Filed under: 1 | Tags: analog frequency bidding, cable TV, comcast, content, google, internet access, nfl, sports stadiums, verizon
Months ago I wrote an entry that was an adjunct to a project I had done several years ago. Mainly about the economics of sports stadiums. Usually the argument made for building a stadium for a team revolves around the tax revenue generated by the stadium itself. The problem is that the revenue generated there rarely actually comes to fruition for paying for the stadium. The real win is to use such a construction project to change the spending patterns of the people in an area in order to revitalize that area. Like in Baltimore, build a stadium in a place that needs help, and people will start getting used to spending time there on non-game days. In New England the new “man” mall is the same idea. Get people coming to Foxboro for something other than a game a create something more than an event driven revenue stream for that real estate investment.
Is this model coming online? The battle online has evolved into a battle for content, not access. Whereas the Comcasts, Verizons, etc. of the world battled in the prior few years to give customers access to the internet, now that battle is over. Access to the internet is rapidly becoming commodotized and only far greater access speeds than the norm can garner a premium price. The spending pattern is changing and moving to content.
In terms of the NFL, with the rules governing content distribution (the 45 second clip rule etc.) the battle is more about where you get your content from than how to access it online. Do you get your NFL content in this case from NFL.com or AOL or ESPN etc. All have far different models for licsensing and paying for content. The question is where will the consumer want to go to consume. I think the day is near at hand where consumers will be subscribers to the NFL, HBO, etc. as separate or bundled entities and consumer the content from those sources anywhere. So rather than being a subscriber to Comcast, and only having access to the channels they provide, soon you should be able to subscirbe to NFL Network, HBO, ESPN, BBC and have that content on a channel by channel basis pushed out to your TV, Mobile, PC over any of the companies that provide access. This is one of the drivers of the bidding war over the analog TV signal.
As many of you probably do not know, the old analog TV signals are up for bid. Comcast, Verizon, Google seem to be the front runners for these frequencies. All for different reasons. Comcast according to Federal rule can only ever have 30% market share for cable TV, the are in the high 20s, where is their growth going to come from? Google wants to create (we think) a giant free WiFi network with the frequencies which obviously helps their market share.Verizon already owns somehting like 70% of the US internet backbone and would like to keep that level of marke dominance. All have very different reasons but it still comes down to price pressure driving the cost to access the internet down and consumers looking to get the content they want how they want to get it. The new x-Box allows you to hook up to your TV and show internet based content on your TV. The convergence of access to the internet is coming. TiVo was really the first device to actively use the internet in conjunciton with your cable box, that was only the start.
So in the midst of the NFL/Comcast battle, the frequencey bidding war ( I think we are a year or so from resolution) there is the battle for how consumers get their content. This is a fundamental change in the spending patterns from the consumer. The premium pricing will be at the level of the content creator of content distributor level, not the internet or broadcast TV level anymore. So watch for your current providers of internet access, mobile phone, and TV all start to look the same and provide the same services. Just look at where VOIP has come, now everyone offers a version of it.
The bottom line is, how the market evolves will determine how you can pick and choose what content you will subscribe to. The spending pattern is changing. Now it is a question of how else your internet access can be leveraged and therefore how YOU are monetized as opposed to just monetizing, at a premium, the connection itself.
The battle for control has become over the rights to content. Distributors will be the dominant media companies of hte next few years, not the cable or phone companies. Despite what Comcast and Verizon want to be….now you know why the NFL is so militant about who and how it’s content gets delivered, they know if is their revenue stream of the future…….
Recently I had the chance to view a segment from a Boston based reporter spending time interviewing fans at an Indianapolis bar while watching the Patriots/Jaguars games. It was interesting to see the reaction. First of all, the Colts fans really do consider their team “the classiest” team in the NFL and one that always does things the “right way”. Their description of the Patriots was along the lines of ‘disreputable’, “classless”,”cheaters”, etc.
Let’s look at the facts shall we? First of all, having been on the sidelines for Colts and Patriots games, Colts players talk almost as much trash as San Diego players. Clearly more than most any team. The amount of taunting from their players is at least equal to that of the Patriots, who are certainly guilty of some of that as well. I still don’t get the classless and cheaters reference. The VideoGate incident was for one game and did not affect the outcome of that game. Anyone associated with the NFL will tell you it had more to do with where the Patriots were filming than the content itself. It did not affect the outcome of that game, and they were justifiably punished for it. Enough already….I do find it interesting however when I go to a Colts game in Indianapolis that while sitting in one of the last rows high in the stadium, there is a TON of crowd noise coming from behind me. Interesting since the only thing behind me was a few rows of seats, oh and SPEAKERS. Piping in crowd noise is something the Colts have been accused of in the past by the Steelers, Jets, Bengals etc…
I will say this, Tony Dungy is a high quality person, one that we could use allot more like these days. But let’s not be so naive as to say the Colts don’t look for every edge like every other team does.
The real item I wanted to get to was the punt, pass and kick winners. How can fans be so classless as to boo the 14 year old winner from New Hampshire because she is wearing a Patriots jersey? All the kids were wearing a jersey from their favorite team. No one else was booed. This was just a 14 year old girl who won a competition. Here in New England I have seen kids win similar contests and wear Yankees hats, Jets, Giants and the like and not be berated for it. Just another example of the moral superiority Colts fans think they have. As much as I respect Tony Dungy and hopes he comes back next year, having travled all over the US and been to games in every NFL city, I will not miss the Colts fans. There are loud, obnoxious fans everywhere but no one has the smug attitude of the Indianapolis fan.
This past year while in San Franscisco on business, and wearing my Patriots hat, I ran into a group of Colts fans downtown. All wearing their gear, and good for them. They decided to approach me over by the crooked street, making fun of the Pats etc. And that is fine. I congratulated them on their Superbowl and told them to enjoy it, there is never a greater feeling than the first time your favorite team wins a championship. It is always the best championship. I was promptly told to F- off that the Colts would win several in a row and shut out the Pats. It is starting to sound like Red Sox v. Yankees fans in the late 1990s! It is just a game, enjoy it and let other people enjoy their team. Stop trying to make your team sound better by disparaging others.
So much for my rant, usually my posts are much more detailed about league issues etc. But recent events just wound me up a bit about Colts fans….let’s face it, there is no team in the NFL full of angels, they are just people like everyone else representing all sides of life, let’s not build up any team to be more than it really is, a team put togehter for entertainment value only…..
Filed under: 1 | Tags: Boston, Cable Companies, digital content, Giants, New York, nfl, nfl network, Patriots, peter king
This past weekend I had the opportunity to watch the long awaited Patriots/Giants game from a market other than either Boston or New York. With the battle going on between the NFL and the cable companies (Peter King at SI.com wrote a great article breaking it down) did anyone else notice the game broadcast turned into a sort of NFL Network infomercial? It really did seem like every other ad was not only for NFL Network, but taking shots at large cable. (I really liked the one in the diner where patrons were talking about letting the cable companies keep the makeover shows and shopping channels!). While we can talk at length about the effort Roger Goodell went to bring the game to the fans because so many fans wanted to see it, or the role government or the other networks had in this broadcast….it is pretty clear that part of the deal was definately a large media buy. I really would be interested to know if anyone kept track of how many spots NFL Network had on the other networks carrying the game. Certainly the networks have the ability to sub in their own ads, we see it all the time on cable, but the deal certianly looks like the NFL had the opportunity to run a certain amout of it’s own advertising. Certainly it seemed to be allot more than what I usually see on the NFL Network broadcasts (yes I subscribe and watch regularly).
What will the impact be? The NFL has proven to be exceptional at PR in the past, despite the Pacman Jones and Michael Vick issues. Is this an attempt to build a groundswell of support for them during what proved to be the most watched regular season game in year? I certianly hope so. I have no love for the cable companies and certainly believe there is more than enough margin in their pricing to support the NFL Network. Big Cable has to see that the future of content in general lies with the content producers, not the distribution mechanism. The NFL has consumable content with a large demand, a recently saw a study that stated 52% of all US residents consider themselves NFL fans. Dwarfing the other sports ( I think baseball was second at 28% or so).
The real question will be how will this affect the NFL content strategy or will it? The NFL does not allow content of more than 45 seconds to be shown by networks without a fee it is my understanding. Does the popularity of this game give them a platform to make the content more consumable on more vehicles more easily? Such as the ability to see entire games on my PC or mobile? Or subscribe to NFL Network and consume the content anywhere through the TV, PC, XBox, mobile etc?
I think beyond the cable battle, this game may prove to be the market test needed to make the decision on how, where, and what pricing model would be used to make NFL content more available and consumable.
