I hope this guy is wrong about less Big Ten money

[HeavenUniv.]

If you look in the comments section, there is a guy who posts that "the Big Ten pie will be shrinking". I know some people have gotten rid of cable and signed up for Nethuluinstaflix or whatever the trend of the week is,but do you guys actually see the TV money pie shrinking later this decade ?---http://www.nj.com/rutgersfootball/i...ers_at_their_7-on-7_passing.html#incart_river

 

[RUBigFrank]

some merit to the comment as the cut the cord trend grows. many on here have boasted cord cutting - very likely there will be an economic impact to the cable industry.

 

[jason21psu]

I see this as likely happening except that once channels go a la carte sports channels are going to be the one in demand. Netflix/Hulu/Amazon Prime aren't set up to produce live television.

 

[derleider]

The Big Ten is about to sign a HUGE contract that will likely be for a decade or more. That will lock the Big Ten in to higher rates until well into the next decade. Sports are MORE valuable now because people in fact hold onto cable specificaly for sports. Thye watch them live (commercials and all) at a much higher rate than pre-recorded programming.

Its certainly possible that the BTN share shrinks over time - in fact over a decade or more, it deinfintely will as people cut the cord. But people arent going to stop watchign sports - what they will do is cut the cord then pay for the BTN over the internet. Given that the Big Ten is very popular in an area with a very large population - the Big Ten will do very well.

The three main sources of TV money are the Tier 1 contract (the first paragraph). Thats gonna stay high for a while. And like I said - the Big Ten, being the last to get in, is going to be locked in the lognest. In other words - if ther trend towards cutting the cord really takes off, it will be the TV partners of the Big Ten that feel the burn, not the Big Ten itself.

The second is te BTN - but going foward its a smaller piece of the puzzle. And for a while what will happen is that they will charge MORE for the network to less people.

The third is bowls. Basically all of the bowl money comes from TV. Smaller bowls might lose out in a cord cutting scenario, but the bigger ones will still be appointment viewing.

In short - as long as FB is popular, people will want to watch it. As long as CFB is popular, you can assume that the Big Ten will be among the most popular and therefore most lucrative. If there is a downward trend in the money it will hit everyone else first and harder.

 

[krup]

I think people have looked at how technology have impacted areas like the music business and taken the completely wrong message about how it affects video content providers, at least sports specifically.

Music has become such a commodity that artists get $0.0000001 a playing on Pandora, Spotify, etc. instead of making several dollars on selling each of a million albums. However, the one thing technology couldn't replace (live concerts) is still making popular artists huge amounts of money.

When it comes to cable, many lesser channels will cease to exist, and content created by channels that make revenue only because of the bundled cable model will disappear. However, regardless of the delivery vehicle, you cannot legally cheaply replace the ability to watch a sporting event when it has all its value (in real time), so sports viewing rights are going to be the live concert equivalent in whatever the video viewing model ends up being. The people who generate popular sports content will continue to make big money.

 

[Scarlet_Scourge]

The Big Ten schools combined have the largest fan base in all of College Sports. So even if BTN becomes a sub based App like BTN Plus, they will still be making just as much or more money.

 

[NYSportsFan]

yes and no. TV viewing has changed significantly in the past 5 years no question and it is true that cable subs in the country has diminished in numbers in the past five years, but not at such a high rate that tv money these leagues generate will go down significantly. people cutting the cord on cable is why so many networks now have launched or looked into launching, OTT services (like HBO NOW, Netflix, MLB At Bat) to go direct to consumers, but there are just as many apps that require cable authentication (i.e. MSG GO, HBO GO, WATCH ESPN, FX NOW) to view. The viewing has changed but there is still a solid subscriber base nationwide, i don't think you'll see that dramatic a shift, which in turn means the money that these networks get from TV deals will still be high.

 

[derleider]

I think people have looked at how technology have impacted areas like the music business and taken the completely wrong message about how it affects video content providers, at least sports specifically.

Music has become such a commodity that artists get $0.0000001 a playing on Pandora, Spotify, etc. instead of making several dollars on selling each of a million albums. However, the one thing technology couldn't replace (live concerts) is still making popular artists huge amounts of money.

When it comes to cable, many lesser channels will cease to exist, and content created by channels that make revenue only because of the bundled cable model will disappear. However, regardless of the delivery vehicle, you cannot legally cheaply replace the ability to watch a sporting event when it has all its value (in real time), so sports viewing rights are going to be the live concert equivalent in whatever the video viewing model ends up being. The people who generate popular sports content will continue to make big money.

This exactly. If there were a market for viewing historic sports events, it would have collapsed by now, like music. But the value is all in the real time viewing and that much harder to do illegally.

That being said - we lucked out. We happened to get good just at a time when there was enough cable bandwidth that you could have a conference network, but not beore there was SOOO much that the whole idea of a network and broadbased subscription disappeared entirely.

Howver - as of last fall 84% of households still had pay TV (cable, fiber, satellite). Its going to be a long time before that really starts to drop off - and first you will see semi-a la carte (more narrowly tailored bunles), then pure a la carte. And even then, as said above - the Big Ten will still be must see viewing for as logn as college football itself is popular, and the schools will make money off of it.

 

[MozRU]

The Big Ten is about to sign a HUGE contract that will likely be for a decade or more. That will lock the Big Ten in to higher rates until well into the next decade. Sports are MORE valuable now because people in fact hold onto cable specificaly for sports. Thye watch them live (commercials and all) at a much higher rate than pre-recorded programming.

Its certainly possible that the BTN share shrinks over time - in fact over a decade or more, it deinfintely will as people cut the cord. But people arent going to stop watchign sports - what they will do is cut the cord then pay for the BTN over the internet. Given that the Big Ten is very popular in an area with a very large population - the Big Ten will do very well.

The three main sources of TV money are the Tier 1 contract (the first paragraph). Thats gonna stay high for a while. And like I said - the Big Ten, being the last to get in, is going to be locked in the lognest. In other words - if ther trend towards cutting the cord really takes off, it will be the TV partners of the Big Ten that feel the burn, not the Big Ten itself.

The second is te BTN - but going foward its a smaller piece of the puzzle. And for a while what will happen is that they will charge MORE for the network to less people.

The third is bowls. Basically all of the bowl money comes from TV. Smaller bowls might lose out in a cord cutting scenario, but the bigger ones will still be appointment viewing.

In short - as long as FB is popular, people will want to watch it. As long as CFB is popular, you can assume that the Big Ten will be among the most popular and therefore most lucrative. If there is a downward trend in the money it will hit everyone else first and harder.

"But people arent going to stop watchign sports - what they will do is cut the cord then pay for the BTN over the internet."
My grandmother, dad and mom do not watch college football but pay for it (embedded in the cable bill). There are many people like them. There are far less people willing to pay for sports than you think.

(I know. I have been beating this drum for some time. I am not cheering for it. I fearful actually. The moment we get into a great conference - it feels like the top tick of the market. Revenue goes down. Not this time around - this next contract will be massive that the NYC market is involved. I am thinking long term).

 

[PSU_Nut]

"But people arent going to stop watchign sports - what they will do is cut the cord then pay for the BTN over the internet."
My grandmother, dad and mom do not watch college football but pay for it (embedded in the cable bill). There are many people like them. There are far less people willing to pay for sports than you think.

(I know. I have been beating this drum for some time. I am not cheering for it. I fearful actually. The moment we get into a great conference - it feels like the top tick of the market. Revenue goes down. Not this time around - this next contract will be massive that the NYC market is involved. I am thinking long term).

Content producers are not going to take less money. So instead of .80 per subscriber on cable they will be asking $30 per subscription. This will make up for those people. In the end people will get less variety and pay about the same.

We are still a bit away from the subscriber TV market collapse. They lost 0.1% last year dropping from 100.9 million to 100.8 million. Enough to be a concern but not enough to panic.

 

[JQRU91]

What Moz says is true, but if sports go a la carte, the serious sports fans would probably be willing to pay several times what they pay now for their sports programming. I'm talking about the stuff that's already packaged, not channels you are already paying separately for.

 

[Ty Webb]

I see this as likely happening except that once channels go a la carte sports channels are going to be the one in demand. Netflix/Hulu/Amazon Prime aren't set up to produce live television.

True but that still cut hurt the pie. One of the benefits of being picked up by cable is that you can bundle stuff to force people who don't want a particular channel to have to buy it to get access to other channels they might watch.

If you open up the SECN or BTN to just people having to purchase it off the shelf on its own, you are going to end up with less subscribers. For example, as a ND fan, I wouldn't purchase either because ND would never be either channel and most of the top games will be on the mainstream ESPN/ABC/FOX/CBS stations. But today, in order for me to have a certain cable package, I have the BTN and SECN.

It's going to be fascinating to see if this cut the cord movement continues to gain steam and how cable providers and networks respond.

 

[Scarlet_Scourge]

BTN wouldn't be by itself...it would be part of the FOX sports channels including Fox Sports 1 and 2 and the YES network and others.

Currently BTN offers BTN Plus by itself as a monthly service.

 

[Ty Webb]

BTN wouldn't be by itself...it would be part of the FOX sports channels including Fox Sports 1 and 2 and the YES network and others.

Currently BTN offers BTN Plus by itself as a monthly service.

Maybe, maybe not. The whole point of ala carte would be to pick and choose what you want. If the market demands that, Fox (or ESPN for that matter) wouldn't be able to then go back and try to bundle stations.

I mean in that sense, if that's where this goes, then ESPN should bundle the Longhorn Network with ESPN and ESPN2.

 

[NYSportsFan]

it will continue to decrease each year the subscriber base, but at a glacial pace. you will never lose the sub base entirely. viewership of content is king, with or without the subscriber base, and that means any new app or OTT type service to consumers to view this content will either come at a price or thru you logging in with your cable operator or satellite provider. its why HBO still has GO and NOW. there will always be a marketplace for both because the demand to view content will never change, just the way it is being consumed. what you could see happen in the future is consolidation of the cable operators, that will happen for sure.

 

[LBusDoor90]

I see this as likely happening except that once channels go a la carte sports channels are going to be the one in demand. Netflix/Hulu/Amazon Prime aren't set up to produce live television.

They certainly are capable of doing it rather quickly just like the early BTN did. Netflix is now bigger than ABC, NBC or CBS individually and therefore has the financial resources to create that capability fast.

 

[derleider]

Content producers are not going to take less money. So instead of .80 per subscriber on cable they will be asking $30 per subscription. This will make up for those people. In the end people will get less variety and pay about the same.

We are still a bit away from the subscriber TV market collapse. They lost 0.1% last year dropping from 100.9 million to 100.8 million. Enough to be a concern but not enough to panic.

Yes and no. We hope they do. They certainly hope they do. I would expect that some will be able to and some wont. I suspect they will make less money - among other things - because if the pay per view model were MORE viable for regular viewing, then I think they would already do it. CFB at any time might have 5% of households watching. But peopel will ave to pick and choose. This is where the LHN and SEC will do well - because ESPN will throw them in with thier ESPN package (and charge a little more for ESPN than its real value), while the BTN will have to be throw in with a less popular Fox bundle of sports networks.

 

[RUBlackout]

The thing is that the cable companies are all aggregators of content and most people(like me) dont want the hassle of having to manage 50 different subscriptions just to get some content from each place.

 

[Upstream]

The thing is that the cable companies are all aggregators of content and most people(like me) dont want the hassle of having to manage 50 different subscriptions just to get some content from each place.

And that is what will stop most people from completely cutting the cord, and going completely a la carte.

You would still need an Internet service provider (who is likely to be a company that also offers tv services ), and unless you have very limited viewing, you will need to manage multiple content subscriptions that are likely to cost more than a comparable cable package.

 

[Scarlet_Scourge]

Comcast wants to one day get rid of the cable box and offer cable on-line and through streaming devices and just release a Comcast app for them.

Other cable companies are already thinking the same thing I am sure.

 

[MikeRU1766]

The below paragraph from "derlieder" IS EXACTLY right. I think many football fans will eventually decide it is in their best interest to cut the cord, BUT they will still be willing to pay 200 a year or so for the ability to watch BTN.

"Its certainly possible that the BTN share shrinks over time - in fact over a decade or more, it deinfintely will as people cut the cord. But people arent going to stop watchign sports - what they will do is cut the cord then pay for the BTN over the internet. Given that the Big Ten is very popular in an area with a very large population - the Big Ten will do very well. "

 

[GoodOl'Rutgers]

From a competitive standpoint, as long as the Big ten earns its schools as much or more than other conferences schools.. whether the net amount goes up r down is somewhat irrelevant. Programs will adjust their spending accordingly. Paying coaches less and so on if revenues go down. The real problem would be if cord-cutting hurt the Big Ten more than other power conferences.

For years and years here during the Big East era I proposed the big East take ownership of their product and boot ESPN to the curb. Control production values and so on. The Big Ten has that control and is position to exert more control in 2016. I am happy with the prospect.

 

[LevaosLectures]

I would love to be able to just pay for a BTN app of my Roku. I hope it happens soon.

 

[TheB1GTerp]

If you look in the comments section, there is a guy who posts that "the Big Ten pie will be shrinking". I know some people have gotten rid of cable and signed up for Nethuluinstaflix or whatever the trend of the week is,but do you guys actually see the TV money pie shrinking later this decade ?---http://www.nj.com/rutgersfootball/i...ers_at_their_7-on-7_passing.html#incart_river

The thing is no matter how you slice it people will be paying for content. Increased internet bills, increase ala cart fees, netflix has more than double din cost and will continue to do so.

The great thing about the Big Ten is it is in a lot of states and has a lot of fans. Sports fans if we have learned anything, will pay for sports. Many of us only have cable just because of live sports.

 

[derleider]

From a competitive standpoint, as long as the Big ten earns its schools as much or more than other conferences schools.. whether the net amount goes up r down is somewhat irrelevant. Programs will adjust their spending accordingly. Paying coaches less and so on if revenues go down. The real problem would be if cord-cutting hurt the Big Ten more than other power conferences.

For years and years here during the Big East era I proposed the big East take ownership of their product and boot ESPN to the curb. Control production values and so on. The Big Ten has that control and is position to exert more control in 2016. I am happy with the prospect.

That would have been a terrible move for the Big East if they actually wanted people to see their games. I mean what did it get the Mountain West?

But you are right in your first paragraph - its all about comparative advantage and the Big Ten should be #1 or #2 with the SEC due to population and popularity for a long long time. Eventually population growth in the South might catch up to the Big Ten but that is decades away. Hell by then we might be down to one big league iwth shared TV contracts anyway

 

[lighty]

"I see this as likely happening except that once channels go a la carte sports channels are going to be the one in demand. Netflix/Hulu/Amazon Prime aren't set up to produce live television."

I think the college football contracts will actually be worth MORE because of reasons like this. As he mentioned, the alternatives to cable really aren't designed for live television. Why is live tv important? Because people cannot fast forward past the commercials. They may ignore the commercials or use that time to hit the restroom or get another drink, but sports is the #1 thing for live tv. Network sitcoms lost out long ago. A significant percentage of people are watching them on their DVRs or something like Hulu. Those advertisers lose out when that happens.

IMO televised sports will likely continue to grow even as cable subscriber lists dwindle. A perfect example of this is Super Bowl advertising. Why does the cost go up each year when it's already so expensive? Because only a fraction of people will watch it the next day...

 

[derleider]

"I see this as likely happening except that once channels go a la carte sports channels are going to be the one in demand. Netflix/Hulu/Amazon Prime aren't set up to produce live television."

I think the college football contracts will actually be worth MORE because of reasons like this. As he mentioned, the alternatives to cable really aren't designed for live television. Why is live tv important? Because people cannot fast forward past the commercials. They may ignore the commercials or use that time to hit the restroom or get another drink, but sports is the #1 thing for live tv. Network sitcoms lost out long ago. A significant percentage of people are watching them on their DVRs or something like Hulu. Those advertisers lose out when that happens.

IMO televised sports will likely continue to grow even as cable subscriber lists dwindle. A perfect example of this is Super Bowl advertising. Why does the cost go up each year when it's already so expensive? Because only a fraction of people will watch it the next day...

On the flip side - if you are already paying alot for the product - how much are you going to stand by for commercials.

I mean thats part of the thing with Hulu and Netflix - you pay to not get commercials. For right now commercial breaks are built into our sports - but they dont need to be as long. It would be interesting to see leagues experiment with commerical length once they control the product. Will ony lrague get more viewers because its version has minimal commercials?

 

[JQRU91]

On the flip side - if you are already paying alot for the product - how much are you going to stand by for commercials.

I mean thats part of the thing with Hulu and Netflix - you pay to not get commercials. For right now commercial breaks are built into our sports - but they dont need to be as long. It would be interesting to see leagues experiment with commerical length once they control the product. Will ony lrague get more viewers because its version has minimal commercials?

It could be that sporting events will have more advertising embedded in the actual broadcasts. Announcers slipping in a pitch during a break in the action and logos or ads scrolling across the screen.

 

[GoodOl'Rutgers]

That would have been a terrible move for the Big East if they actually wanted people to see their games. I mean what did it get the Mountain West?/QUOTE]

Disagree. The Big East is and was not the Mountain West. You cannot look to the Mountain West and think a Big East network would have been similarly received. Different teams, different markets. For example, we had a premium basketball product to sell. It would be far easier for the Big East to sell advertising than the Mountain West.. more eyeballs at stake.

Quality broadcast production and use of broadband for distribution had made it cost effective to go into production of your own product. And we existed in an atmosphere where ESPN/ABC had its best interests in minimizing the profile of the Big East.. controlling it rather than competing with it.

At a minimum, it may have prevented the raid of Syracuse and Pitt.

 

[lighty]

Good point Derleider, but I think JQR91 may be right. In other countries, soccer has quite a bit of advertising in a game with zero breaks in action. They run ads at the top or bottom of the screen like banner ads, some shrink the screen with an ad around the game, and other methods. I could see people developing a nice way of turning the live action into the design of a website and running ads during the action.

It's going to be VERY DIFFICULT to remove ads from live sporting events simply because it's one of the few times advertisers have a rather captive audience. I'm pretty sure I've seen ads during the NHL subscription for online and I get ads when listening to games on Sirius. Even with a subscription, ads are very likely to be part of the deal imo.

 

[Cruising Route 66]

If you look in the comments section, there is a guy who posts that "the Big Ten pie will be shrinking". I know some people have gotten rid of cable and signed up for Nethuluinstaflix or whatever the trend of the week is,but do you guys actually see the TV money pie shrinking later this decade ?---http://www.nj.com/rutgersfootball/i...ers_at_their_7-on-7_passing.html#incart_river

The B1G receives a sum certain rights fee from the BTN through 2028. The B1G (absent a school leaving the conference) will receive that contracted amount regardless of the number of viewing households. However, the B1G's financial pie could still shrink (The B1G receives 29% of the network's profits. BTN Revenue - rights fees - production costs - taxes = Total BTN profit). If the BTN's viewing households declines due to a la carte pricing (the network receives a set amount for each viewing household) then it's entirely possible there will be less BTN profit available to share.

It's almost certain that the expiring ESPN deal will be renewed with ESPN or some other network for an amount significantly greater than the current contract. Like the old contract, the new one will likely provide a yearly sum certain amount to the conference irrespective of the number of viewing households.

 

[Blitz8RUCrazy]

I'd much rather pay $500 a year to just get a BTN 24/7 channel that I can watch on any platform with all RU sports matches (every game) unlimited replays than pay for cable

 

[derleider]

Lol. Basketball product to sell. Where has that gotten the acc.

 

[WhiteBus]

Okay. To show how dumb this post is name a P5 conference that didn't get a boatload more money in there last contract.
My word some of you have no clue.

 

[Knight_Light]

Sports are MORE valuable now because people in fact hold onto cable specificaly for sports. Thye watch them live (commercials and all) at a much higher rate than pre-recorded programming.

.

Your 2nd part is correct...but more and more people (even sports fans...especially those in their 20's) are cutting the cord (actually, many are never getting it...as some are living on their own for the first time and never signed up for either cable or sat)...hence why the first time in almost 40 years, cable and sat subscribers have dropped...and continue to drop.

Here's the cord cutting stats for the first 3 months of this year: (analyst have noted it continues to accelerate during the spring).

Investment consulting firm Evercore ISI estimated that the industry lost even more -- 40,000 subscribers in the quarter with cable losing the most (105,000), satellite losing 74,000 and telco TV providers adding 143,000.

Dish Network lost the most subscribers, 134,000, due to its programming disputes with Turner and Fox, Evercore ISI analysts said. Competitor DirecTV added 60,000.

Overall, cable companies lost 86,000 combined -- Time Warner Cable was the only to add subscribers, about 33,000 -- while satellite lost 74,000, MoffettNathanson estimated. AT&T and Verizon, which deliver pay TV over fiberoptic networks, added about 50,000 and 90,000, respectively.
-------------------------

Another important fact is even those with cable/sat subscriptions...their viewing habits are changing (i.e. not all viewing takes place in their home in front of a tv).

Those TV networks (and/or even Conf TV Networks) that are able to maximize penetration to mobile viewers (tablets/phones, etc...), can also have the opportunity to cash in during the coming years/decades.

 

[JQRU91]

Here's an article about ESPN that relates. ESPN has lost 3.2 million subscribers in over a year and are having to cut costs. The article talks about how this may be due to the changing nature of the cable TV business.

http://finance.yahoo.com/news/theres-serious-cost-cutting-going-142652796.html

 

[pnnylion]

The BigTen is going to get more not less. The guy is an idiot.

 

[derleider]

The BigTen is going to get more not less. The guy is an idiot.

In the short term - yes - the next contract will come out before the real ramifactions of people dropping cable are felt. In the longer term, if ESPN is losing millions of customers a year, then what do you think is going on with the BTN?

 

[pnnylion]

In the short term - yes - the next contract will come out before the real ramifactions of people dropping cable are felt. In the longer term, if ESPN is losing millions of customers a year, then what do you think is going on with the BTN?

The next contract is going to put the B10 at the head of the pack for money making.

 

[krup]

Here's an article about ESPN that relates. ESPN has lost 3.2 million subscribers in over a year and are having to cut costs. The article talks about how this may be due to the changing nature of the cable TV business.

http://finance.yahoo.com/news/theres-serious-cost-cutting-going-142652796.html

ESPN is really screwed in the next model. The article talks about ESPN needing to charge $30 a month as a subscription price. What it doesn't seem to take into account is we have already seen that HBO's price point of $15-20 a month is enough to get a lot of people to add/drop HBO based on what new content is or isn't being shown that month.

ESPN's price will generate the same behavior and the mix of sports they have overpaid for doesn't help Their most desirable content (college football and MNF) happens at the same time, so their subscriptions seem likely to plummet in the spring/summer