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 Post subject: Re: MLB Faces Antitrust Suit Regarding Its TV Blackout Polic
PostPosted: Tue May 15, 2012 11:31 pm 
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RTJR wrote:
I had a discussion a few years ago about a la carte TV with a couple of guys in the business. The idea sounds good but the conclusion was that it would almost guarantee higher bills.

Maybe, for anybody who really wants every channel. I'd settle for the local stations and Root, with maybe a handful of others at most. Screw ESPN, I can always find a bar to watch the Steelers in if that's the only channel it's on.

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 Post subject: Re: MLB Faces Antitrust Suit Regarding Its TV Blackout Polic
PostPosted: Tue May 15, 2012 11:34 pm 
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RTJR wrote:
The conclusion was that since 99% of the channels would automatically lose homes, they'd have to charge more, severely cut costs, or simply go under.

Use Dish Network as an example. They charge $25 for a 55 channel package. If it were a la carte, instead of getting 55 channels at $0.45 per channel for a $25 bill, you could easily end up paying $40/ month for 20 channels at $2.00 per channel.

There was also something about advertising and how being associated with a certain package tier is helpful for advertising dollars. An extreme-niche channel like Fox Soccer would have a hell of a time making money in an a la carte system. They already charge $15/ month for their 2nd primarily-soccer-network, Fox Soccer Plus.

In the end, it results in:

- Higher bills
- Fewer channels
- Less diversity
- Less "risk taking" on niche networks

I'd be delighted to pay $2.00 per channel. I'd save a bundle.

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 Post subject: Re: MLB Faces Antitrust Suit Regarding Its TV Blackout Polic
PostPosted: Wed May 16, 2012 12:06 am 
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Let me ask a question that I don't know the answer to.

Wouldn't this be good for the Pirates?

If the RSN contracts across the league go down, but in general the subscription based services go up, won't that be a net win for small markets like Pittsburgh? I'm guessing the amount we would lose on the tv contract by no longer having Amishville, OH or Screwyercousin, WV included in ROOT's market would pale in comparison to the slice of pie we would get from all the additional fans of large market teams now paying to watch their teams through a subscription service.

Wouldn't this, in effect, be moving more towards fuller revenue sharing?

I don't really care if No. 9 has to pay more if it's better for the Pirates. In fact, I'd be more willing to pay $149 to watch a good Pirates team and only a good Pirates team than I am to pay $129 to watch all of MLB.


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 Post subject: Re: MLB Faces Antitrust Suit Regarding Its TV Blackout Polic
PostPosted: Wed May 16, 2012 1:03 am 
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sisyphus wrote:
I'd be delighted to pay $2.00 per channel. I'd save a bundle.


It's a very generous number. I imagine it would actually be significantly more, depending on how popular the channels are that you wish to have.


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 Post subject: Re: MLB Faces Antitrust Suit Regarding Its TV Blackout Polic
PostPosted: Wed May 16, 2012 1:40 am 
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RTJR wrote:
The conclusion was that since 99% of the channels would automatically lose homes, they'd have to charge more, severely cut costs, or simply go under.

Use Dish Network as an example. They charge $25 for a 55 channel package. If it were a la carte, instead of getting 55 channels at $0.45 per channel for a $25 bill, you could easily end up paying $40/ month for 20 channels at $2.00 per channel.

There was also something about advertising and how being associated with a certain package tier is helpful for advertising dollars. An extreme-niche channel like Fox Soccer would have a hell of a time making money in an a la carte system. They already charge $15/ month for their 2nd primarily-soccer-network, Fox Soccer Plus.

In the end, it results in:

- Higher bills
- Fewer channels
- Less diversity
- Less "risk taking" on niche networks


Hmm. Fair conclusion.

Of course, couldn't they (Service Providers):
-Do some sort of 'package deal' either similar to how HBO/STARZ/Showtime are packaged now, only include one for the ABC/NBC/FOX affiliates
-Include some sort of 'standard package' where $X covers the cost of the 'basic cable channels' (ABC/NBC/CBS/FOX/PBS) and then charge extra $1-2 for each additional channel?

For example, instead of offering $1 for each TNT and TBS, they could 'bundle them' for $1.50. Same thing for ABC/ESPN, NBC and their channels and FOX and theirs, etc.

It would be less 'ala carte' in the literal sense, but moreso than the current format.

Do you believe that such would still net the same results?

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 Post subject: Re: MLB Faces Antitrust Suit Regarding Its TV Blackout Polic
PostPosted: Wed May 16, 2012 1:58 am 
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I suppose there could be that sort of "umbrella packaging" of channels. Even still, I think the amount of channels received for the money paid wouldn't be in the customers' favor most of the time.

Networks (ABC, CBS, NBC, FOX, etc.) are free over the air, so we could assume we wouldn't be charged to receive them. Whether that would actually be the case in such a system, I have no idea.

Personally, I'd need to have all the movie channels, a lot of sports programming, and a few "cable" channels (AMC, Discovery, Science, History, etc.). I imagine getting all of these a la carte would cost quite a bit. Probably cheaper than the current monthly bill, but is it really worth paying like $100 a month for 30-40 channels when that much would get you probably 3x as many with the current system? Of course, it would cost way more in the current system to actually receive all of those channels...it's certainly an interesting topic of discussion.


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 Post subject: Re: MLB Faces Antitrust Suit Regarding Its TV Blackout Polic
PostPosted: Wed May 16, 2012 10:58 am 
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BBF wrote:
Let me ask a question that I don't know the answer to.

Wouldn't this be good for the Pirates?

If the RSN contracts across the league go down, but in general the subscription based services go up, won't that be a net win for small markets like Pittsburgh? I'm guessing the amount we would lose on the tv contract by no longer having Amishville, OH or Screwyercousin, WV included in ROOT's market would pale in comparison to the slice of pie we would get from all the additional fans of large market teams now paying to watch their teams through a subscription service.

Wouldn't this, in effect, be moving more towards fuller revenue sharing?

It might. At the very least, the teams with the extremely lucrative contracts with RSNs (i.e., LA, Chicago, Philadelphia, New York, Texas) would lose the most money because they wouldn't be able to make guarantees to the RSNs that they won't face competition from streaming video. However, one thing that might happen is that each team will seek the ability to broadcast their own games outside of MLB Advanced Media, thereby giving them the opportunity to reap the rewards specific to their team. Given the precedent set by the Supreme Court in the 1984 NCAA case, there's a good chance that might happen.

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 Post subject: Re: MLB Faces Antitrust Suit Regarding Its TV Blackout Polic
PostPosted: Wed May 16, 2012 7:06 pm 
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RTJR wrote:
sisyphus wrote:
I'd be delighted to pay $2.00 per channel. I'd save a bundle.


It's a very generous number. I imagine it would actually be significantly more, depending on how popular the channels are that you wish to have.

My guess is not very, outside of Root.

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 Post subject: Re: MLB Faces Antitrust Suit Regarding Its TV Blackout Polic
PostPosted: Wed May 16, 2012 9:24 pm 
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RTJR wrote:
I suppose there could be that sort of "umbrella packaging" of channels. Even still, I think the amount of channels received for the money paid wouldn't be in the customers' favor most of the time.

Networks (ABC, CBS, NBC, FOX, etc.) are free over the air, so we could assume we wouldn't be charged to receive them. Whether that would actually be the case in such a system, I have no idea.


Yes, it's certainlly tough to estimate costs/revenue/profits of such a system when we don't know how much each channel generates $ (via ads). Therefore it would be nearly impossible to predict which channels would cost what without knowing the specifics of the TV industry, or all hypotheticals would be wild, approximate at best, guesses.

RTJR wrote:
Personally, I'd need to have all the movie channels, a lot of sports programming, and a few "cable" channels (AMC, Discovery, Science, History, etc.). I imagine getting all of these a la carte would cost quite a bit. Probably cheaper than the current monthly bill, but is it really worth paying like $100 a month for 30-40 channels when that much would get you probably 3x as many with the current system? Of course, it would cost way more in the current system to actually receive all of those channels...it's certainly an interesting topic of discussion.


Then again, I do wonder if a pay by usage or pay by download system would be an alternative method...?

Having, say... 1,000 channels for $150 sounds likes a steal, except when one factors in that they're probably only watching 30-50 channels per month at best and probably not more than 2-3 hours a day at most. And that guess is for someone who would watch a large amount of TV.

Therefore an ala carte system would probably only cost more for a customers who didn't plan/organize their channels-for-pay effective/efficiently... which would probably be a majority of [American] TV watchers.

One last hurdle I would foresee is the duration, or 'contract', of purchasing a channel. Would $2/mo be the going rate, meaning the customer could switch/change which channels they watched at will, or would there be longer 3/6/9/12 month deals?

Without some sort of 'collective bargaining' or really savvy business practice changes it would be difficult to predict how such a change in TV contracts would work.

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 Post subject: Re: MLB Faces Antitrust Suit Regarding Its TV Blackout Polic
PostPosted: Wed May 16, 2012 10:36 pm 
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When I envision it, I picture it as an interface on the receiver. Basically, one would go through either a menu or sorts or channel-by-channel picking which they want to "unlock". Sort of like how PPV is done, but instead of unlocking a movie for 24 hours, you've unlocked a channel. Naturally, they'd have to have it where if you unlock a channel you're paying for it for a certain amount of time or else people would take advantage of that by just unlocking before their favorite shows and then locking them back up again.

I have no idea how plausible that is, but it seems like the most logical way to do it.

This leads me to something else: Would an a la carte channel system eventually lead to a la carte shows? Say there's only one show on BBC America that you like, would you pay just to unlock that show for it's full season (12-13 weeks for most)? Would people go from saying "I'm paying $150/month for 250 channels but only watch a couple dozen of them" to "I'm paying $100/month for 30 channels but I only really watch 10 shows"?


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 Post subject: Re: MLB Faces Antitrust Suit Regarding Its TV Blackout Polic
PostPosted: Wed May 16, 2012 11:14 pm 
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RTJR wrote:
This leads me to something else: Would an a la carte channel system eventually lead to a la carte shows? Say there's only one show on BBC America that you like, would you pay just to unlock that show for it's full season (12-13 weeks for most)? Would people go from saying "I'm paying $150/month for 250 channels but only watch a couple dozen of them" to "I'm paying $100/month for 30 channels but I only really watch 10 shows"?


Exactly.

Of course, paying $1/show (if that were the rate) would probably cost more than $1-2 a channel/month (if that were the system). Even $0.25 a show would probably add up to more than paying more than $1-2 a month for a channel, especially if multiple shows were on the same channel already.

Then again, having such a precise audience could lead to more precise advertising (by demographics)... unless, that is, downloaded shows were commercial free.

And the obvious drawback to a la carte shows is that it prevents 'lead ins' and 'piggy backing' audiences.

Once execs figured out the advertising angle though, I think any of the systems could work (be profitable). It's just a tough hurdle to clear.

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 Post subject: Re: MLB Faces Antitrust Suit Regarding Its TV Blackout Polic
PostPosted: Sat Jan 26, 2013 10:22 pm 
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For those of you who remember the discussion on this topic, an update: the case survived a motion to dismiss and is marching forward. We may seen an end to the blackout restrictions after all.:

From Dec. 5, 2012: http://sports.yahoo.com/news/lawsuit-ta ... 44096.html
From Jan. 22, 2013: http://www.fangraphs.com/blogs/index.ph ... he-courts/

The cynic in me expects the two sides to settle, but then I look at the American Needle suit against the NFL, which reached the Supreme Court in 2010 prior to the discovery phase and is nearing a trial date. So I'm hoping against hope that we get to see some of MLB's dirty laundry aired in public as a result of this suit, as well as a result that gets rid of the blackout restrictions for MLB.TV subscribers.

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 Post subject: Re: MLB Faces Antitrust Suit Regarding Its TV Blackout Polic
PostPosted: Sun Jan 27, 2013 11:57 am 
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The blackout rule is a farce and should be overturned. My dad lives 180 miles north of Pittsburgh but suffers from blackout rules for Pirate games. I mean really. They are losing potential cable revenue due to this blackout... 8-)


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 Post subject: Re: MLB Faces Antitrust Suit Regarding Its TV Blackout Polic
PostPosted: Sun Jan 27, 2013 2:37 pm 
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Willton wrote:
For those of you who remember the discussion on this topic, an update: the case survived a motion to dismiss and is marching forward. We may seen an end to the blackout restrictions after all.:

From Dec. 5, 2012: http://sports.yahoo.com/news/lawsuit-ta ... 44096.html
From Jan. 22, 2013: http://www.fangraphs.com/blogs/index.ph ... he-courts/

The cynic in me expects the two sides to settle, but then I look at the American Needle suit against the NFL, which reached the Supreme Court in 2010 prior to the discovery phase and is nearing a trial date. So I'm hoping against hope that we get to see some of MLB's dirty laundry aired in public as a result of this suit, as well as a result that gets rid of the blackout restrictions for MLB.TV subscribers.

If the blackout goes down, Comcast and other cable providers are going to be very, very unhappy.

The minute it becomes possible to do, I will be dumping cable entirely in favor of watching the Pirates and Penguins via internet streaming.

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 Post subject: Re: MLB Faces Antitrust Suit Regarding Its TV Blackout Polic
PostPosted: Sun Jan 27, 2013 2:38 pm 
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Az Bucco fan wrote:
The blackout rule is a farce and should be overturned. My dad lives 180 miles north of Pittsburgh but suffers from blackout rules for Pirate games. I mean really. They are losing potential cable revenue due to this blackout... 8-)

On the contrary, the day that people can stream games over the net for a reasonable price, the entire cable TV industry will be in big, big trouble.

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 Post subject: Re: MLB Faces Antitrust Suit Regarding Its TV Blackout Polic
PostPosted: Sun Jan 27, 2013 4:25 pm 
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But sadly, that would not be available to him either as he is 82 years old and will never own a computer.... :( :( :( I think all cable should be ala carte much like video dim sum...pay a basic price then add on only the channels or options that you want...I have direct tv and have for a long time. There are many channels that are part of certain packages that I never watch but there are other channels that I would like to see but don't have that package.... 8-)


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 Post subject: Re: MLB Faces Antitrust Suit Regarding Its TV Blackout Polic
PostPosted: Mon Jan 28, 2013 2:24 pm 
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I find this topic to be incredibly interesting and, if I were independently wealthy, I'd love to study it in great detail and write an lenghty article on it.

I have told friends for some time that I fear that NCAA football is heading towards being much like MLB. You will have the incredibly wealthy "haves" (Big 10 schools, Big 12 schools, SEC, Pac 12) and then you will have the rest (MAC, Conf USA, WAC, Mountain West, etc). The recent conference shuffling has nothing to to do with whether a particular program is first rate and everything to do about the revenue that would be generated in that school's home market. Why else would the Pac 10 be more interested in Colorado than Oklahoma? Bottom line, the Denver market is far more valuable than the Norman/Okie City market.


The Big 10 network charges $.50/month per subscribing household ($6/yr). One need only look at the number of potential TV households in the NJ, DC, Philly, NYC, Virginia area to realize why the Big 10 added Rutgers and Maryland to the Big 10. If the Big 10 Network is added to even 70% of the TV households in those areas, the additional TV revenue to the Big 10 will be astronomical.

One of my biggest "fears" about the blatant money grab is that I live in what I consider to be a "taker" state under the current Big 10 equal revenue sharing agreement. If you look at the revenues generated by the Big 10 Network and divide by 12 teams, you will see that schools like Iowa, Nebraska, Northwestern, Purdue and Michigan State are likely "feeding at the trough" of the high population, high popularity schools like Penn State, Ohio State, Michigan, Illinois, Wisconsin and Minnesota. Once you factor in the "loss of tradition and history" that, IMO, accompanies adding teams like Penn State, Nebraska, Rutgers and Maryland and focus solely on the $$$, isn't it reasonable to anticipate that - at some point - the high revenue colleges will say "why do we need Iowa, Nebraska, Purdue, Northwestern and Michigan State? The Big 10 Network will still have Chicago (Illinois), Detroit (Michigan) adn Indianapolis (Indiana) and we can split revenue 10 ways insteaad of 14.

I fear that my beloved Hawkeyes, due primarily to the population of Iowa, will lose its Big 10 affiliation and end up aligning with schools like Nebraska, Kansas, Kansas State, Iowa State, etc. and become nothing more than "MAC schools" as far as revenue production is concerned. I also fear that, in that situation, the Hawkeyes will be the NCAA equivalent of a low revenue producing MLB . . . like the Pirates. Don't believe me? Ask IA Pirate about the rumored demise of the Big 12 last year, where ISU was headed and why the low population/low revenue schools were fine with Texas taking a disproportionate share of the TV income.

If you read the Supreme Court's NCAA case in which television access is discussed, there is quite a bit of discussion regarding competitive balance and the impact of TV money on the competitive balance. If my memory was correct, the NCAA argued that it wanted to restrict how many times a particular school could be on national TV because it would create an unfair advantage for that school. Again, my memory could be fuzzy, but I seem to recall that the Supreme Court held that the NCAA was fully within its rights to adopt policies and rules that promoted competitve balance but rejected the notion that additional TV exposure would adversely affect that balance. The topic deserves much more nuanced analysis than I can bring in a single post here but . . . I think that it is certainly fair to state that the current TV revenues have markedly impacted competitve balance across the college football landscape. We are close - indeed, very close - to four superconferences and any school that is not in that superconference will always be on the outside looking in.

It will be interesting to see how the MLB case plays out. Getting past a Rule 12(b)(6) motion to dismiss is not particularly challenging for a plaintiff. The NCAA case involved a challenge by a member school (I think that it was Oklahoma) to the rules restricting broadcast coverage. I believe that the Court held that, absent reasons relating to competitive balance, the NCAA could not restrict Oklahoma's TV exposure. Here, the individual teams are not complaining about TV exposure, the plaintiffs are consumers who don't want to purchase cable TV or satellite TV; they want to watch their favorite team on the internet. MLB has the black out restrictions in place so that its franchises can enter into exclusive TV contracts with broadcast partners which arguably (1) maximize revenue for the individual club and (2) allow a network to generate better advertising dollars due to the exclusivity of the broadcast. Interesting to me will be where those who claim that the economic inequality of baseball decreases competitiveness align on the argument versus those who claim that economic inequality hasn't negatively impacted competitiveness will align.

Its a fascinating topic to me . . . however, maintain that the consuming public will be on a strictly pay-per-view basis in less than 10 years.

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