Content is king.

There’s a reason ESPN charges all that money to watch.  We want to pay it.

The risk for distributors is losing subscribers who will leave to find live sports provided by a competitor. More than one-third of consumers would cancel their pay TV service if they lost ESPN, the top cable channel for viewer loyalty, according to a 2012 survey by Lazard Capital Markets.

Even in an a la carte era, that’s not going to change.

Pilson said he thinks bundling will probably become the subject of a Congressional inquiry over the next five years. The New York Times recently reported government intervention doesn’t seem likely since the Federal Communications Commission has ensured telecommunication companies can compete in the TV business and empowered programmers in negotiations with cable distributors.

“Over a period of time, I think we can expect all cable bills to go up,” Pilson said. “There seems to be a public acceptance of (higher) bills right now. I think cable is viewed as a necessity in most homes.”

When it comes to sports programming, we live in a whatever the market will bear world.  And the content providers know it.

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BREAKING: ESPN is influential in college football.

After everything we’ve seen in the last decade, it’s the SEC Network that’s suddenly hipped people on to the WWL’s power?

Good Lord.  Go back to sleep, folks.

Mike Slive’s new baby

Okay, the SEC Network is now a reality.  It’s a 20-year deal with ESPN.  (Will we even be watching TV in 2034?)

There’s one little tidbit in all the details I hadn’t anticipated.

As for game times, CBS will retain the first pick for which SEC game it wants each week. After that, Slive said scheduling discussions go to what he called a “content board.” Basically any other game will be on an ESPN platform, including the SEC Network, with other outlets for what Slive called “overflow” games.

But CBS won’t have an exclusive window for its 3:30 p.m. games. The SEC Network or ESPN could have a game going on at that time too.  [Emphasis added.]

That’s… interesting.  Is there a little message sending going on there to a CBS that is perhaps a bit recalcitrant in ponying up a few more bucks for Slive’s new, improved 14-school SEC?  Or is it more outright, say, “pay us for the exclusivity, if you want it”?

Of course, it would be a little weird to have a conference network not showing football mid-afternoon Saturdays.  But I can’t imagine the suits at CBS were happy about it when they heard the news.

“ESPN knows the market…”

Jon Solomon has a detailed breakdown of what’s coming down the turnpike with the launching of the SEC Network here.  Key paragraphs:

Bevilacqua said he believes the SEC missed a big opportunity several years ago by negotiating longterm deals with ESPN and CBS that everybody now knows were fairly under-market deals.

“At the time, they looked like they were fully-valued deals,” he said. “But it’s fair to say the market accelerated forward and has changed quite dramatically. As a result of those deals, the SEC has to deal with ESPN in a non-free agency matter. It’s very difficult because ESPN has the leverage of 15 years worth of future rights to have the preferred structural outcome.”

Which is why history is about to repeat itself with the SEC signing another long-term broadcast deal with the WWL.  The conference may have the product, but the networks have the contracts.

Considering what the last set of deals brought us – a round of expansion that the conference is currently struggling with on the scheduling front – who knows what we’ll wind up with this time around.  Just remember Mike Slive’s hole card.

“The SEC is noted for the loyalty and support from its fans, who are a passionate audience,” Pilson said.

It’s a comfort to know we’ll always be there for him.

Our broadcast partner thinks it would be a good idea if…

We’re being promised quality product on the SEC Network.  The question is, if they’re sincere about that, how do they deliver it?  You can probably guess the answer:

The key for getting good games on the network: Balanced scheduling. One source said the league plans to avoid stacking games – in other words, four marquee football games one week, only one or two the next. Spreading the wealth over a 14-week will be imperative.

Naturally, a nine-game league football schedule could help with this. And maybe the SEC will go that route eventually.

If you don’t think ESPN and CBS are pounding Slive on close to a daily basis about this, you’re dreaming.  I still think this is coming down to a math issue for the conference ADs:  TV revenue versus loss of revenue from a seventh home game.  But if the projection of $28 million per team turns out to be accurate, there’s plenty coming in to make up for the ticket revenue loss.

The 800-pound gorilla puts on more weight.

Now this is power:

Those live games will move to ESPN for the conference channel, which is an important development because it means that ESPN will control the entire inventory of SEC football games, with the exception of CBS’s single game each week. That gives ESPN a lot of flexibility to use specific games in markets where it’s having trouble gaining distribution.

That’s not all it gives Mickey.

I’d welcome our new conference overlords, except it’s not like they just showed up last week.

Drum roll, please.

If you’re wondering who will be wearing the pants in this ESPN/SEC partnership, nothing says “Southeastern Conference” like basing the SEC Network’s studio headquarters in a state that doesn’t actually host an SEC team.

Hold up on that Pulitzer, boys!

Hey, ESPN – great exposé on the synthetic marijuana story at Auburn.  Except for the part you got totally wrong. Crackerjack journalism, there.

Maybe you can get Mike Patrick to bring it up again during a broadcast of a Tigers game this fall.

The Evil Genius vs. Mickey

Boy, talk about not having a dog in this fight.  Although I imagine the suits at ESPN had a nice chuckle over Spurrier’s empty Fox Sports threat.

I’m a little disappointed that Spurrier didn’t take a shot at Junior by name, though.

“It’s such a disruptive model.”

A couple of eagle-eyed readers pointed me to a story in yesterday’s Wall Street Journal about Verizon FIOS’ attempt to come up with a new pricing strategy for content that would involve customers paying for channels based on the number of subscribers who actually watch them, and not a set rate.

The story itself is behind a pay wall, so no direct quotes, but the gist of things is that Verizon is looking at a business model that would involve putting a box on a subscriber’s TV that would measure viewing time.  The customer would only be charged based on usage that crossed a certain time threshold.

This is coming from Verizon, mind you, so I’m not convinced this would benefit the consumer in terms of saving money.  But it clearly indicates that providers are increasingly worried about the impact on-line video outlets are having on the market.  And that’s not all.  According to the article, ESPN draws less viewers than the USA Network, yet distributors paid ESPN an average of $5.04 a month per household last year, compared to the 68 cents a month USA received.  If you’re somebody stuck in the middle like Verizon, you can see where moving to a model based on actual usage has the potential to be an attractive way to avoid price fights with certain content distributors.

The catch is that you can also see how that might not be so great for sports network providers who are pushing product in markets where there isn’t that much interest in the product, say, like the Big Ten Network in the greater New York area.  The problem won’t be unavailability.  Rather, it’ll be that the price will go up if the customer base interested in the product is small.  And that’s got the potential to create a negative feedback loop, as prices go up and fewer people are willing to pay to watch.  (Although maybe Jim Delany can figure a way to threaten a few viewers in Brooklyn to keep them in line.)

Right now, it’s hard to say whether this is a canary in the coal mine story.  But it bears repeating that the content delivery world is under pressure and it’s more likely that things will change than that they won’t.  And that’s something network-owning football conferences should be mindful of.

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UPDATE:  More from the Washington Post on this.

“This is the beginning,” said Gene Kimmelman, a former senior antitrust official at the Justice Department. “If the conflict between cable distributors and content owners persists and prices keep rising, there will be enormous market pressure to begin unbundling offerings, give consumers more choices and, from my perspective, ultimately let consumers control what they buy and how much they pay.”