Posted on 12/19/2007 5:22:15 PM PST by Snickering Hound
The cable companies didn’t want to do Sunday Ticket as a package deal the way DirecTV is selling it. They wanted to do it on an individual game PPV basis, the league insisted on the all or nothing pachage (with good reason, there’s more to Sunday Ticket than just the individual game broadcasts. Easterbrook outlined all this last month ( http://sports.espn.go.com/espn/page2/story?page=easterbrook/071030 ).
Of course there’s a lot more to the NFLN than the live games. There’s excellent programming throughout the season (now that the pre-Sunday night game NFL PrimeTime on ESPN is dead NFL Gameday on NFL is hands down the best week in review show), plus for the football obsessed lots of programming in the off season. The games are part of the leverage against TW and Comcast, but there’s plenty more on the channel.
As for the fairness of them being willing to be on the digital tier for Cox and smaller carriers but wanting in the basic tier for TW and Comcast I think I’ll quote Goodfellas “f$%^ fair”. The contracts are negotiated individually, the NFL legitimately has different goals with different carrier, much like how the carriers legitimately have different goals with different networks.
Eventually somebody is gonna cave. Until then I’m just glad I live in a Cox town and get to watch the Steelers tonight.
Why should they? They want their network in the basic tier with those carriers, it’s their network they can have that position. If they’re willing to leave the money on the table that this battle is costing that’s their prerogative.
yes, and more hearings-24\7\365 on steroids in baseball. (the more time they spend on such crap, the less time they have to take away my freedom and my money).
The main thrust of the story, though, is how NFL is crying foul on access to NFLN but has no trouble limiting access to Sunday Ticket, which is easier to get in Canada, Mexico and by internet so long as you aren't in the U.S., then it is to American customers (I think this explains why I've seen links mentioned to NFL games on the net - they are links to torrents from international feeds!).
Easterbrook also says this:
Some cable executives contend there is little point in chasing Sunday Ticket because all the people who want the service already have migrated to DirecTV. Sure -- all the people who want it at $250 a year, plus bundled charges, plus the hassle of installing and maintaining a satellite dish. If Sunday Ticket were $50 a year and came hassle-free through cable or any other hassle-free electronic pipeline that might evolve, instead of 1.6 million households getting Sunday Ticket, 25 million might sign up. Then consumer costs would be lower but business revenues higher -- $1.3 billion instead of $400 million in that example -- and what was once a luxury for the privileged few could be possessed affordably by almost anyone. Just like what happened with cell phones! Come on NFL, let us choose which game to watch. We'll pay, you'll be richer and you can stop speaking out of both sides of your mouth, demanding public access to the NFL Network while restricting public access to Sunday Ticket.
The problem, of course, is that the NFL would want to charge everyone $250/yr for Sunday Ticket, not $50/yr. And the cable companies aren't going to fork over $400 million on Sunday Ticket if they can't make money off it. Even DirecTV isn't making money off it. For that matter, Fox, CBS and NBC are losing money on the NFL too but they do it because they can cross-promote their network shows and hope to recoup the money there. That's why the nets inundate us with ads for their other shows everytime you turn on an NFL game.
I generally ignore Easterbrook’s conclusions, he has serious white guilt/ corporations are evil problems. But the facts are pretty basic. I would think the reason the cable companies would want to treat this package differently is because the NFL works so much differently. The other leagues (including college football) have games nearly every day of the week and TV broadcasts that are largely ruled by local contracts, this means there’s lots of extra games to get with the package. The NFL runs most of the season with 4 time slots, and 2 of those (and any “extra” slots like the game starting now) are single games running nationally with no competition within the league. NFL Sunday Ticket is really only useful for those two Sunday afternoon time slots, a person with “full” (so they get Fox, NBC, CBS, ESPN and NFLN) cable can see just as many games every week as a person with Sunday Ticket, the difference is the Sunday Ticket person can chose their Sunday afternoon games.
Now what all this means from a market perspective is there is a strong reason not to get Sunday Ticket as a full package. I can say that if I could get ST I wouldn’t, picking my games in 2 slots a week isn’t worth $250 for me. Sure once in a while I get annoyed by the networks selections, especially because I’m in the Cards blackout zone and I hate them, but I don’t get $250 a year annoyed. On the other hand I might get $25 a game annoyed 3 or 4 times a year, like last week when Tucson had a choice between Colts-Raiders (dome team I don’t respect, crappy team nobody respects) and Eagles-Cowboys (crappy team that doesn’t interest me, evil team I wish would cease to exist), I might have spent $25 to watch Pats-Jets, of course instead I got to watch the Cowboys lose so it wasn’t all bad. So I can see I definite individual game PPV market for Sunday Ticket.
I see your point but it seems to argue cable’s sides. Sunday Ticket is a niche market and, to most people, NFL Network is probably a niche market too. So why force it, and the subsequent rate hike, on all cable customers instead of just the sports watchers?
What makes GamePlan and Sunday Ticket attractive to me is that you don’t know which games are going to be exciting and which games ordinary until they play them so your chances of finding a great game increases when you have more choices. Plus, if you are a specific fan of an out-of-market team, you better the chance to be able to watch your team play.
I don’t know if I’d shell out $250/yr for Sunday Ticket but if they made it around $100/yr, that would be attractive. Or I’d pay $50/yr to be able to watch games on an internet feed, knowing the picture quality would not be as good but I could still follow what was happening.
I’m not really arguing any side. I’m just throwing around facts and conclusions. I can see the NFL’s side on Sunday Ticket, they want it to be like the other packages, all or nothing, they figure anybody that’s interested in a couple of games on ST will get the whole thing and they don’t want to give them the “cheap” option which leaves money on the table. I can also see the cable companies side, there is clear evidence that because of the way the NFL schedule works ST doesn’t have the same kind of appeal as other packages and needs to be sold differently. Of course then there’s the networks side that don’t want ST sniping viewers from their local commercials, which the PPV method surely would do in much larger quantities than the full package method. Who’s right? All of them.
Same goes for the NFLN argument. Yes you can easily argue that it’s a niche market product, although the NFL is the most popular of the major sports so it’s a big niche. Of course you can make the same argument about all the other sports networks, which include half a dozen different versions of ESPN at least two of which come with almost every “basic” package offered by cable or satellite. On the other side you can easily argue that the one of the points of NFLN is to attract new fans without the baggage (ie negative stories and editorials) they get from the other sports TV sources. And in order to do that they need to be in as widely a distributed area of the dial as possible, especially in areas where there are NFL teams, which happens to be in areas frequently controlled by TW and Comcast.
That’s what makes fights like this ugly. Really, when you get right down to it everybody is right, what everybody wants is what’s good for them, it maximizes their revenue, it maximizes the value they give to customers, and it actually is good for the other side, it’s just not as good as what the other side wants. Mid to late 2009 NFL season is when I predict the great blink will happen. Not sure who blinks first, but that’s when.
I agree with you that there is no good guy or bad guy here - just companies trying to protect their business interests.
But, really, the cable companies have survived this far without Sunday Ticket or NFLN. To make them come to the table, the NFL needs to make it palatable to them. Why would any business agree to something that won’t make money for them? On the other hand, the NFL *can* make more money for themselves by lowering their price/expectations to something cable companies can agree to.
Well the question comes in for the cable networks of are they losing customers because of the lack of NFLN. There’s a reason most of the games on NFLN feature at least 1 and often 2 teams from major parts of the TW and Comcast markets. They are trying to create customer backlash. Didn’t work too well last year because almost all the teams stank and their fans didn’t mind not being able to watch them. This year they got a little luckier, lots of good games including the possible 16th part of the Pats perfect regular season.
I think it’s especially true for TW, that’s a company that’s spread a little too far around the media world and always seems to have some part of their business taking on water. If they start losing lots of New York subscribers because of this dispute they could blink. Especially with the problems the TV and movie sides of the business will be having as the WGA strike drags on and possible adds a SAG strike and a directors strike. If a cable company blinks first it will probably be them, if they don’t blink by Nov 2009 (ie they manage to deal with the chaos of all the strikes and get the Hollywood part of the business rolling again without caving to the NFL) then the NFL will give up. But the NFL won’t give up for the money, they don’t need it, they’ll give up because they’re bored of the fight.
For free? I don't know anyone who gets cable, even basic service, for free.
On the NFL's terms, the network benefits only the NFL.. not the cable companies. The only possible benefit cable could get is if it helped them sell their service, but there is only a seasonal demand for football.. and for some people, myself not included (I love football), there is no demand at all - any time of the year. ;)
Are you sure about that? If so, why do Dish and Direct TV include the NFL network in the basic package -- or "give it away for free" as you say.
Good catch, not free. But I think you knew what I meant. Let me say it more accurately - the NFL wants the cable companies to pay the NFL (reportedly, a relatively steep price) for a new network with the condition that it be added to the basic cable package. I suppose what happens after that is really of no concern to the NFL. Do the cable companies raise the price of basic cable to offset the new cost?
"Big Cable" (as their rivals like to call them) is hypersensitive to any cost increases like this right now, as they are in a highly competitive battle with each other and with DirectTV, satellite providers, etc.
"Are you sure about that? If so, why do Dish and Direct TV include the NFL network in the basic package -- or "give it away for free" as you say."
It's part of their agreement with the NFL. They have to, in order to have rights to the Network. Now, it's still a good question about how beneficial this has been to them, and I'm going to look up a few articles when I have some time to see if there is anything concrete about whether this has helped them gain subscribers. What I remember off the top of my head is reading a couple of years ago that the NFL Ticket was not at all the big boon that Dish Network expected it to be.
Dish has had other problems as well - some households simply cannot use it because of obstructions, etc, but while I'm sure the NFL Ticket lured some football fans to their service, it wasn't a huge draw that Dish could hang their hat on. I'm less familiar with DirectTV.. but either way I might see what I can find out about both.
I confused DirectTV with Dish Network. DirectTV has the exclusive rights to the Sunday Ticket, and have been the exclusive provider for it mostly since it launched in the early 90s.
Dish Network on the other hand, carries NFL Network. It apparently has never offered Sunday Ticket.
According to wikipedia, The Sunday Ticket is a big deal for DirectTV (contrary to what I was remembering) - they say it is the biggest subscriber draw for them, again noting that some people simply cannot have DirectTV service.. so it is kind of a flawed situation, but that's neither here nor there.
But since we are not talking about the Sunday Ticket, we are talking about the NFL Network, I can't see it as nearly so appealing. Sunday Ticket offers all of the games every week.. the NFL Network is just certain "special games" in between a whole lot of "NFL related programming" which *might* be interesting; or, might bore even an average football fan to tears. I couldn't say for sure.
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