[opendtv] Re: TV Technology: OTT, Cordcutting Disrupting Televised Sports
- From: "Craig Birkmaier" <dmarc-noreply@xxxxxxxxxxxxx> (Redacted sender "brewmastercraig" for DMARC)
- To: opendtv@xxxxxxxxxxxxx
- Date: Sun, 28 Apr 2019 09:36:17 -0400
Classic!
Once again Bert has no clue about the market for sports entertainment, and why
it continues to deman - AND GET - ever escalating “rights fees.”
On Apr 26, 2019, at 9:57 PM, Manfredi (US), Albert E
<albert.e.manfredi@xxxxxxxxxx> wrote:
This is one of those "entirely predictable" evolutions. First off, because
"live" does not necessarily mandate "broadcast delivery," and secondly,
because even sports ultimately must follow the supply/demand model. Even if
demand is less elastic (we are told) than is demand for other content.
Earth to Bert. The majority of sports migrated to MVPDs years ago - this was
the primary driver behind more than 90% of the homes subscribing to a MVPD
service as recently as 2008-2009.
The only major exception has been the NFL, due to the sweet deal the
politicians gave the league to operate and control their monopoly. As they
article clearly indicates, the next round of rights negotiations for the NFL is
likely to cause another INCREASE in rights fees, driven by the very competition
that Bert tells us wil cause rights fees to decline. If the NFL decides to
separate linear and digital rights, as the article predicts, the NFL will rake
in even more money for a declining audience.
Bert continues:
The obvious market response would be, let sports also exploit the much
greater flexibility of online delivery. That's what the consumer wants, and
the consumer has been making this abundantly clear. No one has to fret about
what's best for the sports leagues, other than the sports leagues.
Sorry Bert, but sports has been exploiting online delivery for nearly a decade.
It was a primary driver behind TV Everywhere, and now is playing a much larger
role with the VMVPDs, with both Hulu and DirecTV Now aggressively promoting
their streaming sports programming. Perhaps Bert has already forgotten that
Dish Sling was the first to offer a VMVPD bundle that included ESPN.
The time when sports were subsidized with "welfare payments" from the
majority of MVPD subscribers, even those who couldn't care less about sports,
is gradually coming to an end.
Nope. More than 70% of U.S. homes are still making their welfare payments to
ESPN via traditional VPD services, ad many of the rest are doing so via the
VMVPD services that most cored cutters are SWITCHING to.
There has been some backlash against MVPDs that REQUIRE subscribers to pay for
a local RSN, like in Los Angeles. But the reality is that sports is still a
primary driver of subscription TV packages.
Another reality is that traditional entertainment programming is ALSO getting
more expensive. This is what happens when new money flows into an industry with
limited talent and production resources.
The sports leagues now have to operate in a much more competitive
marketplace. If pro athlete salaries are absurd, this is one mechanism that
will bring the salaries more in line with actual demand. As it should be.
"The bundle" has been unravelling for some years now, and that's simply
because it could not exist in a competitive marketplace. It was an artifact
of local MVPD monopolies.
But this is not happening. The delivery technology is irrelevant. It is the
packaging of content into bundles that is driving this. And there are Moore
options for consumers than ever. The marketplace may be more competitive than
ever, but it is also more expensive than ever to obtain the rights for quality
programming, to attract subscribers to whatever type of bundle you are selling.
Bert may not lke it, but bundles of streaming linear programming are growing
rapidly; a major reason for this is that subscribers can access the content
they are paying for on all of their devices.
The article seems to miss the point, though, when it insists with this
"increased sports rights costs." Seems a lesson that's hard to learn. The
higher the MVPD fees are, the faster people are bailing out. Same is
happening to the sports leagues. Raise prices, and no one pays. At some
point, someone will get what's going on.
But this is not happening Bert.
People are paying more than ever for their TV fixes, and there is no sign that
this is going to change, even as the underlying delivery technology evolves...
Regards
Craig
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