Category Archives: TV Business

What the Mayweather-Pacquiao Distribution Problems Say About the Future of Linear Television

Of the many, many issues with the Mayweather-Pacquiao fight, from the fact it took so long to be put together to the continued arguments even after the fight came together to Credential-gate to the lackluster nature of the fight itself, the one that I found to be most interesting, and most telling both of the problems facing boxing and of the future of big-time sporting events in general, was the massive problems just getting the fight to the people who ordered it on pay-per-view. Every major cable system and probably most of the top minor systems were fending off complaints:

Though the cable systems took the brunt of the abuse, I’m not sure they were really to blame. HBO and Showtime called on people to “order early to avoid possible problems late” out of fear “the system” wouldn’t be able to handle a surge of orders, and the use of the singular suggests their concerns were on the joint venture’s end. As people flooded Twitter and operator lines with complaints on Saturday, though, HBO seemed to pass the buck back to distributors, so maybe I’m reading too much into it. Regardless, the result was the same: so many people wanted to watch the fight that “the system” couldn’t handle them all, to the point that the fight itself was delayed 45 minutes to allow all the orders to be processed. That doesn’t happen with other live events with far larger audiences than the over 3 million estimated buys of this fight:

What’s the difference? When it comes to events like the Super Bowl, cable operators don’t have to process each order individually – anyone can just turn on whatever channel the game is on if they’re already subscribed to or otherwise able to receive it. Hmm, I wonder if there’s any other means of distribution that’s like pay-per-view in this way

Besides serving as a potential knockout punch (if you’ll pardon the pun) to the idea that the Internet can ever replace linear television entirely, more evidently and directly this debacle raises serious questions about whether or not the Internet might lead to more widespread adoption of the pay-per-view model, which this fight showed cannot scale to the level of many millions of households with or without the benefits of linear television. Broadcasters are hoping to include the ability to restrict their content to paying customers like cable networks have in the next-generation television standard, but methinks that’s more likely to take the form of the subscription model than a pay-per-view model; I can’t imagine big events like the Super Bowl moving to a platform any more restricted than an ESPN/HBO-type platform (and I certainly hope the NFL, already courting streaming disaster with this upcoming season’s experiment with airing one London game on a digital platform, won’t compound it by making it a pay-per-view experience). Indeed, I can’t help but wonder, assuming there’s sufficient economic incentive to avoid this fate in the future, whether the WWE’s move to a subscription model with the WWE Network, as well as boxing’s sudden recolonization of broadcast and non-premium cable television this year (by way of Al Haymon’s Premier Boxing Champions), might be rooted in a recognition that both “sports” might need to either dump the PPV model entirely or at least maintain the advantages of linear television if either one is going to continue to survive and thrive in the media landscape of the future.

Wednesday, January 28 TV Ratings Report

Time for another ratings post proof-of-concept! This time I’m wading into the general ratings world. Ever since The Futon Critic stopped doing final ratings last year, we don’t have a site that lists broadcast and cable shows alongside each other, and we’ve never had them listed on a time-period basis like this so we can get some perspective on how popular cable shows really are and what shows would be tops on TV if broadcast still trumped cable. I aim to list the top five English-language shows in primetime at any given time in 18-49, and the top five original shows in 18-49, with Univision included for completeness, and when TVMI lists cable shows I’ll list the most-watched shows on television as well.

Sources: TVbytheNumbers (top 18-49 shows, cable news ratings), TV Media Insights (all broadcast shows, most-viewed shows), TV Recaps and Reviews (additional ratings for original cable shows). Shows in bold are new or live. Read More »

Ensuring a #CommActUpdate for the Twenty-First Century

The Republican-controlled House Energy and Commerce Committee has been collecting input for a comprehensive update of the Communications Act for over a year now, with an eye towards a “technology-neutral” law that avoids placing different technologies in different regulatory “silos” and instead treats equivalent technologies equivalently. Towards that end, it has been issuing a series of white papers on issues surrounding the effort, and the most recent one concerns an issue that, perhaps even more than net neutrality, illustrates how much this effort is desperately needed: the video marketplace.

I sent in my thoughts on the state of the video marketplace and on the more general question of what I would like to see in a technology-neutral Communications Act, which you can see here. You may also want to read the comments I sent to the FCC on its ownership review and on a la carte television, assuming the FCC site is up.

SlingTV Isn’t Breaking Up the Cable Bundle. It’s Preserving It.

Dish took the wraps off its long-in-the-works Internet-delivered TV service today, long known as “NuTV” but now officially known as SlingTV. (Dish has a working relationship with the Slingbox company but there is no other relationship between SlingTV and Slingbox.) For $20 a month you can sign up for a dozen channels from Disney, Turner, and Scripps, including the A&E networks partly owned by Disney and – crucially – ESPN, all delivered over the Internet, plus additional genre-based add-on packages for kids’ channels, news and info channels, and eventually, sports channels. The techie blogosphere, long friendly to “cord-cutting”, is over the moon at the possibility of being able to watch ESPN “without a cable subscription”, “liberated from the cable bundle” in GigaOm’s phrasing. GigaOm calls it “a cord-cutter’s best friend”; “a cord-cutter’s dream”, agrees Deadline; an “over-the-top alternative to the cable bundle”, writes TechCrunch.

None of these are in any way true. Sling TV may not be a cable company in the sense that they string a bunch of wires to your house (or in Dish’s case, put a satellite dish on your roof) and deliver hundreds of channels through it, but it is very much a cable bundle, even if a smaller one. You can’t pick and choose which channels of the base package of twelve you want and discard the rest, and you certainly can’t forego any of those base channels if you want any of the genre packages – especially important when Dish’s existing DishWorld service will be folded into SlingTV. Dish seems to be indicating it intends to keep the SlingTV suite lighter than a typical cable subscription, but make no mistake: the only reason this service doesn’t have more channels is because Dish hasn’t been able to get any other companies on board. If they could get AMC (and the other networks owned by AMC Networks), FX (and the other Fox-owned networks, including Fox Sports 1), or most other big companies’ packages of networks (especially Comcast for USA and NBCSN), they would.

Although Comcast and Time Warner Cable are the two most hated companies in America for a variety of reasons, the desire to be free of “the cable bundle” has never been about anything specific to them or their infrastructure. The channels have always been what’s mattered; how they’re delivered is immaterial. In that sense, what SlingTV is offering isn’t much different from what any other traditional cable provider is offering – something that should be especially apparent when the FCC is considering new rules that would treat Internet-delivered TV providers the same as any other cable or satellite company. TechCrunch paints Dish Network’s original launch as a challenge to the existing hegemony of the cable companies; Dish is now part of that hegemony. What makes them think SlingTV will be any different? Sure, it is cheaper than a traditional cable subscription for now, although given that cable companies often charge as much or even more than Internet alone than they do for Internet and TV, don’t expect to save all that much.

SlingTV believes access to ESPN is its killer app, but I won’t buy that any service like SlingTV is really going to break up the cable bundle unless and until it makes it easier for people to be able to not get ESPN. Anyone who signs up for SlingTV because of the programming on Food Network, Disney Channel, or A&E is supporting ESPN’s hegemony over the sports landscape every bit as much as they would be if they kept their existing cable subscription – and people who are interested in sports won’t get access to the regional sports networks that may be the real reason they aren’t cutting the cord. ESPN is the big winner here: it gets to appeal to “cord-cutters” without losing its hold on its lucrative business model that collects millions of dollars from people with zero interest in sports and funnels that into programming like the NFL playoffs and the College Football Playoff that make it a peer of the broadcast networks. SlingTV does nothing to break up that hegemony; it preserves it.

So to me, the real interesting part of this announcement (besides the ability to sign up and cancel the service any time with no long-term commitment) is that Dish is not including the broadcast networks, not even ABC, in SlingTV, even though a big reason it was able to get Disney on board was to settle ABC’s suit against the company for the AutoHop feature to skip commercials on broadcast networks. When Dish eventually does offer them, it’ll be as a separate add-on. The implicit message: We shouldn’t have to pay retransmission consent fees and jack up the price of our slimmed-down, low-cost service when our customers tend to be urban and capable of picking up broadcast signals with an antenna (not to mention, can watch a lot of broadcast shows on Hulu). I’m not sure they’ll be able to do that if the FCC makes them play by cable’s rules, since cable companies are required to carry any station that doesn’t ask for retrans on their most basic package and do the same for any station they agree to pay retrans for, and I’ve come out against “a la carte” proposals that make it easier to go without broadcast stations without making it easier to pick and choose cable networks like the “local choice” scheme that was floating around Congress a while back. But considering Dish has made clear it doesn’t see Sling TV as a full-fledged replacement for cable or satellite, if they can in fact make broadcast stations optional, perhaps it will serve as an impetus for broadcasters to invest in their signals instead of disdaining their own nominal medium in favor of being just another kind of cable channel.

How Broadcast TV is Like a Bus

[Free-to-air TV is] kind of like the horse, you know, the horse was good until we had the car…The age of broadcast TV will probably last until 2030.

-Netflix CEO Reed Hastings, speaking in Mexico City on Monday while downplaying the significance of Nielsen rating Netflix and Amazon (something I’m not sure how it would work or that it’s a good idea).

Here was my response:

Well before the car caught on, mass transit systems were already being built in the world’s biggest cities, although most of them used the established rail technology. An early horse-drawn “streetcar” was open as early as 1807, and in the United States in 1832; the first horse-drawn bus line opened in 1824. The first leg of the London Underground opened in 1863; an early precursor to the New York City subway using pneumatic tube technology was built in 1869, a year after an elevated line up the west side of Manhattan opened. By the time World War II hit, even Los Angeles, that car utopia, had one of the great public transportation systems in the world, as Who Framed Roger Rabbit put it.

Then in the postwar period the American dream, as defined as a cheap house in the suburbs supported by the freedom of the car, became the norm for most middle-class (white) Americans. The streetcars that lined America’s streets were replaced with buses that offered more flexibility to change routes, but that also proved their undoing; the perceived potential for bus lines to change at the drop of a hat meant it couldn’t support the transit oriented development that had typified urban development before the war. (That said, despite what Roger Rabbit would have you believe, the demise of the streetcars probably can’t be chalked up to a car industry conspiracy, but to real inherent drawbacks of streetcars as a technology; for that matter, the inability of buses to support development had as much to do with not putting much more investment into them than sticking a pole in the ground as anything else.) Outside of New York, as middle-class whites left the city and turned it into a refuge for the poor, so mass transit came to be seen as little more than a form of welfare for the poor. (This was far less the case outside the United States and Canada.)

In recent years - really decades at this point - a combination of dissatisfaction with the suburban lifestyle compared to the urban lifestyle and awareness of the destruction of the environment caused by car dependency (not to mention the impact our dependency on oil has on global politics) has resulted in a nascent “urbanist” movement and a transit renaissance, and members of my generation increasingly are shunning the suburban lifestyle their parents sought and clung to so fervently in favor of a return to the city (which some cities are reacting to better than others). Much of this movement has involved the advocation for and construction of new rail systems, be they streetcars, “light rail”, or heavy rail, but for the most part the very people that advocate for revived transit systems still tend to ignore or disdain buses (even the people running the transit agencies that run the buses), even though buses do much more of the (often unglamorous) heavy lifting of moving people across the city than the shiny new rail lines. (That “bus rapid transit” is often supported by people who just want to kill rail plans and don’t actually have a real BRT proposal doesn’t help, especially when much American BRT is barely any better than plain old buses and if you make them sufficiently better, you might as well put in rail.) Meanwhile, many people have suggested that any number of new technologies, be they electric cars, self-driving cars, even more “flexible” “demand-responsive” systems, or “personal rapid transit”, might help reduce our oil consumption or otherwise obviate the need for mass transit, but the ability to transport large numbers of people in a small amount of space is too valuable, especially in dense cities, for the need for transit to ever fully go away.

Some of the similarities to broadcast television should already be obvious. Like transit, for many years, decades even, broadcast TV was the norm – indeed the only form of television there was. Like buses, broadcast television has become increasingly neglected and dismissed as welfare for the poor as two different, more appealing visions, the multitude of channels made possible by cable and the freedom of scheduling made possible by the Internet, have become ascendant. Like buses, broadcast TV is doubly shunned both as a part of the larger category of mass transit/linear television and as a particular kind of linear television; like buses, broadcast TV is disdained even by the people who run it in favor of cable, despite being home to the most popular programming on television (even if cable as a whole is more popular), and like transit, linear television is subject to all sorts of dreamers like Reed Hastings or this guy who see it as wasteful and “inflexible” and think that technology can obviate the need for it and render it obsolete, ignoring its ability to serve large numbers of people in a minimum of space (in this case, spectrum or bandwidth). And like buses, broadcast linear television is ignored by the very people leading my generation’s societal movement against the dominant paradigm of the past, the “cord-cutting” movement against cable, who understate just how much of the unglamorous work of delivering video is done by linear television, and how much they are asking of the Internet. (Remind me to tell you about all the other times the Cordkillers podcast I linked to above has rooted for broadcast television to go away and have its spectrum reappropriated to deliver the Internet. And incidentally, the “back-to-the-city” movement stands to put a lot more people within range of TV stations.)

Broadcast television may be old technology, but mass transit is even older, and it’s still around because it does what it does better than anything else that has or possibly will come along. Linear television isn’t simply a technological stopgap until a better technology comes along; it has its own benefits, as AT&T and Verizon have recognized even as they drive existing broadcasters off the air, and one ignores those benefits, or what broadcasting will look like in the future, at their peril. Media companies may prefer a post-cable future where all video is consumed on the Internet for a variety of reasons, but Reed Hastings might want to be careful what he wishes for, or at least predicts, because if linear television completely goes away and all consumption of content moves to the Internet, the inevitable result will be that ISPs will have that much more incentive and ability to subject Netflix to interconnection blackmail and other violations of the spirit of net neutrality.

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

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.