Monday, December 18, 2006

I Want My NFL

The Journal Sentinel had an article late last week on the growing controversy between the NFL Network and cable companies.

The article was written in the context of this Thursday’s Packers-Vikings game, which will air on the NFL Network. The issue is that most cable providers – including the two Wisconsin heavyweights Time Warner and Charter Communications – don’t offer the NFL Network as part of their cable package.

Thus, as it stands now, cable and over-the-air viewers in places like Madison and Eau Claire will not see the game. To understand the importance of this, a person only needs to visit the UW-Eau Claire campus this week.

If it’s anything like it was when I was there, the game is going to be the hot topic of conversation heading into Thursday night. I recall after one Vikings victory over the heavily favored Packers – I think it was on a Monday night – a congregation of Vikings fans assembled outside the two Towers dorms to celebrate and taunt the Packers fans.

Needless to say, while all Packers games are big deal in Wisconsin – even when they’re losing – the Packers-Vikings games are a huge deal to many people in the state.

And to toss even more fuel on the flames, this Thursday could very well be Brett Favre's last game at Lambeau (and, not surprisingly, that's exactly how the NFL Network is shrewdly marketing it). I can imagine what foam finger will be displayed by the Packers fans who miss that.

Those of us in the Green Bay and Milwaukee viewing networks – even viewers without cable or satellite, like myself – will see the game because we’re in what’s considered the Packers home market, so our local channels will pick up a feed of the game.

But, still, a good portion of the state is going to miss it.

So what’s the hang up? Well, to put it bluntly, it's cash.

The NFL decided to start featuring select games on its newly formed channel because otherwise only the most die-hard fans would care to tune in if it was just non-stop commentary with a smattering of semi-interesting coverage like the NFL combines and the second day of the NFL draft (I'm using "semi-interesting" loosely).

As for the cable companies, they don’t want to put the NFL Network in the standard line-up – which is what the NFL wants them to do – because they figure they can make more money selling it as part of a premium sports package, thereby forcing people to pay not only for the NFL Network -- which would be the big draw for most -- but also for all of the other sports channels that they many not care to see (and, hence, wouldn't sell very well otherwise).

While it ticks me off that the NFL started this mess by pulling games out of the regular schedule and putting them on its own network (instead of just putting them on an existing cable channel like ESPN or, better yet, one of the existing network channels and simply skimming a portion of the profits from there), I can’t help but side with the NFL now that the controversy exists.

Most of this feeling is driven by the B.S. line from the cable companies that their decision not to put the NFL Network in the standard line-up is about consumer choice. Consumers want to be able to choose if they see the NFL Network, the argument goes, therefore, it should be a part of a premium package – like HBO and Showtime – not the standard cable package.

Putting aside the hilarity of the cable providers claiming they care at all about consumer choice when they are the only show in town for cable in their respective territories, the argument that they make for keeping the NFL Network out of the standard line-up could be made for keeping out every channel that currently exists in that standard line-up.

After all, there isn’t a single channel in the current standard line-up that 100 percent of the cable viewers – or even close to that figure – want to see on a regular or even semi-regular basis. Take C-Span, for instance. I’m about as hooked on politics as anyone; however, I can hardly stand more than 2 to 3 minutes of most programming that comes on C-Span. Who can? Yet, there it is in the standard line-up, and every cable customer is paying for it to be there.

According to the JS article cited above, the cost of getting the NFL Network on the standard cable line-up would be $0.70 (per month, I think, but the article isn't clear on that) for each cable customer (that’s assuming no existing channel would be dropped with its addition). And it’s very true that a portion of people paying that 70 cents wouldn’t care to see the NFL Network at all. But, again, the same could be said for every channel that makes up the standard line-up.

So what makes the NFL Network worthy of inclusion in the standard line-up? The easy answer to that is ratings. Every week during the football season, the primetime NFL games consistently rank near or at the top of the Nielsen ratings for both cable and broadcast rankings.

A couple of weeks ago, for instance, the NBC Sunday Night Football game between Denver and Seattle ranked second in the Nielsen broadcast rankings behind only "CSI." And the ESPN Monday Night Football game between Carolina and Philadelphia ranked first in the Nielsen cable rankings with twice the number of viewers as the second rated show “The Closer.”

Now, the argument could be made that, aside from game time, the NFL Network is not likely to be much of a draw for most viewers. And since the NFL season only takes place during a relatively small portion of the calendar year, does it really make sense to include it in the standard line-up?

While all that is true, the answer must be that it makes at least as much sense as including C-Span 2 and The Golf Channel in the year-round standard line-up.

I mean, really, the legislative process and the PGA Tour can be interesting and all, but can they honestly hold an audience like even the lowliest of NFL games?


Anonymous Anonymous said...

There's no clear favorite here; it's a legalized monopoly fighting with a legalized ogliopoly, and the last guy anyone cares about is the actual *consumer.*

But I think your analysis misses one key point: The relative value of an NFL network. You say that the NFL Network is no different from CSPAN or The Golf Channel, or any of the other myriad highly targeted, topic-specific cable channels we commonly get.

And you're right.

But those channels are going for far, far less than 70 cents per subscriber. Those channels go for mere pennies, or even are thrown in free by content providers as deal sweeteners -- I'd bet ESPN Classic gets thrown in for dirt cheap as part of a more expensive deal to carry ESPN and the Duece. Hell, I wouldn't be surprised if a provider actually PAYS a cable company to carry a new startup channel as a loss-leader.

My point is this: Big Cable is perfectly willing to carry something with limited appeal, as long as that limited appeal is reflected in the price. But the NFL Network wants 70 cents a month. That's a price that would put it among the most expensive channels on cable, a price usually reserved for broadly appealling channels -- Fox News, CNN, ESPN.

The figures just don't make sense for Big Cable, and as much as I hate missing NFL games, for the time being, I'm glad the cable companies are holding out.

December 18, 2006  
Blogger Dave Diamond said...

Gregg Easterbrook, Brookings scholar and columnist, has been writing about this for quite a while. The point he hammers home is that the NFL has gotten cocky and is in danger of going the way of the NBA. A group of owners is trying to milk their antitrust exemption for every penny its worth, through DirecTV's Sunday Ticket monopoly and by trying to steal ESPN's NFL coverage for the NFL Network.

I highly recommend Easterbrook's column; not only is he up on the current state of NFL business, but he understands NFL strategy like no one else.

December 18, 2006  
Blogger Seth Zlotocha said...


I see your point about the price, and it's something that did cross my mind when typing the post. But I still see Big Cable as the one standing in the way on this.

After all, the ad revenue that the cable companies would get through the NFL Network (particularly during game time) would off-set much (if not all) of the cost for providing the network -- and that ad revenue far outpaces what Big Cable can get from The Golf Channel and many of its other stations.

But what Big Cable wants is the cash for the programming and the cash from the ad revenue.

In the end, it's true that both sides are trying to get the most cash possible out of the deal. The NFL certainly isn't a lowly David being picked on by the big cable company Goliath. And, as I mentioned in the post, it really ticks me off that the NFL started this mess by pulling games from the schedule and putting them on its own exclusive network.

But, all greed being equal, I want my NFL.


I'll check out those Easterbrook columns. Thanks for pointing them out.

December 18, 2006  
Anonymous Anonymous said...

Maybe we could toss in the shopping channels too.

December 18, 2006  
Blogger Seth Zlotocha said...

I'm with you on that one, Dean. Although something tells me those shopping channels have a freakishly strong following among the 50+ female demographic -- a group that I'd be a bit scared to tick off.

December 19, 2006  
Anonymous Anonymous said...

Since I'm married to one, I'd agree you don't want to tick them off. Not that she watches those channels; she's partial to HGTV and TLC, hence I didn't mention those :^)

December 19, 2006  
Anonymous irieblazer420sd said...

its sad, basic cable here comes with the 24/7 GOLF channel, but not NFL Network?

Its malarcky I tells ya! Malarcky!

the NFL Network SHOULD come with your digital cable box. hell toss a channel like... well i don't really know.

If cable companies are making many HD channels free in 2008 why not the NFL Network?

December 08, 2007  

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