Category Archives: TV Business

Cable Network Musical Chairs and TNA on Destination America (Huh?)

Discovery Communications has long been at the forefront of new technology; their HD Theater channel (which eventually became Velocity) was one of the first HD channels, and before that they were one of the first companies to take advantage of the explosion of channels digital cable opened up. In 1996, Discovery opened no fewer than five new channels: besides Animal Planet, which Discovery was able to get in nearly as many households as their main network, Discovery launched Discovery Kids, Discovery Civilization, Discovery Science, and Discovery Travel and Living. Of those four, not one still has its launch name, and only Discovery Science didn’t change its name multiple times, becoming the Science Channel in 2002 - and even that doesn’t count addition, subtraction, and changing of articles and descriptors. Discovery Kids became a joint venture with Hasbro and relaunched as the Hub, but reverted to Discovery Family earlier this year. Discovery Civilization, originally Discovery’s answer to the History Channel, became a joint venture with the New York Times, rebranded as Discovery Times in 2003, and began adding more shows about current events and “American people and culture”. In 2008, after the Times had dropped out of the venture, it became Investigation Discovery, primarily a home for “true crime”-type shows. But that’s nothing compared to what happened to Discovery Travel and Living, which went through no fewer than two major shifts in focus.

By 1998, it had become Discovery Home and Leisure, Discovery’s answer to HGTV. In 2008, after it had become clear that the channel wasn’t standing out in the crowded home improvement channel marketplace, Discovery relaunched it with much fanfare as Planet Green, the first network dedicated to the environment and ecological living. Discovery infused $50 million into original programming for the channel, but it went nowhere, especially with its launch coinciding with the onset of the Great Recession, and by 2010 programs unrelated to the network’s ecological theme began creeping into the schedule. By 2012 the channel was clearly just limping along until Discovery could find a new format to replace it with and put Planet Green out of its misery. That new format turned out to be Destination America, a channel targeted towards “middle America” with a collection of America-centric shows, best described as a make good for Discovery selling the Travel Channel in 2007.

And now? Now Destination America announced on Wednesday it will be adding TNA’s Impact professional wrestling when TNA’s contract with Spike expires at the end of the year.

All this got me thinking about the fate of G4, which Comcast launched in 2002 as a channel about video games. In 2004, it absorbed the TechTV channel and became known as G4techTV for a short time. It started becoming a more generically male-oriented channel similar to Spike, but by 2009 was starting to decline, and in late 2010 DirecTV dropped the channel citing limited interest, effectively putting the writing on the wall. Comcast entered talks to sell G4 to the UFC or WWE to become their own networks in 2011, but those talks fell through, and in 2012 Comcast wound down G4′s once-popular (or at least cult-following-holding) remaining original programming, X-Play and Attack of the Show! At the end of the year, it looked like G4 had found its next incarnation when it was announced it would rebrand as Esquire Network.

Then in September 2013, barely two weeks before the much-postponed rebrand (originally slated for April) was to take effect, Comcast, now through its NBCUniversal division, announced that they would rebrand Style, not G4, as Esquire Network, citing Style’s considerable target demographic overlap with other networks in the NBCU portfolio, specifically E! and the networks Bravo and Oxygen Comcast acquired in the merger. Esquire Network, by contrast, was seen as filling a hole underserved elsewhere in the company or on all of cable television (some of Style’s female-skewing shows would remain on the male-skewing but metrosexual-oriented network), and G4, for which Esquire represented a more natural evolution of, was at least a part of the company that wasn’t nearly as duplicated as the glut of female-oriented networks Comcast had. But the move of Esquire to Style was no reprieve for G4, which by that point had declined to 62 million homes to Style’s DirecTV-infused 75 million. Comcast allowed its carriage agreements to lapse and even dropped G4 from its own lineup, and recently word came out that G4 would disappear from those few channel lineups that still had it at the end of this month.

That Comcast would move the Esquire Network rebrand off of G4 and onto Style, but then let G4 fade out of existence rather than do anything else with the channel space, effectively pissing off two fanbases for the price of one, never made sense to me. As the cases of Destination America and G4, not to mention Fox’s national sports network shakeup of 2013, show, big media companies are loath to attempt to start a new network from scratch, preferring to rebrand an existing network that isn’t doing much of anything but has spots on channel lineups already secured. Of all the companies I mentioned in Part IV of my Nexus of Television and Sports series that control most of your channel lineup, none has actually launched an entirely new full-time English-language cable network other than one of the Epix channels since the Fox Business network in 2007 (and the Smithsonian Channel shortly before that), unless you count the 2010 launch of Fox Soccer Plus to replace bankrupt Setanta Sports. Smaller entities launch networks from scratch only because they don’t have existing channel space to begin with, and even then most of the ones that have come along in recent years owe their existence to the condition requiring Comcast to carry minority-owned networks as a result of the NBCUniversal merger, with the possible exception of 2012′s beIN Sport; by my estimation, the network in the most homes to be founded since 2007 other than beIN Sport is the American version of RT in 2010.

For most of the networks launched in the midst of the digital cable boom of the late 90s and 2000s, they find themselves in a game of format musical chairs, desperately looking for something, anything, that will attract an audience and catch on, and if they don’t they become the target for the next channel idea the suits come up with. When Oprah Winfrey wants to have her own network, Discovery merges Discovery Health into the somewhat redundant FitTV and gives Oprah the space freed up. When Fox wants to launch a spinoff of the National Geographic Channel focused on animals, they shut down Fox Reality to do so. Fox even decided to launch its new FX spinoff FXX concurrently with its sports shakeup last year on Fox Soccer, even though that placed it in a limited number of households and not only in a channel neighborhood with sports channels, but in many areas on a sports package. In this light, it is mystifying that Comcast would allow themselves to let a channel space wither away so casually, even one in as few homes and without DirecTV carriage as G4. Heck, Destination America, a little over a year ago, was pegged at under 60 million households and it’s hardly withering away.

Nothing better illustrates how badly oversaturated the market for linear television channels is. What has become apparent over the last seven years plus is that people will follow the content (or at least that’s what Destination America hopes); the channel it happens to be on is just an address, and whatever else happens to be on the channel is immaterial, and the people that own the channels just want to secure one of the limited number of things out there that have or will attract an audience to their channel. Which brings me back to TNA.

TNA, for those who don’t know, has spent most of the new millenium desperately trying to be a competitor w ith WWE. It got its start in 2002 running pay-per-views on a weekly basis, which pretty much no one else was doing, allowing it to very much live up to the pun in its name. Eventually in 2004 TNA secured a deal to run a weekly show on Fox Sports Net, allowing them to move to the monthly pay-per-view model used by the WWE, but that show was cancelled after a year, and iMPACT! (as the show was called then) moved to a webcast for a few months before being picked up by Spike, which had just lost WWE’s flagship Raw program. TNA never really went anywhere on Spike, but it attracted a consistent, strong audience of over a million viewers every Thursday (and Monday in a brief, disastrous attempt to go against Raw, and Wednesday in recent months), and when Bellator MMA moved to Spike after that channel lost the UFC TNA was instrumental in helping build an audience for it. However, relations between TNA and Spike soured in recent months to the point that Spike would not even negotiate a renewal of TNA’s contract, merely letting TNA stay on the air until it found a new partner, a partner that proved far inferior to what Spike could offer.

Wrestling has long been an innovator when it comes to technological change - wrestling was a big part of what built WTBS in the 70s - and TNA’s adoption of monthly pay-per-views and going to the Internet when FSN didn’t renew their contract, even if it was a necessary result of circumstances, is a big part of that. In that light, and in light of the launch of the over-the-top WWE Network earlier this year (even if subscriber counts for it have failed to meet expectations), it’s somewhat disappointing to me that TNA would shack up with a marginally-distributed network, one without much of an identity at all but to the extent it has one meshes questionably well with TNA’s content, rather than blaze a trail on the Internet in an environment friendlier to webcasts than the last time they tried it. Heck, near as I can tell TNA will completely disappear for the rest of the year with Spike airing a collection of “best of” shows until TNA makes its Destination America debut in the new year. There are a number of reasons to suspect TNA is in the midst of a long, slow decline, and while I don’t know that moving to the Internet would have stopped it in the long or short term, I certainly don’t think moving to a marginally distributed cable network at a time when cable as a whole may be on the decline will help.

The Other Threat to Net Neutrality

The issue of net neutrality flared up again earlier this week when, after FCC Chairman Tom Wheeler introduced a new “hybrid” franken-proposal that ignored all the reasons why so many millions of comments supported Title II reclassification by only putting half the market (a half that had never been seen as a separate market before) under that bracket of telecommunications law, leaving everyone unhappy in the process, and the same day net neutrality supporters rallied in front of Wheeler’s house, President Obama came out swinging, not only staunchly defending Title II reclassification but laying out several specific principles he’d like to see in any net neutrality plan. Combined with the public smearing Sen. Ted Cruz received after comparing net neutrality to Obamacare, it’s become apparent that this will end with the Internet being reclassified under Title II, or strong, litigation-proof net neutrality protections being installed in some other way, no matter how long it takes. The masses of the Internet will not let it end any other way.

But if you think the broadband companies are going to stop fighting to tear down net neutrality, or that simply codifying it in law will prevent them from undermining it in other ways such as Comcast’s interconnection blackmail of Netflix, you’re mistaken. There’s something else the FCC is doing, far more under the radar, that is just as much a threat to the ideal of net neutrality than their explicit Open Internet rules – maybe a bigger one, because it could completely undermine the ability to maintain net neutrality in the long term. That would be the broadcast incentive auctions recently postponed to early 2016. Read More »

Against the Tyranny of Nielsen

Last year, Nielsen announced that it would be adding “broadband-only homes” to its television ratings sample and viewing universe. This category consisted of people that not only didn’t subscribe to cable television, but didn’t even have an antenna to watch broadcast television, and thus couldn’t watch any programming on any platform that Nielsen normally measures, so their inclusion in the sample must have seemed superfluous and useless. As a result, ratings, and the estimated universe of people that could watch cable channels, fell. On the other hand, Nielsen also announced that starting this year, it would begin including online viewing of content in its TV ratings… so long as the ad load on those programs was exactly the same as when it aired live.

This unusual outcome is the result of the tension between Nielsen’s actual role in the television industry and the role it inadvertently fills as a result of it. Television networks pay Nielsen to tell them how many people are watching the ads accompanying their programming, because the ads are what are paying for the programming and the people who buy ad time want to know if they’re getting their money’s worth and where they should spend it if they want to. For most of Nielsen’s history, that meant measuring how many people were watching the programs, and as such Nielsen became the barometer for how popular America’s TV shows were.

As time-shifting became more popular, however, and as Nielsen’s measurement practices became more refined, these two purposes became increasingly at odds with one another. Today the currency in the TV industry is “C3″, or how many people are watching each minute of commercial time either live or within the first three days of DVR playback; some media buyers this year have adopted “C7″ as their currency, which is exactly what you think it is. In other words, if you fast-forward past the commercials, your viewing counts for jack all to the networks even if you’re in a Nielsen household. Neither of these are widely reported, but it doesn’t matter because most people do, in fact, fast-forward past the commercials, and waiting the amount of time it takes for the C3 or C7 ratings to come out isn’t always practical (especially if you have a ratings flop on your hands), so the live-plus-same-day ratings that are widely reported are good enough for most purposes. (Nielsen’s definition of “live” is so restrictive that there are enough same-day viewers watching enough commercials to be useful.)

Nielsen’s move to counting broadband-only homes is a direct response to criticism from outside the TV industry that Nielsen dramatically undercounts the true popularity of many shows, especially in the most valuable demographics, by not counting viewership on alternative platforms besides live TV and time-shifted DVR – an attitude that expects and assumes Nielsen to be primarily concerned with its role as barometer of shows’ popularity. But in order for measurement of online viewing to be in any way relevant to the networks that are only concerned about who’s watching the commercials they sold for those shows, Nielsen has to impose the bizarre “same ad load” requirement, which no network or online platform would put in place without the incentive of being counted in Nielsen ratings, preferring dynamic ad insertion techniques that can adjust based on a viewer’s location and Web browsing habits. I try to stay away from authenticated TV Everywhere services, but I did have occasion to use my Dad’s account to use WatchESPN recently, and I found that even there, even while watching the live feed of an ESPN channel that is supposed to be no different from watching it on television, the ads were not the same as on TV, meaning no one using WatchESPN could be counted in Nielsen ratings. Heck, there were one or two commercial breaks where no ads were inserted into the feed, and I still wasn’t getting the ads that were being shown on television, just a placeholder slide.

It is certainly true that the model of television on which Nielsen is based is becoming outdated, but the reality is that Nielsen shouldn’t have had to create such contortions to count online viewing towards its TV ratings, because no matter how many viewers aren’t being counted, as far as the networks are concerned, Nielsen is working exactly as it should. The problem is not that Nielsen is falling short on the goal it doesn’t really have to serve as barometer of the popularity of television shows; the problem is that that role is still relevant even though Nielsen should not really be concerned with filling it. The problem is that the success or failure of television shows is staked to a system that, structurally and by design, can only capture a fraction of its popularity. And this is not a problem with Nielsen, but with the networks.

The vast majority of big-budget, big-studio shows are still widely assumed to need a place on a linear television network’s schedule, to be underwritten by the network and distributed by them to the network’s audience. The network, however, only cares about the show – or at least, should only care about the show – insofar as the show can attract people to the advertisements they can intersperse throughout the show. If not enough people are watching it live to serve as a captive audience for the commercials, the network can and will cancel the show. If a show is on network television, its existence is dependent on the commercials the network airs, or else the network can cut bait and abandon the show, potentially driving it out of existence no matter how popular the show may be on platforms that don’t expose their audience to the same commercials.

Shows should not be dependent on this system, on networks that will stake the show’s existence to a particular set of commercials inserted into the network’s feed. The presence of a show on a linear television network, and thus a show’s ability to attract audiences to a linear network’s commercials, should not be a precondition for a show’s existence; rather, a show should have a presence on a linear network only if that network has reason to believe that they can sell commercials off it and attract the show’s audience to those commercials by giving them a reason to watch it “live”. We’re a long ways away from the day when a show’s presence on linear television is a recognition of its value to the network rather than a precondition of its existence – we’ll know that day has arrived when a show that originated on the Internet moves to linear TV rather than the other way around – but we’re at least seeing halting steps towards throwing off the tyranny of the linear networks and of Nielsen, through the original shows on Netflix and Amazon and through Yahoo’s recent move to give Community one last season. The arrangement between CBS and Amazon for Under the Dome also frees that show’s fate from being dependent on the Nielsen ratings, though as it happens the show has done quite well for CBS, especially for a summer show.

Just as I don’t think linear television is necessarily completely obsolete in the age of the Internet (and it may in fact be of paramount importance, if lessened compared to pre-Internet days), so I don’t think Nielsen needs to worry about its core business going under; even with the prospect of broadcast linear television colonizing mobile devices, given the appeal of that prospect to the consumer and the basic nature of the technology there will always be a place for Nielsen’s measurement methods so long as the transmission of advertising isn’t dependent on a two-way connection over the Internet. I only hope that, so long as linear television remains the primary mode of video consumption, Nielsen does not overly hobble the prospective future where it is not, and that by the time that future arrives both networks and ad buyers (and to some degree the public) will be fully aware of Nielsen’s limitations.

What is the Sports Blackout Rule the FCC Just Repealed?

On Tuesday the FCC voted unanimously to repeal its 40-year-old sports blackout rule, a move that means a lot less than its coverage in the media has made it look like. This is not, in itself, the rule that prohibits the broadcasting of NFL games that don’t sell out or the rule that frustrates MLB Extra Innings subscribers so much, but it is related to the former. As this Awful Announcing piece explains, the blackout rule essentially provides a backstop for the NFL’s blackout rule by prohibiting cable providers from airing games blacked out on local broadcast stations. (It technically applies to all leagues, but the NFL is both the only league with a blackout policy this would apply to and the only league that hasn’t seen virtually all its games migrate to cable anyway in recent decades.) It was never particularly a matter of good policy, with the FCC putting a foot on the scales of private enterprise, but its weird specificity (which betrays its vintage from an almost unthinkably different time not only in the NFL, but in the cable business and the television business more generally) dulls its effect enough that it’s hard to see its repeal changing anything, at least in the near term, given the NFL’s existing contracts.

Despite this, AA itself has inflated the rule’s importance in subsequent reporting on the debates on the issue, and the NFL warned that repealing the rule could force the league to abandon broadcast television and move to cable. It’s hard to see how a rule that keeps games from airing on broadcast, one the NFL could easily repeal its end of tomorrow and obviate the effect of the repeal of the FCC rule, is protecting the presence of games on broadcast, but the FCC’s response, noting the league’s current contracts run through 2022, is worrisome to me, because it doesn’t cover what happens after that, given cable’s unfair advantages, or the fact that the Big Four networks have made clear they would abandon over-the-air television themselves if they could.

Could cable providers air games the NFL has blacked out on local stations? Maybe, but if such isn’t covered by the NFL’s exclusive deal with DirecTV for Sunday Ticket the NFL could still police it, with a potential last resort of holding NFL Network and NFL RedZone over their heads. It may or may not affect DirecTV’s own ability to show blacked-out games, assuming DirecTV blacks out games on Sunday Ticket that are blacked out on the local station, but if so it’s likely that’s guaranteed in their contract as well and the league could continue to police it. The repeal of the FCC’s rule might change the economic incentives for the league going forward, but again the prospect of blacked-out games airing on cable undermining their presence on broadcast is a problem of the league’s own making through their imposition of the blackout rule in the first place. If the NFL declares in their next TV contract – and I’m assuming the impossible, that by the end of this decade the content landscape is exactly as it is today – that the repeal of the FCC rule is forcing them to abandon their commitment to broadcast TV and move their games to cable, it would call into question their motivations for making that commitment to begin with. Protecting gate attendance, no matter what way you slice it, seems to have little to do with protecting the league’s presence on broadcast television, and anyone who thinks there’s a serious prospect of the league eventually abandoning broadcast should be paying more attention to the broken economics of the television industry and the prospect of broadcast being permanently if not terminally crippled by the upcoming incentive auctions. All told, the repeal of the FCC’s blackout rule is a purely symbolic gesture not worth the ink spilled on it, but it does give some indication that the FCC is willing to stand on the side of the consumer and good policy – at least, if they can also stand on the side of the cable companies and against broadcasting at the same time.

When and how did broadcast television lose the battle to cable?

What is the most popular programming on television this summer? What network is most attracting viewers’ attention with all the choices out there?

Is it NBC on the back of its hit reality show America’s Got Talent?

Is it CBS and its collection of shows popular with all ages, from Big Brother to 60 Minutes?

Is it ABC with shows like The Bachelorette? Or Fox with MasterChef and Hell’s Kitchen?

Perhaps it’s something on cable? Might it be TNT on the back of Major Crimes and Rizzoli and Isles?

Perhaps it’s USA on the back of the insanely popular WWE Raw?

Perhaps it’s seasonal and occasional programming like Shark Week on Discovery or Sharknado 2 on SyFy?

Perhaps it’s whatever ESPN puts on, since sports seems to be the big thing these days?

The correct answer is none of the above.

For 12 of the 24 markets where at least one relevant RSN isn’t embroiled in carriage disputes, the correct answer is the local baseball team on the local RSN, according to Maury Brown’s analysis on Forbes.com.

Several more teams place in the top three, and every single one of the 27 US teams whose RSN isn’t embroiled in carriage disputes ranks in the top nine shows in primetime in their respective markets – regardless of how they’re doing in the standings.

All told, local baseball team games add up to an average 1.99 household rating – and that doesn’t include the viewership the Dodgers and Astros would be getting if they weren’t mired in carriage disputes, or the viewership teams get from outlying markets.

For the record, the 10th-most watched show on cable TV for the week of August 4-10 only managed a 2.2 rating – and at least two shows in the top ten didn’t air in primetime.

Forget about ESPN; it may well be RSNs and the local sports they provide that keep people tied to their cable connection more than anything else.

Out of all national baseball broadcasts in 2013, only four or five of the six World Series games drew a higher rating than Detroit Tigers regular-season games averaged through the 2014 All-Star Break. Only the remaining World Series games beat the regular-season average of the Cardinals and Pirates – and one of those teams was in that World Series. And the World Series was on broadcast, while all those local games were on cable.

Perhaps most tellingly, no sports event on cable that wasn’t a BCS or NFL game drew a better rating in 2013 than the Tigers, Cardinals, and Pirates 2014 regular-season averages.

For all that I complain about the BCS (and now the CFP) and the Final Four moving to cable, perhaps it is the absence of local Major League Baseball games on broadcast television that is the real crime. Of the many reasons why I hate the existence of “MyNetworkTV”, perhaps one of the bigger ones is that it should not have been necessary to provide programming to fill the hole on stations left behind by the CW merger. Local sports, especially baseball in summer, could have more than sufficed – if those stations were willing and able to acquire it.

By the way, MyNetworkTV was founded in 2006, two years before the BCS deal that first opened my eyes to cable’s unfair advantages over broadcast and made me worried about the march of sports events to cable.

Which brings me back to the question in the title of this post: When and how did broadcast television lose the battle to cable?

Was it the advent of the dual-revenue stream pioneered by ESPN? Was it when UPN and the WB were founded, giving formerly independent stations programming commitments that made it harder for them to air local sports? Was it when – implicitly voluntarily – broadcast stations “stopped bidding for sports rights“, surrendering them, the massive ratings they entailed, and what would turn out to be a big chunk of the reason for the existence of all of linear television, to RSNs that would in turn keep people tied to their cable connection? Was it when the CW merger happened and the stations left behind formed and/or joined MyNetworkTV rather than face an uncertain future – one that could have made them far more relevant than any alternative?

Whenever it happened, one thing is clear: the disappearance of local baseball from broadcast television is one of the great underrated stories of the rise of cable, and one of the great missed opportunities of the past few decades for broadcast – and still represents perhaps broadcast television’s greatest opportunity for relevance going forward. I still think the stations exist to support a true fifth broadcast network - in large part due to stations that held steadfastly to their independence rather than join the Fox network when it launched. But given this, I’m no longer sure how many of them would want to.

The potential of the American Sports Network

The Sinclair Broadcast Group is representative of everything wrong with broadcasting in the new millennium. During the 00′s they became notorious for repeatedly airing “documentaries” on their stations that were hit pieces on Democratic figures and causes, most notoriously one on the Swift Boat accusations against John Kerry in 2004. Even before that they were a dirty word in media consolidation circles for their use of shell companies to circumvent FCC rules prohibiting owning more than one station in a market (and later, owning more than two in a large market). Recently, they’ve gone on an acquisition binge, including DC-based Allbritton and Seattle-based Fisher, that has them bumping up against another FCC limit: if the FCC goes forward with eliminating the “UHF discount” (counting UHF stations as only half their market value against the national cap) Sinclair will be bumping up against the limit in a way that the companies owning the stations in the largest markets – and who also own the very networks Sinclair is affiliated with – will not be.

But Sinclair’s market power also gives it considerable influence over the future direction of the broadcast industry. And in that light, today’s announcement of the American Sports Network, or ASN, fits so perfectly into the framework I laid out a year ago that I can’t help but wonder whether someone at Sinclair read the version of that post I put on RabbitEars.info. Assuming it’s not so dependent on retransmission consent revenue that it results in Sinclair undermining their own nominal means of distribution, it could well be the key to the broadcast industry’s turning around its fortunes. And though it launches with only five mid-to-low-tier college conferences on board (only one of which plays FBS football), it could well prove to have a better shot at running down ESPN than any other player that has come along so far.

ASN will initially be distributed primarily across Sinclair’s CW and MyNetworkTV affiliates, and on digital subchannels on Sinclair’s other stations. The press release also mentions that “other broadcasters” are interested in airing ASN content as well. This makes me wonder whether Sinclair’s long-term plan is to turn ASN into a potential replacement for the CW and/or MyNet, especially in light of yesterday’s news of Fox’s attempt to buy Time Warner, which would have given them half-control of the CW and likely resulted in either the CW turning into CBS’ version of MyNet or the closing of MyNet entirely (and especially if they throw in Ring of Honor wrestling). The press release also mentions the potential launch of “new cable networks and digital platforms” surrounding ASN content, pending securing agreements with cable providers – which could refer to an aspect of what I had in mind last year I didn’t dare mention or even hint at, which would allow ASN, were they to set their sights much, much higher than the likes of Conference USA, to avoid the pitfalls that were the downfall of Fox Sports Net.

Throughout the 90s, many people felt that the collection of regional sports networks across the country, including the majority of them operating under the SportsChannel and Prime names, were they to join together as a single force, could put together a sports empire rivaling ESPN, given their distribution advantages and the attractive programming from local teams they could offer. But when Rupert Murdoch bought the SportsChannel and Prime networks with an eye to doing just that, the very thing that looked like so much of an asset proved to be FSN’s undoing. Any national programming FSN had was prone to being pre-empted for local teams’ games, which meant any entity with a national programming arrangement with FSN automatically had a worse deal than if they were with anyone else (something then-Pac-10 fans especially chafed at in the early-to-mid-00′s), and any national studio shows couldn’t count on a consistent time slot or even consistently airing at all. (I remember how upset I was when the Mariners played an East Coast game that pre-empted “I, Max”, the show Max Kellerman got from FSN upon leaving ESPN, entirely.) Now the rise of the RSN owned by the team playing on it, coupled with the rise of Comcast as an RSN player and aided by Fox’s own actions, has taken Fox’s once-complete hegemony over the RSN marketplace and greatly dismantled it.

Suppose Sinclair were to sign up a much bigger array of content for ASN – major professional sports and major college conferences, maybe some top mid-majors as well – and signed up affiliates from all over the country. And suppose they then launched a cable channel that amounted to an ASN national feed, taking content from their various rights deals and distributing them to a national audience. Sinclair could offer certain ASN programming “nationally” to various ASN stations, but even if that programming were to be rejected or pre-empted for something of local import, Sinclair could simply stick it on the ASN national feed, ensuring truly national distribution for the biggest content Sinclair has. Sinclair could then have an alternate feed to stick on other programming in markets where the main ASN game is airing on the local ASN station. In effect, rather than being inferior to any cable network with decent national distribution, being on the ASN national feed would be a sort of hybrid between being on a national broadcast network and being on an ESPN knockoff.

For ASN to really reach its potential, the FCC (and Congress) would need to fix the broken economics of the broadcast business, where broadcast stations and networks must either embrace the retransmission consent regime and thus see themselves as cable networks first and foremost, or inexorably lose programming to actual cable networks with their decided monetary advantages. Depending on how it’s done, and how the Internet shakes up the live video marketplace, it could completely upend the competitive landscape and destroy the potential of most of the ideas (not to mention the metaphors) in the previous paragraph. But if it happens, here’s the blueprint I would have for ASN to succeed where FSN failed and for the broadcast industry in general to bounce back from the point where its own nominal guardians have turned against it:

  • Convince teams, leagues, and conferences that between the FCC’s reforms and the impact of the Internet, the cable network market is badly oversaturated, and given the superiority of the technology of broadcasting (leaving aside the economics and regulatory landscape surrounding it), the regional sports network and league- and conference-owned network, though in better shape than most cable networks, is a bad way to go, especially considering the bitter carriage disputes surrounding them. Convince stations around the country of the same thing and that whatever obstacles they may face in the short term will be outweighed in the long term by eliminating one of the biggest barriers left to widespread cord-cutting.
  • Offer to negotiate on behalf of every English-language general-entertainment station not associated with one of the major networks (or a network seriously trying to be one of the major networks), not just ASN stations. Then make a deal with the leagues: so long as there are stations available, every game of a team that claims a given market will be televised, but any game there’s not enough stations for cannot be blacked out on the out-of-market package. This may take the form of an NFL-esque deal where ASN handles the distribution of every team’s game not on a non-ASN national platform. This is especially important for baseball, but allowing the ASN national feed to take content from any station allows the national feed to take content from any team or conference it wants without tipping the scale in negotiations towards ASN stations. (Some side notes: first, “digital subchannels” are a failure and I don’t see them surviving the upcoming FCC-mandated auction and repack; otherwise the ASN national feed might be one. Second, this would be largely dependent on CBS and Fox being open to aiding something that might take a bite out of their main networks in order to maximize the number of stations available in the largest markets; if they aren’t, the FCC might have to repeal or severely tighten the duopoly rules, which could leave Sinclair unable to run ASN. Third, the borders between conferences are blurry enough now that many areas may be within the sphere of influence of multiple conferences, so it may not be possible for ASN to handle them all alone; fortunately, more markets than you think have at least two stations of the type I discuss here even with a fifth network, especially if you count the enigmatic Ion network. And fourth, every game is more than any station has ever showed in a non-NFL professional sport, but in retrospect that practice merely opened the door for the RSN to walk in and undermine independent broadcasters, at least sooner than it could have.)
  • The existence of the ASN national feed and rise of the Internet may obviate the need for league-owned networks. Some college conferences (namely the SEC and Big Ten) may be confident of their ability to keep their conference networks going even under the new economics, given the passion of their fanbases. To counter this, export the conferences you do have to the entire country. You don’t have to give national distribution to every single conference, but if most of SEC and Big Ten territory can get ACC or Big 12 games for free (and hopefully, without needing a kludge to get them on a mobile device), and can’t do the same with the SEC and Big Ten, it could put a big scare into the both of them.
  • Don’t get involved with the NFL unless it falls in your lap, then snap it up in a heartbeat. Some of your stations are probably going to show NFL preseason games and cable-game simulcasts without your help.

The end result could be a landscape where only two cable sports networks are left: ESPN and the ASN national feed (assuming cable networks themselves still exist as we know them once the Internet is done with them). Things that don’t fit the local team-sports framework like NASCAR and golf would probably go to ESPN, and ESPN would probably still have important maj0r-league pro sports games, but events like the college football national championship game would abandon ship and return to major broadcast networks where they belong, and ASN’s combination of national distribution and local broadcast stations could give it a significant advantage in any negotiations, and they could find themselves in possession of important MLB, NBA, and – perhaps especially – NHL playoff games.

Is this a bit of a utopian pipe dream? Sure – this is the sort of idle imagining I spend way too much of my free time on and then am hesitant to put on the blog because it has so little relation to reality. This one, though, has just enough relation to reality to be an enticing vision for those that believe in broadcast television – and sometimes, a concrete yet distant vision is just what’s needed to be the impetus for change. If the future of broadcast television lies in live sports, this may be the first, halting acknowledgement of that fact – and the start of broadcast television’s comeback. The only problem is, is it too late?

Does Sports Explain Why Fox Wanted to Buy Time Warner?

We’re coming up on the one-year anniversary of the launch of Fox Sports 1, and despite what the people in charge have said publicly, it has to be considered a big disappointment. The most-watched programming on the channel tends to be NASCAR-related… most of which the channel already had when it was Speed, and even if it doesn’t tends to appeal mostly to people who already knew where Speed was. Except for NASCAR programming, the gap between Fox Sports 1 and ESPN has been cavernous, with FS1 even unable to catch ESPN2 and struggling to pull away from NBCSN, and despite public appeals for patience the fact that FS1 has cancelled most of its launch lineup suggests the internal attitude is something else (especially with Fox offering make-goods to FS1 advertisers on the World Series). Other than NASCAR, the channel’s brightest spots so far are probably UFC and college football, and a) UFC programming has tanked relative to the same shows on FX and ratings for college football and basketball games are generally way behind games with similar appeal on ESPN or ESPN2 and b) they haven’t had very good retention for Fox Sports Live (something NASCAR has oddly been better at). Fox’s hopes are now pinned on the baseball playoffs to further bump up FS1 ratings, and after that Fox will be hoping the World Cup and US Open golf help FS1 more than FS1 hurts them (and the World Cup is the sort of short-run event programming that is likely to bump it up in the short term but have little long-term effect, as the Olympics has for NBCSN). If Fox were to pick up Big Ten rights it would be a big help, but they’re also making a long-shot run at NBA rights – possibly in addition to ESPN and Turner rather than replacing one of them. Fox’s biggest short-term sustainable boost they have to look forward to is probably NASCAR rights – which, besides attracting an audience already familiar with the channel when it was Speed, are uniquely unlikely to check out and are sometimes openly hostile to the rest of FS1′s “stick-and-ball” lineup.

Could this help explain why Rupert Murdoch made a run at buying Time Warner in June?

Let me be upfront that I personally would dread a merger of Fox and Time Warner that would create an absolute behemoth, place CNN under the Fox umbrella, and further degrade broadcast television by removing quite possibly the only company with the means and motivation to launch a true fifth network (but that’s another story) and, by inheriting Time Warner’s partnership in the CW, leave Fox with little motivation to keep running MyNetworkTV. (Though if that leaves Tribune to go without the CW, it might actually turn out to be the best possible outcome.) But strictly from a sports perspective, even though some people have naively wondered whether CBS and Time Warner would merge based on their partnerships on March Madness and the CW and their complementary sports assets and lack of direct competition outside premium cable channels, a Fox-Time Warner merger makes a lot more sense.

From the dawn of cable television, Turner has been a leader in sports programming, not being passed by ESPN until the 90s, and for all the talk of efforts by Fox, NBC, and others to make a run at ESPN, Turner has remained the company with the strongest assets to challenge ESPN of anyone, and TBS and TNT have remained the biggest non-ESPN sports destinations on cable, even with the impending loss of NASCAR programming and cutting back on MLB. Suppose Fox were to acquire Time Warner and move all the sports programming currently on TBS and TNT to FS1. Suddenly FS1 would have:

  • Turner’s high-profile critically-acclaimed NBA coverage, including Marv Albert and Charles Barkley, with games running all the way to the conference finals plus the NBA All-Star Game, control of NBATV as well, and a pretty good case to steal the broadcast component of the package away from ABC during the next negotiations (a potential nightmare scenario for the NHL)
  • Control over the ENTIRE MLB postseason aside from one measly wild-card game on ESPN
  • Control of much of March Madness and possibly the ability to muscle CBS out of the Tournament, keeping March Madness to itself on Fox, FS1, and some other channels (FX and/or Fox News or CNN could replace TBS or TNT; if the NCAA wasn’t willing to accept CBS Sports Network they’re unlikely to accept FS2 as is) and maybe bringing Gus Johnson back to the event that made him famous
  • The first two rounds of the PGA Championship and some auxillary coverage of the later two rounds, adding some meat to Fox’s golf-coverage bones
  • Fox would also take over HBO and its sports coverage, possibly meaning higher-profile boxing cards on FS1 and/or UFC cards on HBO

Again, I would hope this merger doesn’t happen – the general consensus is that just because Murdoch was told “no” now doesn’t mean he’s going to take that for an answer – but it wouldn’t be the first time sports was a big impetus for a larger media deal (see Comcast’s hostile takeover attempt of Disney and later actual acquisition of NBC) and would give ESPN some legitimate reason to worry about a potential challenger to their throne, something FS1 has largely failed at so far.

(The potential irony? If all proposed media deals go through, Time Warner’s former cable division could end up owned by a direct competitor.)

The 200 Most-Watched Live Events of 2013

If, as I’ve suggested, the only purpose of linear television going forward will be to show live events that many people want to watch at the same time, then ratings for live events become a particularly important category to look at, because they form the underpinning of everything else. So here are the 200 most-viewed live programs of 2013 to my knowledge, with the top 50 ranked.

Breaking news outside of primetime (which basically means outside the manhunt for the Boston Marathon bomber), and other non-primetime news events such as the funeral for Nelson Mandela, are not counted because I couldn’t find any numbers for them. I’ve also guesstimated where to put the Tournament of Roses Parade and one NFL window because viewers (or at least, reliable viewer numbers) weren’t reported for them. I also assumed all non-audition episodes of American Idol were live, but marked the Hollywood and Vegas episodes with question marks. Events in red are news events; in blue are NFL games; in green are other sports events; in orange are awards shows; in purple are reality shows; and all other events are white. Read More »

Is There a Place for Common Sense in Supreme Court Decisions?

The Supreme Court Wednesday ruled 6-3 against Aereo, declaring the start-up’s array of miniature antennas available for rent to consumers in violation of copyright law. Astoundingly, the three dissenters were Justices Scalia, Thomas, and Alito, three of the court’s more conservative members. If you had to pick one person to symbolize the modern Supreme Court’s tendency to favor moneyed interests over ordinary Americans, the law, intent of the Constitution, and precedent be damned, it would probably be Scalia, followed by Thomas, then Alito and Chief Justice Roberts neck-in-neck. I would never have expected the conservatives to actually believe what they say they do enough to stand with the consumer and the scrappy, innovative start-up at the expense of the big, multi-national conglomerates, and as much as Democratic politicians may be in bed with Hollywood, I never would have expected every last one of the liberal justices to stand with the big corporations against the ordinary American. I know President Obama’s Justice Department filed a brief supporting broadcasters, but that was widely seen as disappointing, not sadly expected; I suspect this is an issue on which the Democratic decision-makers are well out of step with their rank and file. Maybe I’m just naïve (support in Congress and opposition among the public to SOPA was, after all, largely bipartisan), but it would be hard for me to deal with it if this turned out to be an issue on which I stand with conservatives and against Democrats.

But that’s not what I want to talk about. Rather, I want to talk about the tendency for pro-Aereo corners of the blogosphere (as well as Aereo itself) to decry the decision as being obviously wrong, to gloss over the sketchier elements of what Aereo was trying to do, take its own description of it at face value, and dismiss the majority’s reasoning as the “looks-like-a-duck test“, to speak of Aereo’s setup being designed to follow the law as opposed to “going around” it as though that were more than a semantic distinction. One of the things Americans don’t like about the legal system is the tendency to create overly complicated documents written in horrendously obtuse language with no resemblance to anything ordinary Americans could recognize so that people can get off on obscure technicalities. But when the Supreme Court finally looks past the technicalities and boils things down to what they actually are, but we happen to be on the side that wanted to take advantage of those technicalities, suddenly we want the court to follow the obtuse legal language, ignore what we’re actually trying to do, and let us skirt through the loophole?

I personally felt that, while Aereo was clearly trying to take advantage of a loophole in the law, it was the place of Congress, not the Supreme Court, to close it, and it sounds like the commenters on (the very liberal) Daily Kos agree with me. But I don’t think we’re giving the position the majority accepted enough credit. Leaving aside the technicalities of how it all works, what Aereo was selling was the ability to watch broadcast television stations, regardless of whether you had the ability to view them at your current location if you had an antenna, indeed without you needing to worry about having an antenna or where it was located. You, the viewer, don’t see where Aereo’s antenna is and don’t even necessarily know anything about where Aereo is getting the signals from. All you know is that you are giving Aereo money and they are supplying you with a bunch of television channels you may or may not be able to receive otherwise. Boiled down to those facts, there really is very little difference between Aereo and basic cable service (and some of the things Aereo had said about potentially carrying cable channels didn’t really help their case).

What this shows is that our communications and copyright laws are woefully outdated and rooted in assumptions that don’t hold water, that failed to anticipate technological developments that rendered the technological distinctions encoded in the law obsolete. The entire Aereo affair had a company resorting to technological contortions to provide a fairly basic service there was a clear demand for and broadcasters being undermined by the very nature of, and wanting to be rid of, their own nominal method of delivery, their own neglect of which helped create the demand for Aereo in the first place (and while they’ve won this battle, they may ultimately lose the war). The court said that if Aereo wanted relief they should go to Congress when they should have said that to the broadcasters, not only because that would have been the right approach but because the broadcasters would likely have been more able to get that relief. But putting the onus on Aereo does give Congress incentive to clear up a regulatory framework that assumes the primacy of the obsolete technology of cable television and undermines the potential of broadcasting, while creating perverse and unintentional disincentives for maximizing the distribution of content.

Report: WGN America to Drop Chicago Sports

For at least two decades now, and certainly for the past decade-plus, Tribune Broadcasting has been an anachronism: the last relic of an age of truly local, independent broadcasters, from a time when broadcasting was so dominant that broadcast stations’ fear of cable had to do with the prospect of importing other stations from outlying markets, a time when independent broadcasting was so strong that Tribune, the owner of the dominant independent stations in its markets, didn’t affiliate them with the fledgling Fox network, leaving Fox to leave Tribune’s VHF stations behind in favor of UHF stations in markets like Chicago and Denver in a time when that still mattered. Even as its stations have affiliated with the WB and later the CW, Tribune has steadfastly avoided being identified with those networks and, especially with the CW (which, unlike the WB, it doesn’t hold an ownership stake in), has downplayed its affiliation as much as possible. In the very biggest markets, the biggest general-entertainment stations outside the Big Four networks tend to be owned by CBS, Fox… or Tribune, the one company of the group not to be a massive conglomerate, even as it has increasingly become a more standard owner of affiliates of the Big Four networks in smaller markets, especially ABC and Fox.

A big reason Tribune has managed to maintain this strange, hybrid status has been its flagship station in Chicago, WGN, and its own status as the last relic of the early days of cable, when imported “superstations” were the main distinguishing feature from standard broadcast. While Ted Turner was exporting WTBS throughout the South, Tribune was doing the same with WGN throughout the Midwest, showcasing Cubs games in much the same way TBS did Braves games. Broadcast stations were able to get “syndication exclusivity” rules passed that required any syndicated programming on imported broadcast stations that also aired on a local station to be wiped from the feed, requiring the likes of TBS and WGN to set up separate feeds to export to outlying markets, but because such rules didn’t apply to cable networks that didn’t originate as local stations it left the superstations at a substantial competitive disadvantage and helped hasten their demise.

In the case of WGN, the advent of the WB further sealed its fate; WGN was able to carry the WB on its national feed in its early years, helping that network gain traction throughout the country in areas that didn’t have a WB affiliate, but as that problem slowly waned WGN eventually dropped the WB from its national feed, meaning the national feed increasingly became very different from the local Chicago one – which ironically may have helped it keep going longer. Tribune’s relatively smaller status also may have helped; TBS divorced its national feed from its local Atlanta station once and for all once it won a national baseball contract. Eventually, the WGN national feed was renamed “WGN America” with a different logo, and the only things it had in common with the Chicago feed were the 9 PM CT news and local Chicago sports.

Now, however, Tribune has signaled its intention to turn WGN America into a more traditional cable network and is wiping the last vestiges of WGN America’s superstation status from its lineup. WGN America dropped local Chicago news earlier this year, and now Tribune CEO Peter Ligouri has told Crain’s Chicago Business that WGN America intends to drop Cubs games and other Chicago sports at the end of 2014. (The article is behind a paywall, but if you want to read a possibly-illegally-copy-pasted version that reads like it was sent through a machine translator and back again, click here.)

The continued presence of Cubs games on WGN America was yet another vestige of a bygone age. In the early days of cable, there was no MLB Extra Innings, no more than one game a week on TV nationally, and MLB had a lot fewer teams than it does now. The Braves and Cubs were able to build large regional fanbases through the exporting of WTBS and WGN. With games with national interest on TV every day of the week on ESPN, FS1, and MLB Network, Cubs games on WGN America are less special, and the continued presence on broadcast those games require means missing out on the dual revenue stream from a regional sports network.

Despite all that, this is a bit of a head-scratcher to me. Tribune seems to be trying to catch the general cable network market on a downswing, right as it reaches a tipping point and starts to decline as online services like Netflix step on its turf. The value of linear television going forward is sports, so WGN America seems to be going in the exact wrong direction; I’d be very surprised if Cubs games, even with the team sucking in recent years, would be less popular than whatever original programming WGN America tried to put on its air (how much money it makes for WGN given production costs is another matter). This is especially the case since, owing to the SyndEx rules, WGNA has rather limited distribution compared to other networks of similar vintage, and may have to renegotiate its contracts from scratch if it divorces itself from WGN in Chicago completely. I would mention that the national carriage WGNA gives the Cubs is the one big value WGN would bring to an impending renegotiation of its contract, except that this move may itself be an admission that WGN is likely to lose the contract.

Tribune is in the process of spinning off its newspapers into a separate company, leaving its broadcast stations and WGN America as the heart of the company, along with digital investments. But those stations are themselves prone to potentially suffer the same fate the newspaper industry did as the Internet stepped onto its turf, and without affiliation with a Big Four network or (with the only exceptions being WGN and WPIX in New York) a sports presence, Tribune’s legacy stations seem particularly exposed. Tribune has been run by private equity firms since its emergence from bankruptcy in 2012, and besides turning WGN America into a conventional cable network, those firms have shown every sign of running Tribune as a traditional owner of broadcast affiliates (purchasing the Local TV group, another group of stations run by private equity firms, last year), yet no company is in better position to affect the future course of the broadcast industry. I hope the people in charge of Tribune have, or at least can acquire, a mindset of the television industry of the future, not the past.