I've had an ongoing discussion with one of my best friends for the last few months, whether it is through email or in-person conversation. I'll summarize this, but it basically started back when Maryland and Rutgers decided to bolt for the B1G. He went to Pitt and follows them religiously (although he does root for OSU since 3 of his closest friends went there) and he didn't understand why we would add teams that are typically poor performers (either football or basketball). When I explained to him that it is all about viewership and extending the markets for B1G teams, he argued back that Maryland and Rutgers are easily 2 of the worst viewerships on the East coast of any BCS school and even mentioned how ESPN rarely wants to air them. I assumed he would know that I meant the BTN, so I explained that to him. He seemingly understood and agreed to an extent, although he still feels that adding those 2 will still hurt the B1G perception in the long run and not do any good. But then today he sends me this link...
It's an interesting read on what many believe, and myself included, is an eventual shift in subscriptions for networks, whether they are the large ones of ABC, NBC, or CBS or cable like TBS, ESPN, CNN, etc. If this eventually moves to a "pay for the channels you want" concept, how does this affect the B1G and the BTN down the road? My argument, while it was lengthy, I'll keep it short here, is that you can't base how your business is currently running based on the perceived notion that the direction of television may change at some point. There's no way to tell what will change and how it will change. The BTN's business model should remain the same for now, but also having an eye on what may happen. I also reiterated a previous notion that I also still feel that the B1G is going after 2 more schools to get it to 16 and that Maryland and Rutgers are just stepping stones for the time being.
Back to the article, though, one thing it touches on briefly is the unbundlings of channels and how this may be their biggest hurdle in getting it to work. Honestly, I just don't see how this will be done. Bundling seems like it's something that will always happen, even if it is, in the very least, an additional option where the bundled channels would be cheaper together than they would be if purchased individually. That may benefit the BTN due to its affiliation with Fox Sports and is probably the best scenario for them. If it isn't bundled, the additions of Rutgers and Maryland may be for naught within the next 7-10 years and the BTN may go the way of the dodo. This would obviously be a huge problem for all of the teams, even though less for OSU and UM as they bring in enough revenue to actually make money each year.
This is definitely something that needs to be looked at. What does everyone else think?
Hey, it's all about competition within a free market. If the market likes the B1G/BTN product [think programming (like "The Journey"), not just broadcasts of games) it will sell. The B1G's recent "acquisitions" within the NYC/NJ/SNE/DC/MD region suggest the B1G is positioning itself, quite well.
More damage would have been done to the B1G's plans were ND able to win the MNC, the other night That would have bought the Irish more power than we would have liked with a new television deal for college football, looming. A BCS title would have strengthened and extended ND's independence and power within the new playoff structure, too. ND losing to Bama = Great news, for college football.
As for the ala carte approach, it will be nice in the beginning - before the prices for the most popular channels, start climbing.
Interesting point on ND losing that game. I never really thought of it like that. Definitely hard to argue, especially if there is a new contract looming.
It's hard to say what will happen with cable and satellite. Is television going the route of Hulu Plus and Netflix where you pay a small subscription cost to stream TV shows and movies? I think that's sort of the premise behind the article. But what that does is cut out all of the live sporting events played nearly every single day of the year. So the big question, if this is indeed the road taken, what happens to televised sporting events? A la carte sounds like the most logical way to go, but is there another way?
As for the notion that our markets are fine, one of the biggest parts of the revenue stream for the BTN is that they are receiving revenue from people who don't watch anything on BTN. That's the beauty of cable and satellite providers these days. For a very small cost, this is added onto the bill and is nearly unnoticeable. But what happens if that is no longer the case? What happens to the BTN if the tens of millions of subscribers that it already has gets reduced down to 10-20% (this isn't factual data, just throwing a number out to make a point) of that? That's a huge cut and a substantial loss of revenue. How does the BTN and B1G proceed from there?
I'm sure there are people that are currently monitoring the possible changes going on here. We're definitely far away from this as the stuff from Intel, as noted in the article, won't even be tested until March. But it's a clear possibility for sure.
I guess another question it asks is does this push expansion again? But this time, is it for the sake of competition and not necessarily for viewership?
The only thing certain is change. There will be big changes coming down the road as technology advances. The B1G is now cashing in on old technology (cable and satellite TV). Internet TV is just in it's beginning stages, but most everyone I know is intrigued by the idea of what that they will be able to accomplish. Heck, I already have a Roku device. And, BTN2Go is on all my mobile devices.
I have knowledge of what the B1G has in mind for their future, but if their past foresight is any indication (basically telling ESPN to f off and forming their own network), then they are most likely looking at how they can take future technology and succeed. It does not take a genius to recognize that the internet will be the future.
Much of the news of internet TV focuses on the "ala carte" appeal of what might happen. However, 'bundling' will still be around is some shape or form. I know that I am really looking forward to picking and choosing just what I want to pay for, but I also know that I have quite diversified tastes, and simply selecting each channel individually from an ala carte menu may end up being cost prohibitive for all I want to see. I would envision that there will be some sort of 'packaging' offered so you can select something like a sports package that would feature the major players - Espin, Fox, NBC, CBS, and quite possibly some major conference networks. To some extent this is already occurring with my Roku device - I can pay $10 per month for Hulu and I get to watch ABC, NBC, Fox, and several lesser networks offerings from their 'cloud' DVR.
Every conference network will need to posture themselves so that they are included in the sports packages that will be offered over the internet. The posturing will be very similar to what is already occurring for cable and satellite.
I think the bundling, which you mentioned, is the key - especially trying to get into the New York/DC markets. News Corp (which owns Fox) owns the YES channel, which carries the Yankees. I've seen talk of bundling the BTN with YES, which seems like it would solve the "no one in New York cares about college football" argument.
I just don't see complete a la carte happening...a lot of the cable/network channels share top ownership.
"I can accept failure, but I can't accept not trying." -Woody Hayes
Exactly...for instance, how many channels are under Turner? TBS, TNT, TCM, Cartoon Network, CNN, etc. I think you'd be hardpressed to find CNN allowing an a la carte of those channels. They want them all together. It's not just the sports programming that this pertains to but it is the foundation of the argument in a way.