Here’s an interesting little tale about something happening over on the other side of the pond.
We all know how premium TV works in the UK. If you take either Sky or Virgin Media services, you have to pay extra for premium sports. If you don’t, the best you might get is Eurosport, Motors TV and the odd racing channel. Now I quite Eurosport, if only for its excellent cycling coverage.
But the fact is that if you want any major sport that’s not being covered by either the BBC or ITV, you’re going to need to pay up for Sky, and now, Setanta.
In the US it doesn’t quite work like that. The nearest US equivalent of Sky Sports is ESPN, owned by Disney like the network ABC. It has a sister station in ESPN2 and there are further ESPNs around the world. It shows Monday Night Football – the NFL variety – as well as a variety of other sports including baseball and college football. It’s probably true to say that it doesn’t get quite the exclusive deals that someone like Sky might get – rights tend to be more divided between different markets and networks in the US. So there may be a local television station that shows baseball as well as ESPN. But it’s undoubtedly the premier sports TV brand in the country.
Beyond that there are other stations like TNT that show a lot of basketball while the Fox network shows a good quantity of baseball. But a sports fan is likely to have ESPN. But here’s thing – if you get cable, you almost certainly get ESPN as part of your basic cable package. A broad analogy might be getting Sky or Virgin Media in the UK and you’d expect to find UK Gold.
ESPN (like UK Gold) gets a small amount of every subscriber’s basic subscription. This is something that channel owners negotiate with cable operators. ESPN has the whip hand in the sense that subscribers expect to get the channel, so a cable operator will need to come to an agreement with ESPN. There are a few channels that are in this powerful position – perhaps including Discovery. Beyond that, like the UK, you either have to rely purely on advertising revenue, or you can try to sell yourself as a premium brand like HBO or Showtime.
Anyway, so much for the history lesson. The NFL in the US recently created its own channel – the NFL Network. NFL games are already sold to ESPN as mentioned. They also sell games to CBS and Fox who between them broadcast Sunday afternoon games – usually a total of three in any market, although what games you actually see might vary according to local interests and whether or not a ground has sold out. Finally, there’s NBC which shows a game on Sunday night. Between these four channels, the NFL earns a lot of cash. But it still wanted a bit more.
The NFL Network broadcasts repeats and profile shows for the most part. But for four Thursdays a year, it broadcasts a live and exclusive game on its nascent channel.
Cable channel operators looked at the network and decided that they didn’t want to bundle it with their basic channels. If they do they, they’d have to pay – say $1 – for each of their subscribers, which effectively means increasing their subscription packages. So they instead put it into premium bundles – either on its own or with other premium sports networks such as the Fox Soccer Channel and the Outdoor channel. Subscribers can choose if they want it.
That seems fair, but the NFL Network is not happy. They don’t get nearly as much cash if they’re not included in the basic package, since many subscribers will choose not to pay that premium. This has now reached the point that the network has been sent a ‘cease and desist’ letter by US cable operator Comcast demanding that it stops inciting Comcast subscribers to switch providers.
The network is also trying to get legislators involved, getting them to try to force cable operators to take their network in their basic packages.
From this outsider’s point of view, this whole thing is ridiculous. The NFL Network should surely stand or fall on the basis of whether viewers want to pay for the service or not. The reason Sky or Setanta can command premium prices in the UK is because you can’t see live Premier League football anyway else. But that’s because the free alternative is simply highlights. The average US viewer can watch three games back to back on a Sunday across the various networks on free-to-air television. They then can see a further game on Mondays if they have a basic cable package. The NFL Network is offering a paltry eight further games, and frankly the four most viewers can already see is probably enough. Only the real die-hards are likely to subscribe further.
Like anything else, it’s surely a question of pricing a product right on the basis of the market it’s operating in.