MLB Advanced Media & The Future of Broadcast Rights

[MikeThierry]

Originally Posted by dougdirt

Sports is literally the only reason I have cable right now. Between Netflix, Hulu Plus, Computers that can be hooked up to an antenna and record local TV, Amazon Prime, Youtube, Vimeo and a few other places, I could easily get by Cable if I weren't locked into sports. If I didn't live in the Cincinnati area, I probably wouldn't have cable because I would just buy MLB.tv and package it with some of the above options for my programming needs. For the non-sports fan, they can truly get away from cable pretty easily and still get HD programming directly onto their TV.

Agree with doug here. In fact, I've streamlined my cable deals because I really don't watch anything else on TV besides sports and AMC (Walking Dead and Breaking Bad are a win). Since TLC no longer allows you to lean anything anymore and the History Channel is nothing more than Aliens and pawn stars, my TV habbits have changed drastically over the years.

[Unassisted]

Originally Posted by Brutus

You're missing something too, though. There is a consensus in the industry that eventually we'll wind up with a la carte programming.

I've never heard that any forces within the industry, other than OTT providers like Netflix, are pushing for that. Netflix's competitors like HBO are pushing back just as hard to keep the status quo.

Considering the huge impact on revenue that eliminating blackouts and RSN basic-carriage provisions would have, I could easily picture Bud Selig testifying before Congress against a la carte delivery. Bud's signature accomplishment is the billions of dollars in revenue that now flows into MLB, mostly from media contracts. He publicly pleads ignorance about the blackout rules, But I'm certain he knows full well that RSN revenue can't be replaced in-market with OTT delivery.

[Brutus]

Originally Posted by Unassisted

I've never heard that any forces within the industry, other than OTT providers like Netflix, are pushing for that. Netflix's competitors like HBO are pushing back just as hard to keep the status quo.

Considering the huge impact on revenue that eliminating blackouts and RSN basic-carriage provisions would have, I could easily picture Bud Selig testifying before Congress against a la carte delivery. Bud's signature accomplishment is the billions of dollars in revenue that now flows into MLB, mostly from media contracts. He publicly pleads ignorance about the blackout rules, But I'm certain he knows full well that RSN revenue can't be replaced in-market with OTT delivery.

A lot of operators would love to go to a la carte programming. They're tired of Disney, Viacom and other companies shoving low-rated channels down their throats in bundles, forcing them to pay 20-50 cents per subscriber per month when very few people want to watch these secondary networks.

When Time Warner deals with Disney, it's not just paying market value for Disney, ESPN and ESPN2. It's being forced to take on ESPN Classic, ESPNU, ESPN News, Disney XD, etc. These networks bundle all of their channels and force up the rates paid through subscriber fees or else they threaten to yank all their channels off the air.

So what's happening is the rates are in turn jacked up on the consumers. Eventually, consumers will stop paying the money and everyone in the industry, to a man, knows that and admits it. When that happens, everyone expects some form of a la carte. But for now, they're trying to milk the system as long as they can before it crumbles.

[Wonderful Monds]

Am I the only person that exists on the planet that doesn't really care about a la carte programming?

[Chip R]

The thing I worry about, in regards to the Reds situation, is that while the games are highly rated, there is basically no other outlet to carry those games on. It's Fox Sports Ohio or nothing. I can't see the over-the-air channels carrying Reds games and pre-empting network programming. I may not understand this as well as I think since sports economics are very different than regular economics but if there's only one outlet for a product, the outlet can pretty much pay whatever they want for that product no matter what the ratings are. If there were more than one outlet, the Reds could play them off against each other.

Now I have seen ROOT SPORTS come into play over the past year. Right now they are in Pittsburgh, the Northwest and the Rocky Mountains. They carry Pirates, Mariners and Rockies games. Perhaps they could be used to drive up the price of the games. I suspect, by the time the Reds deal expires, they will have grown or gone out of business. Their website says they are owned by DirecTV and used to be FSN. So I don't know if they would be a competitor of Fox Sports Ohio or FSO would become ROOT. My guess it would be the latter which would put the Reds back in the same boat they were to begin with.

[Brutus]

Originally Posted by Wonderful Monds

Am I the only person that exists on the planet that doesn't really care about a la carte programming?

You wouldn't prefer to only pay for the channels you watch?

[Wonderful Monds]

Originally Posted by Brutus

You wouldn't prefer to only pay for the channels you watch?

They'll find a way to gouge prices either way.

[dougdirt]

Originally Posted by Wonderful Monds

They'll find a way to gouge prices either way.

Not really. If people aren't willing to pay $X for Y channel, then Y channel is going to have to start offering its services for $X-10% (or more).

[Caveat Emperor]

Originally Posted by dougdirt

Not really. If people aren't willing to pay $X for Y channel, then Y channel is going to have to start offering its services for $X-10% (or more).

Or, more likely, they'll bundle in Channel Y "for free" with Channel X (a channel like ESPN / TBS / TNT etc.) that everyone wants and pays a lot for.

Then you end up exactly where you started.