U.S. market.

That’s a good example of the 80/20 rule, formally known as a Pareto principle, which suggests that 80 percent of consequences come from 20 percent of causes. 

More than a third of U.S. broadcaster NBC's viewing time in 2023, for example,  was attributable to NFL games and related programming, according to analysts at MoffettNathanson. CBS was even more dependent, at 40 percent. And at Fox, NFL games and other "shoulder programming" accounted for 63 percent of the time viewers spent with the network.

Beyond the NFL, sports programming drives a disproportionate share of revenue. 

Broadcaster	Top 20% of Programs (Revenue)	Remaining 80% of Programs (Revenue)
ABC	Major sporting events (e.g., NFL, NBA Finals)	Other sports programming, general entertainment
NBC	NFL, Olympics, Premier League	Other sports programming, general entertainment
CBS	NFL, NCAA March Madness, PGA Championship	Other sports programming, general entertainment
FOX	NFL, NASCAR, MLB postseason	Other sports programming, general entertainment

More significantly, National Football League revenue and profit also showed a Pareto distribution. in all cases, a relatively small percentage of programming time (five to 10 percent) is responsible for a disproportionately large percentage of profits (25 to 40 percent).

Network	Program Time %	Profit %
ABC	5	25
NBC	7	30
CBS	8	35
Fox	10	40

And that pattern has been in place for a while. 

source: Sportico 

That heavy draw of NFL content also suggests some potential churn issues for linear or video streaming firms showing NFL content, namely the danger of annual cycles of churn, as football season ends. 

Of course, there are other sports happening at other times of year than the NFL, but those sports do not have the drawing power of the NFL. Of course, once every couple of years there is an Olympics telecast that is highly viewed, but that event does not provide an annual or season-long upsurge in viewing. 

Hulu Redux or Something Else for Disney-Warner Brothers Discovery-Fox

If they can work out the details, ESPN (owned by the Walt Disney Company), Fox and Warner Bros. Discovery have reached an understanding on principal terms to form a new joint venture to build a new sports streaming service. 

Those of you who remember what happened with Hulu--originally founded by News Corporation, NBCUniversal and the Walt Disney Company in 2007--might assume the venture ultimately will prove unstable, as the present concept is for each of the firms to own a third of the venture. 

Many of you will predict that management issues ultimately will arise, that interest in participating might wane or that other priorities will convince one or more of the owners to sell their interests. 

Keep in mind that the venture will only license content from each of the owner firms: there will be no transfer of content ownership rights. 

And Disney says it will continue to develop its own branded “ESPN” sports streaming service, while Warner Brothers Discovery will continue to add sports to its “Max” streaming service. On the other hand, some will argue that the new service will represent a sort of “super bundle” of sports programming that could appeal to sports fans who might see the “one service” as preferable to buying three. 

Studies often suggest the “sports enthusiast” portion of the viewing audience ranges from 12 percent to 34 percent of viewers. So it is a significant segment of the audience. 

Study	Methodology	Target Audience	Estimated Percentage	Key Findings
Parks Associates, 2022	Online survey	U.S. broadband households	34%	34% of respondents consider sports "very important" in choosing a streaming service.
Magid, 2022	Online survey	U.S. pay-TV subscribers	18%	18% of respondents said sports are the "primary reason" for keeping their cable subscription.
Ampere Analysis, 2022	Consumer survey	Global markets	20-25%	Estimated 20-25% of global SVOD subscribers watch sports regularly.
Nielsen, 2021	Streaming viewership data	U.S. adults	12%	Sports accounted for 12% of total streaming viewing time in the U.S.
Light Reading, 2021	Survey of industry executives	Global pay-TV market	20-30%	20-30% of pay-TV subscribers are considered "avid sports fans".

Though the new venture might not directly address the cost of sports programming directly, it is among efforts content owners must make to transition to a future where streaming is the primary model, not linear distribution. 

Content Type	Average per-subscriber cost per month (USD)	Range
ESPN	$8.00	$7.46 - $8.54
Other National Sports Networks (e.g., TNT, TBS, NFL Network)	$1.50 - $3.00	Highly variable depending on network and specific rights
Regional Sports Networks (RSNs)	$3.67 - $5.00	Projected to rise. Varies by region, team popularity, and number of teams carried.
Basic Cable Networks (e.g., USA, TNT, TBS)	$0.50 - $2.00	Wide range based on network popularity and content type.
Premium Cable Networks (e.g., HBO, Showtime)	$5.00 - $12.00	Highly variable depending on network and specific content.
Broadcast Networks (e.g., ABC, CBS, NBC, FOX)	$0.00 - $1.00	Primarily advertising-supported model, but retransmission fees charged in some cases.
Streaming Services (e.g., Netflix, Hulu)	$1.00 - $3.00	Varied pricing models based on content library and tiers.

To be sure, this venture could create some economies of scale. If it leads to higher subscriber volume, that could potentially command better deals from rights holders.

It is conceivable the partners might avoid competition for some sports rights and operating savings in marketing might be feasible.

But potential competition from the hyperscalers (Amazon, Alphabet, Apple) would still remain in place, especially as those contestants look to add sports programming.

Netlfix: New Boss Just the Same as the Old Boss?

One sturdy storyline is “new boss just the same as the old boss.” So it is that some observers criticize video streamers such as Netflix for raising prices, just as legacy cable TV suppliers do. 

That seems unfair, as it is a charge that could be aimed at all sellers of products and services over time, especially when inflation rates are higher. And find any publicly-traded company whose basic imperative is anything other than “grow revenue and earnings” every year. 

Also, except for Netflix, virtually all other public streaming services are unprofitable, which is one reason why prices are being raised. 

Of course, one might prefer that higher prices over time are accompanied by higher value as well. 

So when others might argue that streamers such as Netflix are facing greater risks of becoming monopolists with weaker value propositions for consumers, that is a greater risk only if Netflix cannot grow its value proposition. 

That again is a general issue with all potentially market-leading firms. “New and improved” is almost a necessity, over time. 

We might agree with those who argue the “lower prices overall” advantage of streaming services only sometimes seems to be the case. Since many, perhaps most, consumers buy multiple streaming services, “saving money” is often, but not always an advantage, compared to buying a single linear subscription. 

It might be fairer to say that the key advantage is “choice” rather than “cost,” as a rule. 

Sudy	Year	Sample Size	Recurring Cost per Service (USD)	Avg. Number of Services per Household	Total Spending per Household (USD)	Key Findings
Parks Associates	2023	10,000 US households	$12.40	3.2	$40	Households with higher incomes subscribe to more services. Gen Z and Millennials lead in streaming adoption.
eMarketer	2022	1,000 US internet users	$15.00	2.7	$39.50	Increased cost-consciousness leads to subscription stacking and “churning” (switching between services).
GlobalWebIndex	2023	120,000 internet users across 25 countries	$10.80	2.4	$26	Global adoption of streaming is rising, with regional variations in preferred platforms.
Statista	2023	2,000 US adults	$14.20	3.0	$42.60	Original content and exclusive programming drive subscription decisions.
Nielsen	2022	5,000 US households with streaming subscriptions	$13.70	2.9	$39.30	Cord-cutting continues, with younger generations relying solely on streaming.

We might also argue that streaming is to linear video as many other forms of “internet” content are to legacy forms of content: more on-demand; more user-generated; more platform-oriented; pull (algorithm driven) from push (linear packaging); more consumption of “stories” or “items” rather than specific media. 

In and of itself, higher prices over time are not unusual, nor specific to Netflix or other streamers. What will draw attention is inflation rates that are higher than “background” rates of inflation. 

One might note that video streaming retail costs have risen faster than the background rate of inflation since perhaps 2024. On the other hand, it is also fair to note that almost no streaming services are profitable at such rates, either. 

Providers still are searching for the better formula for a sustainable business model.