Sports ratings need to start including digital–not just TV: CEO

Key Points
  • Last NFL season, ratings were down 8 percent—and they're down double-digits this season—as more fans choose to stream games digitally instead of watching them live on TV.
  • Currently, sports ratings only include the live broadcast.
  • Sports should report total audience numbers that include all platforms, Bruin Sports Capital founder and CEO George Pyne said.
Why ratings should include everyone who watched, not just TV audience: Expert
Why ratings should include everyone who watched, not just TV audience: Expert

Measuring the audience for sporting events should include the total audience numbers, not just the fans watching the live broadcast, George Pyne, Bruin Sports Capital founder and CEO, told CNBC on Friday.

NFL TV ratings were down 8 percent last year. That decline has worsened in the 2017 season: Ratings were down 12 percent in week one and 15 percent in week two. This could be attributed to the fact that fans are streaming games on digital platforms such as computers or iPads, instead of tuning in on TV.

Pyne isn't sold that digital was the only reason for the decline. He said other factors were at play, including the fact that 2015 was a strong season. Still, he agrees that the way the audience is counted needs to change.

"You should measure everybody that watches – how they watch doesn't matter. And that's the future," Pyne said on CNBC's "Power Lunch" last week. "A lot of people are consuming content differently in this generation."

Some big media players are already making the change: Disney announced that starting next week, ESPN will lump fans watching live and fans streaming into one number.

In April, Amazon bought the rights to the NFL's streaming package for $50 million. The company will offer the games for free to its Amazon Prime subscribers around the world starting on Thursday night.

Mike Morris, Guggenheim Media Analyst, says there's more to consider than just how people are tuning in.

How audience fragmentation is driving the NFL's ratings dip: Analyst
How audience fragmentation is driving the NFL's ratings dip: Analyst

"The audience size for those [digital] platforms is magnitudes of what they would typically get, but the length of viewing, the sustainable view, on those platforms is still incredibly low relative to someone watching the broadcast," Morris said Friday on CNBC's "Squawk Alley."

The biggest threat streaming services pose is on advertisers, many experts say. Digital streaming simply doesn't make the same revenue as live broadcasts.

Amazon plans to stream the whole network coverage of NFL games, including ads. The company will also have the rights to sell a handful of ad slots per game in addition to airing their own "pre-pre-game" show for advertising use.

Currently, NFL games generate more than $2 billion in revenue from advertisers, and Morris doesn't think that money is going anywhere anytime soon.

"Broadcast is still the best vehicle to reach a mass audience and there are two things that are important there," he said.

"There are fewer and fewer of what we call 'top-of-funnel' opportunities for advertisers to reach extremely large audiences, so while the pre-pre-game shows might be a great place to advertise a specific product to a specific person, the NFL broadcast will still arguably be the largest domestic way to reach a large audience for an extended amount of time, and those prices will remain high as long as they're the biggest reach audience," Morris added.