The Game to Show the Games

An Open Letter to Steve Ballmer

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A while back I heard that you had rejected a $60 million dollar offer from Fox Sports to renew their contract to show Clippers games and were considering setting up your own streaming service.

I can’t say I’m terribly surprised. You leaped pretty much directly from being the CEO of Microsoft to owning the Clippers. At Microsoft, you’ve been immersed in the pace of technological change and the increasing role computers have played in our lives for virtually the company’s entire ascent; once in charge, you saw a path for Microsoft to remain relevant in a tablet world, a path that gave Microsoft its biggest OS embarrassment this side of Vista (also released during your tenure) in the short term but which Apple recently affirmed the wisdom of. You already dipped your toe in the streaming-video revolution with the XBox. You see the direction technology is going and the revolution that is already upending the cable industry and the business model Fox’s RSNs run on, and you want to blaze a trail with a new business model in a territory you’re more familiar with than any other owner of a professional sports team not named Paul Allen. You want to set the course for the professional sports team business model of the future that teams around the country hope to follow. So what’s the best business model to go with?

Let’s say you decide to put up a paywall and offer Clippers games as a subscription service. A source quoted in the New York Post thinks you could make up for the money lost by not taking the Fox deal by selling subscriptions for $12 a month to 500,000 homes. Without even looking I’m pretty confident in saying the average audience for Clippers games on Prime Ticket isn’t even a third of that as it is. So let’s assume that, regardless of price, the most households you can get to subscribe to a service that’s offering just Clippers games is 150,000. To make up the $60 million Fox is offering, you’d need to charge $400 a season. Even at $35 a month, that’s going to cut off a substantial number of households that can’t afford that much, forcing you to increase the price higher, forcing more homes out of the service, and so on. That’s before production costs Fox would have covered as well as the costs of hosting the games on your server and sending it out to customers.

Okay, so you don’t care about how profitable the deal is in the short term; you’re getting out in front on a business model that’s more sustainable than what Fox has and you want to control it all yourself. So long as it’s profitable or even takes a loss in the short term, you’re building a streaming infrastructure you can sell out to other teams and taking in all the advertising money instead of letting Fox take it. But even with all that, there’s another, deeper problem. LA is a frontrunning town to begin with, and despite your recent success and the Lakers’ recent floundering, you’re still very much the team in LA, with even record low Lakers ratings not being enough to fall behind the Clippers. The Clippers aren’t even like most other places with two teams in the same sport (including LA’s baseball and hockey teams) in that they don’t draw from any particular geographic area; no one, I suspect, is truly a diehard Clippers fan, they just follow the Clippers because they can’t bring themselves to root for the Lakers. (In other words, most of your fans are probably Bill Simmons-types, in that they’re expatriates from other places who hate the Lakers too much to shift their allegiance to them but still want to see basketball games regularly as long as they’re in LA.) Donald Sterling’s decades of incompetence isn’t going to be washed away overnight; as successful as the Clippers have been in the last few years of Sterling’s tenure and the start of yours, it’s going to take many, many years, maybe generations, to build a fanbase that’ll follow your team through thick and thin, and that assumes nothing goes wrong in the meantime, that the Clippers will remain as successful and attractive as it is today. Your reign has already shown signs of mismanagement of its own, even if not at Sterling levels; what happens if Jimmy Buss gets forced out somehow, either relinquishing control of the Lakers to the more competent Jeanie or outright selling the team?

You’re counting on the team being and remaining attractive enough that people will pay up to see your team’s games that aren’t on national television. If the team starts to fall back to earth, people will cancel their subscriptions and you’ll have less revenue, and it’ll be that much harder to get back to where you were before. To those people, your team will become all but invisible, even further out of the LA sports conversation than under Sterling, and it’ll be that much harder to get those people back if the team does get good again. That’s before even considering all the fans you’d be pricing out of the market to begin with, or the casual fans who won’t elect to pay you for games they might not watch that much of and whom it’ll be that much more difficult to turn into hardcore fans who will pay.

Okay, so let’s say you go in the complete opposite direction and offer Clippers games to everyone in your television territory for free. You could even go one step further and offer Clippers games to everyone period for free, and try to build the team up as “America’s Team”, but the NBA is likely to frown on that; you’d be undercutting the NBA League Pass package and the RSN deals of all your opponents. So let’s just restrict it to your TV territory for now.

According to the Los Angeles Times, last season Clippers games averaged a 1.04 rating on Prime Ticket, a decline from either 1.25 or 1.27 the previous season. That means 1.04% of all television households were watching a Clippers game at any given time over the course of the season. That may not sound like much, but during the 2014-15 season the Los Angeles market boasted 5.5 million households with television. 1.04% of that number is a little under 58,000. Since you’re offering games for free to people who may have cut the cord, we can assume the number could climb a little higher; 1.25-1.27% would bring the number to around 70,000, but for particularly attractive games the number could top 100,000. Are you ready to provide the infrastructure required to deliver Clippers games to 100,000 devices at once, without buffering, lag, or other problems, especially as audiences demand better picture quality through technologies such as 4K? Can you handle the even larger audiences that would come with an “America’s Team” strategy?

This is why the prospect of streaming disrupting the live-event market in the way it’s disrupted the market for on-demand shows has always been overblown. The true reason sports has become so important to the linear television industry is that it’s the one place where linear television’s strengths shine – its ability to scale to deliver content to many people at once. That doesn’t mean you aren’t smart for blowing off Fox – they can only pay you $60 million because they charge hefty subscription fees to every household in the LA area that subscribes to cable, and if only 70-100,000 of them watch Clippers games (and it’s not like the Kings, Ducks, and high-school and lower-tier college sports are that much more popular), the rest of them aren’t going to take it much longer, and it won’t be long before that $60 million rights fee evaporates. Does that leave you completely trapped? Is there a way forward towards pioneering a new sports-rights paradigm for the twenty-first century suited for the challenges inherent in it?

Yes, and it’s a decidedly retro one: sign a contract with a group of broadcast stations.

Due to its size and relative isolation, Los Angeles has pretty much the most broadcast television stations in the country, even if a good number of them are foreign-language and other multicultural stations. Leaving aside the Big Four affiliates, KTLA, KCAL, KCOP, and KDOC are all general entertainment stations with histories with sports, and the first three have all aired Clippers games at various times in the past. As has always been the case all over the country when broadcast stations have aired local sports, they never aired more than a small smattering of Clippers games, which opened the door for regional sports networks to take the rest and, in most cases (including the Clippers), ultimately take them all. For this strategy, which is also a strategy for the very survival of broadcast television itself, that’s going to have to change.

The key is that, in the long term, this strategy is really a modification of the offer-games-for-free strategy, except it’s moving the delivery mechanism to one that’s better suited to the task, one that can better handle large audiences tuning in for at least the highest-demand games, and one that requires considerably less expenditure on infrastructure to start. You’re still producing the games yourself and controlling their distribution and advertising revenue; you’re simply syndicating the games to broadcast stations within your TV footprint as a means to manage demand while maximizing exposure, giving stations control of a small percentage of advertising in the process to target their specific markets. Selling advertising on the traditional linear television model may give you the chance to increase ad rates compared to the usual online model of serving up custom ads based on users’ personal information, a model there’s a lot of resistance to.

The amount broadcast stations can pay you will probably still be inflated by the cable bundle as stations hope to use Clippers games to maximize retransmission consent revenue, but if there’s no major change in the regulatory environment in the near term and cable operators continue to try to prop up their subscriber numbers with “skinny bundles”, that market may remain intact for longer than you think, or at least longer than the RSN market will. Moreover, in the long term linear television of all stripes, broadcast and cable, will be as much a demand-management mechanism for broadband providers as anything else. A typical optical node on a cable operator’s network, which serves as the last relay point before reaching individual households, serves 500-2000 homes, according to Wikipedia; even on the low end of that scale, if 1.04% of those homes are trying to watch a Clippers game that amounts to at least five households, which may not sound like much but which means serving them all with a single linear television stream could reduce the bandwidth demands to a fifth of what they would be otherwise. With continued technological development, especially the advent of ATSC 3.0 which should be finalized by this time next year, you should be able to reach a wide variety of devices with a bare minimum of need for the Internet to deliver video, including being able to reach mobile devices without needing to use viewers’ data plans or going through wireless carriers, something a cable network or streaming service can’t do. People could use any Internet-capable device, including what we call a television today, to watch the game directly from the broadcast signal (or a relay thereof sent over Wi-Fi) while going through the Clippers’ web site.

Of course, all this assumes the broadcast stations in question are even interested. KCOP is owned by Fox, the very same entity whose $60 million offer you rebuffed, and they are not going to take part in undermining their RSN hegemony and substantial investment in cable networks – unless you convince them that that hegemony and those cable networks are going to crumble anyway and at least this allows them to get a piece of your streaming plan and salvage something from the ashes. CBS, which owns KCAL, might be more receptive but has enough cable dreams and investment in retransmission consent of their own to be hesitant. KTLA might have a different problem – the prospect of regularly pre-empting CW network shows – and would only really be an option to the degree we’d like if the CW shuts down or Tribune no longer takes part in it, and KDOC is the smallest of the four stations we’re considering, and might well put up its spectrum for bid in next year’s incentive auction. But that just underscores the importance and impact what you do could have on two industries – and the urgency of it. We already know anything other than the traditional RSN model will help set the tone for the local sports media landscape of the future. But signing up with a group of broadcast stations won’t just establish an infrastructure that might be, technically, the best one available, one with direct and indirect benefits to numerous parties. By pointing the way forward to an era of increased importance and relevance, it might just save the broadcast television industry from itself.

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

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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.

Ensuring a #CommActUpdate for the Twenty-First Century

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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.

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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.

The Hunt for Your Favorite Team’s Games

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If you were a fan of the Oregon Ducks, the team in the country, and you wanted to catch all your team’s games, you would have had to watch them on all of these channels:

  • South Dakota: Pac-12 Networks
  • Michigan State: Fox
  • Wyoming: Pac-12 Networks
  • @Washington State: ESPN
  • Arizona: ESPN
  • @UCLA: Fox
  • Washington: Fox Sports 1
  • California (from Levi’s Stadium): Fox Sports 1
  • Stanford: Fox
  • @Utah: ESPN
  • Colorado: Pac-12 Networks
  • @Oregon State: ABC
  • Arizona (Pac-12 Championship from Levi’s Stadium): Fox

If you were a fan of the USC Trojans, you would have spent time on all of these channels:

  • Fresno State: Fox
  • @Stanford: ABC
  • @Boston College: ESPN
  • Oregon State: ESPN
  • Arizona State: Fox
  • @Arizona: ESPN2
  • Colorado: Pac-12 Networks
  • @Utah: Fox Sports 1
  • @Washington State: Pac-12 Networks
  • California: ESPN
  • @UCLA: ABC
  • Notre Dame: Fox

If you were a fan of the TCU Horned Frogs, you would have been watching these channels:

  • Samford: Fox Sports Southwest (or if not them, SportSouth, a handful of Plus feeds, or FCS Central)
  • Minnesota: Fox Sports 1
  • @SMU: CBS Sports Network
  • Oklahoma: Fox
  • @Baylor: ABC (or ESPN2)
  • Oklahoma State: Fox Sports 1
  • Texas Tech: Fox
  • @West Virginia: ABC (or ESPN2)
  • Kansas State: Fox
  • @Kansas: Fox Sports 1
  • @Texas: Fox Sports 1
  • Iowa State: ABC

If you were a fan of the Texas Longhorns, you would have been watching these channels:

  • North Texas: Longhorn Network
  • BYU: Fox Sports 1
  • UCLA (from JerryWorld): Fox
  • @Kansas: Fox Sports 1
  • Baylor: ABC (or ESPN3)
  • Oklahoma (from Fair Park): ABC
  • Iowa State: Longhorn Network
  • @Kansas State: ESPN
  • @Texas Tech: Fox Sports 1
  • West Virginia: Fox Sports 1
  • @Oklahoma State: Fox
  • TCU: Fox Sports 1

This isn’t limited to the Pac-12 and Big 12, two conferences whose rights are split between two different companies. The best teams tend to be plastered all over their conferences’ biggest channels, but if you were a fan of the Florida Gators, you would have been watching these channels:

  • Idaho: ESPNU
  • Eastern Michigan: SEC Network
  • Kentucky: SEC Network
  • @Alabama: CBS
  • @Tennessee: SEC Network
  • LSU: SEC Network
  • Missouri: ESPN2
  • Georgia (from Jacksonville): CBS
  • @Vanderbilt: SEC Network
  • South Carolina: SEC Network
  • Eastern Kentucky: SEC Network alternate feed
  • @Florida State: ESPN

If you were a fan of the Wisconsin Badgers you would have been watching these channels:

  • LSU (from Houston): ESPN
  • Western Illinois: BTN
  • Bowling Green: ESPN2
  • South Florida: ESPNU
  • @Northwestern: ESPN2
  • Illinois: ESPN2
  • Maryland: BTN
  • @Rutgers: ESPN
  • @Purdue: ESPNU
  • Nebraska: ABC
  • @Iowa: ABC (or ESPN2)
  • Minnesota: BTN
  • Ohio State (Big Ten Championship from Indianapolis): Fox

And if you were a fan of the Miami Hurricanes you would have been watching these channels:

  • @Louisville: ESPN
  • Florida A&M: ESPN3
  • Arkansas State: ESPNU
  • @Nebraska: ESPN2
  • Duke: ESPN2
  • @Georgia Tech: ESPN2
  • Cincinnati: Fox Sports Florida (or if not them, one of a handful of other RSNs or ESPN3)
  • @Virginia Tech: ESPN
  • North Carolina: ACC Network (CBS4 in Miami (incidentially pre-empting Air Force-Army and potentially encroaching on Georgia-Florida), ESPN3 if no station in your area)
  • Florida State: ABC
  • @Virginia: ESPN2
  • Pittsburgh: ESPN2

Every one of these schools has their games spread across at least five different networks. As mentioned, the better teams in the conferences with fewer partners have it better; Oregon and TCU had exactly five networks each (as would have Alabama had I included them), Florida State had all but one of their games on ABC or ESPN, and Ohio State had ten straight games on either ABC or BTN, but if you’re not one of those top teams following your team is an exercise in hunting down what network has your team’s game this week. And I haven’t included any teams outside the power 5 because you’re less likely to be following them on TV, but rest assured it isn’t because they don’t have to go through this; if anything they may have it worse. To follow all of Boise State’s games, you would have had to watch ESPN, ESPN2, ABC (or ESPN2), CBS Sports Network, ESPNU, and for the Mountain West Championship, CBS. Lesser Mountain West teams would likely have needed to find where their game was streaming on the “Mountain West Network” at least once; Conference USA teams, including Marshall, had to hopscotch between Fox Sports 1, CBS Sports Network, FSN, Fox College Sports, and whatever station was airing the American Sports Network game(s), with ESPN swooping in for the conference championship game, all just for conference games; the MAC and Sun Belt faced the prospect of watching most of their games on ESPN3; and all the Group of Five conferences except Conference USA faced the prospect of at least some games on ESPN3 or ESPNEWS.

I mentioned last week that the oversaturation of the cable network market is made apparent when cable networks play format musical chairs in a desperate attempt to attract an audience, but don’t think the relative health and lavishing of attention and money on the sports network market doesn’t mean it’s not immune to this problem. There is ultimately a very short list of sports and sports events that will attract substantial audiences to a network. College sports is much more decentralized than professional sports, allowing all the general-purpose sports networks (except NBCSN) to make a serious effort to grab a piece of the rights to whatever college conferences are popular enough to draw audiences. Whatever conferences’ rights they can’t get, they lure their most popular schools to play road games against schools in conferences whose rights they do have. That may be good for the chances of getting strong nonconference games (ESPN’s dominion over college football has resulted in them arranging attractive non-conference matchups for the purpose of their own ratings, but power-conference teams have also taken road trips to C-USA schools they wouldn’t otherwise visit so FS1 can have them, or to schools in conferences CBS Sports Network has the rights to), but it means fans often find themselves jumping from network to network to find the one that has their school’s game this week, lured to networks desperate for their eyeballs – before we even get to conference-owned networks or, in the case of the ACC, Big 12, and non-power five schools, the multiple platforms for games that would otherwise air on a conference network.

The relative centralization of pro sports, where each league rarely has more than one or two rights partners, means this is less of a problem there, but that’s not to say it doesn’t exist. The situation in the NFL, with two networks airing most of the games of each of the two conferences with some of them getting siphoned off to NBC, ESPN, and CBS/NFLN, is fairly simple, just in terms of why certain games are on certain networks based on their time slots, and in the other major sports most of your team’s games will air on their respective regional sports network, with a few occasions when you have to switch to the national partner, which is an event marking you as a good team and can be fairly easily predicted by what day it falls on. (The NHL has NBC and NBCSN; the NBA has ABC, ESPN and TNT. MLB is the least simple; it’s okay in the regular season with Fox, ESPN and Fox Sports 1, but then TBS and MLBN join in during the postseason under a scheme that doesn’t quite make sense because of baseball bungling their last contract negotiations.) In college football, only the worst, least-attractive teams can count on appearing on the conference network or other regional partner on a regular basis; for the others, not being on national television is the exception and not the rule, and unlike with the NFL, that means switching between several different partners seemingly at random with no correlation with time slot (as if it wasn’t bad enough the time slots themselves are only being determined two weeks in advance), for reasons that only make sense if you pay close attention to how the meat of the college football schedule is made, and doesn’t always make sense even then.

Could this problem get worse in the future? It depends, for example on whether or not the cable bubble starts to burst or how future contract negotiations play out with FS1, NBCSN, or CBS Sports Network becoming bigger players, or whether or not entities recognize the potential for confusion from switching back and forth between networks. But with the Big Ten set to rack in a big payday from being the last big contract up for bid for several years, I hope their fans know what they’re getting into. If ESPN and Fox share the rights, as I expect and sort of hope, this is what you have to look forward to.

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

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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

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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.

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Quote of the Day:

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It really begs the question about, how are we going to get our sports in the years ahead? If technology changes in the next five years as much as it’s changed in the last five years, we’re not going to be getting our sports by cable TV. I don’t know what it’ll be. But increasingly, we’re using mobile devices … Google Network and Apple TV and things like that are coming into play. … I’m not sure the world needs another exclusive college cable network. Rather than trying to do what everybody else has done, I would much rather try to figure out what tomorrow’s technology is and get on the front side of that and be a part of what happens going forward and monetize that.

-Big 12 commissioner Bob Bowlsby, at the Oklahoma Sports Hall of Fame’s Leadership Luncheon, asked about how the Longhorn Network affects his long-term TV plans (read: how it keeps him from starting a conference network).

It’s hard to say whether or not he’s just saying this to try to save the appearance of being behind the eight ball because he can’t get on the conference cable network gravy train the way the SEC, Big Ten, and Pac-12 have. It’s also hard to say what trying to “get on the front side of tomorrow’s technology” would entail, certainly beyond what’s already covered by the conference’s contracts with ESPN and Fox (color me skeptical that it would involve “Google Network” or Apple TV in any significant way). But just the fact he knows enough about these things to make these points is very encouraging. Of course, if “tomorrow’s technology” is what I think (or at least hope) it is, I’d say the ACC is further ahead than the Big 12, which seems to have gone backwards on that front.

Against the Tyranny of Nielsen

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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.

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

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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.