Just another way for the big boys to make money

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The NFL is poised to start getting nearly $5 billion per year from TV deals with ESPN, NBC, CBS, and Fox. Time Warner Cable is considering simply buying the Dodgers for $1+ billion instead of paying $4 billion over 20 years for the team’s TV rights. The newly vertically integrated NBC/Comcast will stream the Super Bowl on the web for free next month. And today, as part of a decade-long Disney/ABC/ESPN rights renewal deal, Comcast is going to have the various Disney-owned networks “to be streamed live on the Web behind a wall, accessible only to cable subscribers.”

It’s a new strategy that’s at once beneficial and detrimental to consumers. Terms of the Comcast-Disney deal weren’t disclosed, but you can bet that if you’re a Comcast subscriber, your Digital Basic subscription fee is sure to rise. Of course, this is the first large deal in which all live network programming was available on TV and the web simultaneously. Until now, a handful of networks have been experimenting with the dual-delivery model, including the ESPN3 “network” and CNN’s simulcast. As far as programming goes, Comcast is usually out ahead of other cable providers, so expect Time Warner and Cablevision to follow suit, then smaller companies like Charter and Cox. DirecTV has been beefing up its digital bonafides by adding 12 streaming channels to its iPad app.

There was speculation towards the end of 2011 that going into the CBA negotiations, Bud Selig was going to deal with archaic problem of TV market exclusivity. That did not come to pass, and with Selig motioning as if he will exit stage left sooner rather than later, it’ll take a more forward-thinking commish to make that change a reality. Blackout rules are here to stay for now.

Any thought that the internet would quickly democratize delivery of sports for the fan has been extinguished. The way the carriers are paying hundreds of millions or billions for sports properties – and exclusivity in many cases – it’s terrible for the consumer. The providers are overpaying to keep their subscribers from leaving, and in many cases it’s working. Okay, I’m glad that Comcast is going to provide all of this streaming stuff. But I’m also an NFL Sunday Ticket subscriber, which means that I’m wedded to DirecTV. I also like DirecTV’s digital forays. I’m not going to subscribe to two television providers. I would love to have all of this stuff available to me through one provider, and that’s not happening. It might be that I’ll be able to get the streaming ABC/ESPN because I have Comcast Internet, but I don’t expect that to last.

Who is this good for? The rich guy. Someone wealthy enough to want to consume all of this content in every way imaginable may not bat an eyelash at paying $300 or more per month just for TV. I’d like to think that this is just a bubble that will burst sometime soon. I can’t. The cable providers may have been behind the times, but they’ve delayed just long enough to figure out new business models. Want a streaming-only option? Sure, but you’ll pay a lot for it to make up for their “lost ad revenue.”

The winner, no matter how much the cable providers and networks want to sell it, is not the guy behind the remote control. It’s the guy high up in a board room somewhere, figuring out the quarterly dividend checks.

2 thoughts on “Just another way for the big boys to make money

    • @Transic – It could result in a la carte if it continues to snowball. Dish’s reaction is to be expected. That’s such a major sea change that it’s hard to see how it’ll happen. If there’s a company that would do it first, I’d count on it being Dish. Everyone else? Too much integration to take a chance.

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