Packers – Cowboys: Only the Fans Lose
Thursday, November 29th, 2007Well, tonight is the big game. Two teams who seem to be heading towards an imminent playoff match for the NFC Championship will meet tonight in Dallas.
Only problem is that the vast majority of fans of NFL football will not get to see it.
The reason we fans won’t be able to see the game is because the NFL Network, who is broadcasting the game, and several cable companies (mine is Time Warner, so I’ll use them) can’t decide how much more they want for carrying this channel. According to the NFL Network, here is what is happening:
FACT: It costs only 2 cents per subscriber a day for cable companies to offer NFL Network, yet they want to charge you up to $10 per month for the right to watch NFL Network.
FACT: Although more than 222 million Americans watched NFL football last year, the cable companies argue that NFL Network’s audience is too small to justify a spot in the basic lineup. Yet they manage to offer less popular sports channels they own, like Versus and the Golf Channel, on basic cable.
FACT: Cable has a double standard when it comes to sports channels. Channels they own, like Versus and the Golf Channel are included in the basic lineup. Independent channels like NFL Network get left out in the cold. This is unfair and anti-consumer. Consumer interest should decide what channels get carried – not inside deals among cable companies.
Here is Time Warner’s side of the argument:
Q4. How much is the NFL asking Time Warner Cable to pay for the Network?
A4. This is about price AND value. And the NFL needs to get real. The asking price for this network is not in line with the content it plans to deliver. NFLN is still evolving – its viewership is too small to even be rated. So we don’t really know how many people are watching it nationally.
We cannot get into negotiation specifics. But they are asking for a greater per-subscriber fee than today’s top rated networks. We won’t pay superstar prices for an untested rookie.
Sure, hardcore NFL fans love NFLN. But its programming is limited to only 8 games out of 238 available in the 2006 regular season and other shows targeted specifically to a limited audience. Because of the nature of its targeted programming and its price it belongs as part of a sports package where only those interested need to pay.
Well, after reading all of this, I have come to some conclusions regarding this whole situation:
- Both sides are being pig-headed in an attempt to be seen by the public as fighting to keep their cable costs down.
- Time Warner is being just as greedy as the NFL on this one. TWC wants to charge each subscriber $10 a month extra to carry an entire tier of programming just so they can watch the NFL Network, which only costs TWC $0.60 a month per subscriber to carry. The NFL wants that $0.60 per subscriber from the entire customer base, not just the the subscribers to the Sports Tier.
- Both sides seem to be a bit disingenuous when representing the other side in their ads. TWC keeps telling people that the NFL Network is a “niche” network and no one knows how many people will watch it. We all know that football passed baseball several years ago as the national pastime; many millions will watch the NFL Network during the season. However, there is a real question as to how many of those 222 million people cited by the NFL will watch the NFL Network during the off-season, when no new games will be shown.
No matter how this situation is resolved, the after-effects will be similar to the after-effects of a strike by the players. I know that I won’t forget the fact that their “negotiations” prevented me from seeing my favorite team play in the biggest game so far this season. I’ll also have to take a look at the cable bill the next time it comes in the mail and determine if I am really getting my money’s worth or not. I mean, its great to have all of those channels, but do I really need 20 different HBO, Showtime, and Starz channels? It might be a good idea to check out the satellite companies and see if my wife and I could be happy with a much lower bill and a lot less filler channels.
In the meantime, I guess I have to watch a DVD or surf the Internet tonight, instead of supporting my favorite team as they remind Bret Favre that it is time to retire.
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November 29th, 2007 at 9:08 pm
I think I’m on the Cable Companies’ side on this one. While I would certainly love to have NFLN included in the basic package, the only trump card the NFL has is to pull games onto the network that would otherwise be shown either on OTA broadcasts or ESPN (which is in the basic cable package) – and that is, really, the only reason most of us 222,000,000 million fans would watch NFLN.
I don’t watch most pre-game or other analysis shows; I just watch the games. That means I would watch, at most, three hours a week of NFLN – and that, only during the football season.
I’d pay for a sports tier – and add it during NFL season, and probably drop it the rest of the year.
As for the numbers, it is estimated that the famous 70/70 cable penetration has been met – that is, 70% of households have cable access, and of those, 70% subscribe. So, of 400MM Americans, figure 100MM households. That’s 70MM with cable access, and 49MM households subscribed.
The NFL wants $0.02/day per subscriber – about 1MM/day or about 350MM/year (based on these estimates).
Could the cable companies afford it? Probably. But with the cable companies in such competition with the satellite providers, that $0.02/day/subscriber could be a huge difference on the margins – and, in the end, it’s not that great of a bargaining chip for the cable companies trying to attract new customers.
December 6th, 2007 at 7:35 pm
The real issue here is that the NFL network is in it’s infancy. It’s ratings and audience numbers not yet determined. TWC is not going move forward with it until they know it will not lose them money. During the off-season I doubt they will be able to support it as the advertising revenue will probably not be what it will be when there are games to show, especially playoff games. And the NFL season is only 6 months long, including preseason and playoffs. Those other six months… That is a long time with nothing going on.
You want to lower your cable bill? Dump all of those expensive movie channels. For years I have had just the Basic plus Standard package from TWC. That’s it. No movie channels. As for movies, I just wait for the DVD’s to come out a few months later after they have had their run in the movie theaters. Then If I want I buy it. That way I am only paying for the movies I want to watch.