So you’d pay two or three bucks a month for the SEC Network. But would you pay $10?
Category Archives: ESPN Is The Devil
“The SEC has that inherent advantage that if Alabama or Auburn is playing the Little Sisters of the Poor, people are still going to watch in huge numbers.”
And how crazy is that? Well, put it this way…
The majority of the SEC Network’s carriage deals aren’t expected to come up for renewal soon, but ESPN declined to provide terms of the contract except to say they were long-term. If the network can continue to prove its worth, Nelson doesn’t think it’s outlandish for the SEC’s in-market subscriber fee to jump from $1.30/$1.40 to $2.00 or $3.00. A jump of that magnitude could give the network more than a billion dollars annually on simply subscriber fees.
“I would have said it was crazy two years ago,” Nelson said. “But when they were so successful at $1.30, I’m sure they are thinking big.”
If 30 some-odd million subscribers are willing to pony up three bucks a month for the privilege of having Finebaum and Phyllis from Mulga drop into their dens five days a week, that’s crazy enough for me.
Including his former offensive coordinator…
Q: Your offensive coordinator at FSU, Mark Richt, has enjoyed success at Georgia but hasn’t won the SEC since 2005. Could you be critical of him?
A: “That one is probably the most challenging. A lot of people say I’m a homer for Florida State, but Mark Richt is a guy that I root for. I consider him a friend, and I have a lot of respect for him as a coach. I have a good enough relationship with him where if I say he has to do better at Georgia or else his job is on the line, I think he would understand that is my job to do.
“I think he’s one of the most underrated coaches in the SEC, if not the whole country, but he’s always having to deal with so many expectations. He has consistently won there, and I would challenge anyone at Georgia to go out and find someone better than Mark Richt. Does it really get old having 10-win seasons?”
There’s that old “find someone better” theme again. Sure seem to hear that a lot. Funny how it’s only the repetition of Richt as underachiever that’s credible with certain folks, though.
“If they’re going to let us play after midnight, they should let us practice and train after midnight.”
Dan Mullen is standing at the crossroads of broadcast demands and NCAA rules and isn’t happy with the view.
The Bulldogs open at Southern Miss with a 9 p.m. local time kickoff on Sept. 5. The next week, they host LSU with an 8:15 p.m. kick.
“The schedule changes how we prepare because we play at, like, midnight every kickoff. It is hard,” Mullen said. “Our first two games, you expect they’ll still be going on past midnight, which is kind of ridiculous. But that’s just the way it is.
“That will change how we prepare closer to game week, because I’m usually asleep by then. I’ve got to be rocking and rolling in the fourth quarter. Our guys aren’t used to physically performing.”
You’d best plenty of rest, big fella.
Disney’s stock price took a major hit last week over potentially gloomy news about the long-term health of ESPN’s business model, which is incredibly profitable for its parent company. That, in turn, has led to some fascinating speculation about where the delivery of live sports broadcasting may be headed in the next ten years.
In one corner, you have this fairly pessimistic assessment – from the WWL’s point of view, that is – that sees the key to the future in the NFL contract that comes up for negotiation in 2020.
No Telethon Yet!
I don’t think we need to have a telethon to benefit the poor media giants just yet, but if you want to understand the time horizon to Mediamageddon, you need only look to the NFL.
Sometime circa December 2020, a deal is going to be reached between the television networks and the NFL. The last deal was inked in December 2011, and it extended the NFL’s various television rights packages by nine years from 2013 through 2022 for about $27 billion. What will that deal cost TV in 2020? Forty billion dollars? With TV ratings trending ever downward, will any television network or combination of television networks be able to pay that kind of licensing fee?
Apple/NFL The End of Days
Apple will have its Apple TV product firmly established by 2020. It has the cash. Will we be watching the NFL streamed live on Apple TV in 2022? Apple could probably purchase the entire NFL, but that’s for another column.
In 2022 will the NFL go direct to consumer – over the top – at let’s say $2.99 per game? The upside for the NFL would be huge. Although the audience would be smaller, it would be more affluent, and the direct-to-device data collection would empower unprecedented changes in the way marketers communicate their messages to consumers. No Nielsen ratings, just deterministic data enabling real-time metrics about campaign efficacy – advertiser heaven!
As Goes the NFL
The television business may be good or it may be bad. There may be headwinds or course corrections. Ups, downs, new technologies, the discovery of life on other planets, retinal implants to replace TV monitors – none of it matters. The TV business will be the TV business until the new NFL deal is done. If the TV industry comes up with enough cash to satisfy the NFL, it will be business as usual (declining ratings, higher spot prices, better targeting, etc., etc.) for the duration of the new contract.
If the NFL and the TV industry do not come to terms, it will be Mediamageddon and life as we know it will end. There will be no more media giants, no more meaningful networks that can deliver a live audience at scale and no more “tent pole” events with big-enough television audiences to command the budgets they currently command.
OTT distribution of the NFL, whether via Apple or Netflix or Comcast Xfinity or Verizon/AOL or direct-to-consumer from the NFL itself (probably courtesy of BAMTech), will be the destroyer of rate bases, the killer of reach curves and the advent of super-tight consumer targeting and transactional advertising on connected devices. The change will be so dramatic, the NFL might not have the motivation (or the courage) to do it as soon as 2020.
Well, gosh, I guess it’ll be up to the bold thinkers running the show for college football to lead the way, then.
Hey, a little humor is good for the soul.
There is another way to look at this, though. If the NFL decides to go its own way, that’s going to make whatever other live sports broadcasting is still available for ESPN to buy even that much more valuable to it. And if there’s one thing ESPN understands, it’s that the more it has, the merrier.
In July, The Wall Street Journal cited analysts that said ESPN would need to charge $30 for an over-the-top offering to bring in the same amount of money it currently does inside a cable bundle.
Given that about 100 million cable subscribers pay about $6 a month for ESPN, this assumes that 20 million people, or about 20% of current cable subscribers, sign up for a separate ESPN offering.
Which, if ESPN has effectively all sports you need to watch, seems like a fairly realistic target to Thompson. In this scenario, you’re betting that one in five current cable subscribers really likes sports and will pay a premium for ESPN.
Or to put it more simply, one simple reason why ESPN will probably be fine: They own basically everything.
Make sure you read the linked article at stratechery.com, as it goes into some depth about how Netflix offers a business model that ESPN could eventually embrace for survival.
To a greater extent than even before, ESPN is sports. It’s the only channel you need. In fact, its biggest problem is that there simply isn’t enough time in the day to view all of the inventory the network has rights to. That, though, is a solved problem: Netflix showed 7 years ago that streaming makes time constraints immaterial. Iger noted:
Those new deals all provide for more programming, more opportunity for content on digital platforms, which will enable us to increase consumption on digital platforms and grow that business even more and generally more flexibility in terms of how we distribute this product. So the NBA’s a great example. You can have a huge increase in essentially inventory on ESPN across its platforms. So while there is definitely increasing costs, there is a huge increase in terms of opportunity as well to reach more people, to serve advertisers more effectively and to grow our digital platforms.
The selfish question we consumers of college football should be asking ourselves is has anyone responsible for production of the product begun thinking about the consequences of how this may shake out over the next decade? I mean, it’s not like college football won’t have a few broadcast deals of its own to negotiate between now and 2025.
In the end, one thing’s for sure. If the 800-pound gorilla gets the hiccups, everyone else in the room is gonna shake.