How ala carte cable could kill sports

Long-time readers of this site may remember that I have long been interested in the scenario that cable companies could one day offer unbundled ala carte pricing instead of their current tier-based system. If Rutgers athletic director Tim Pernetti is interested in how a changing media landscape affects college sports, then I am too.

This looming threat would be a doomsday scenario for all televised sports, but among the worst hit would be college football. It is heavily dependent on ESPN, which owns most league broadcasting rights with the exception of the Mountain West. If you want one scenario that actually could grind the BCS to a screeching halt, inaugurating chaos and a thousand years of darkness, this is the ticket.

Time Warner Chief Marketing Officer Sam Howe provided details of the new low-end video offering for the first time at the SNL Kagan Cable MSO Summit in New York on Thursday. The new package will be offered as a test in New York City starting Monday, where it will cost $39.95 per month. It will also be offered in parts of Ohio, where it will be priced at $29.95 per month. These are promotional offers and the price will go up to $49.99 per month after one year, the company said.

The service will include all local broadcast stations and major broadcast channels, as well as 12 of the most popular 20 cable channels. But there will be some notable channels missing in this version of the service including, ESPN, Comedy Central, TNT, Fox News, MSNBC, Fox regional sports, and MSG.

With cable companies bleeding subscribers to online services like Netflix and Hulu, Time Warner and its competitors may not have any choice in the matter for much longer. This experiment is only a stone's throw away from full ala carte pricing.

Time Warner's plan is especially a shot across the bow at sports due to the dirty little secret (well, not so much if you remember Cablevision's epic battles with YES) of televised sports rights: they are really freakin' expensive.

"TV Essentials" may be particularly appealing to those who aren't sports fans, as ESPN and regional sports networks have collected rising fees from cable and satellite companies in return for their programming, driving up the cost of pay-TV.

"It's no secret that the most expensive programming is sports, and so in an effort to create a package that's less expensive, we've attempted to craft a bundle [for] people who may not want access to all the sports programming out there," said Mr. Britt. "Our market research says there are clearly people who are not big sports fans."

In a city as big as New York, why should cable subscribers with no interest in sports have to involuntarily subsidize ESPN, MSG, YES, SNY, and the NFL Network if they want access to other channels? More importantly, can't the same be said of the rest of the country? All popular sports that depend on television revenue are in big trouble if this pilot spreads to other markets.

If the cable bubble pops, professional teams would have to stop building models that are largely divorced from actually attracting fans into the stands. They would no longer be able to spend willy-nilly on adding personnel through free agency, which could either be a big positive or negative depending on your perspective. More promising is the possibility that the ongoing quest for diversified revenue streams could finally be an impetus towards more innovation and efficient uses of existing assets, like my dream of comprehensive video on-demand finally coming to pass.

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