Have you ever wondered why there’s reluctance on the part of video services to offer a la carte programming?
OK, yes, greed is one and it’s not coming from your provider. OK, yes, it has its own issues. Let’s just indict the entire industry, why don’t we?
When the Time Warner Cable/Comcast merger washed up on an uncharted island last week, I personally did a happy dance. Allowing that to go through would have further scuttled legitimate competition among video providers. They sang a song that the deal would make things better for consumers, but such talk was akin to One Direction remaking a classic Beatles tune.
And now an interesting bit of news comes from the world of sports programming and broadcasting. Verizon’s attempt to offer skinny bundles sans sports networks via its Fios service is being met with a wee bit of resistance — make that a lot of resistance.
Verizon wants to offer its customers “custom TV bundles.” It’s not quite the same as a la carte programming but it offers flexibility for those folks who don’t want ESPN, Fox Sports 1 and other sports channels jammed down their respective gullets.
ESPN and its brethren in sports broadcasting have decided to pull a Dikembe Mutombo: “No! No! No!,” arguing that the new bundles, which start at $59 for 35 channels (think Dish Network’s Sling TV) with additional tiers available by genre, violate carriage contracts.
On some Walt Disney Co. (ESPN’s parent company)-owned TV stations and Fox-owned stations (FS1’s parent company), they’ve refused to sell Verizon advertising time to publicize the move.
In the case of ESPN, things got a wee bit uglier Monday when the House that Mickey Built filed a lawsuit against Verizon alleging breach of contract, according to a Wall Street Journal report.
Given Fox’s and NBC’s concurring stances, it might not be the last. This is where we are with respect to video services and programming.
Momentum continues to gather for so-called, over-the-top services like Netflix, Hulu Plus and Amazon Prime — so much so that HBO freed itself from the constraints of cable TV with its HBO Now service, which, though exclusively on Apple devices now, will eventually make its way to others.
The temptation is there to believe that the ESPNs, FS1s and NBCSNs of the world can just release an app and charge a fee and, boom, the a la carte issue is solved. Not the case, considering the billions and billions of rights fees that sports networks pay for live programming — meaning games — that power their channels.
Very little other programming generates the audiences on sports networks like a live football or basketball game and even in the case of something such as college hoops the audience just isn’t that substantive.
For ESPN and others to generate the kind of revenue needed to pay rights fees that just keep rising, any access via an OTT app would cost significantly more monthly simply because most people could easily get along without sitting down and watching a sporting event in its entirety.
That is why ESPN will continue to fight this tooth and nail against Verizon. The communications behemoth is tinkering with something that is the very engine of sports networks. ESPN and others are paid by video providers based on the number of eyes with which they have access. Right now, Verizon is pulling a Three Stooges act and poking those eyes.
Why does this matter? In an era of alleged “cord cutting,” all providers will be watching to see what happens because their economic model for the foreseeable future is dependent upon what happens.
George M. Thomas can be reached at firstname.lastname@example.org. Read the Zips blog at www.ohio.com/zips. Follow him on Twitter at www.twitter.com/GeorgeThomasABJ and on Facebook at www.facebook.com/abj.sports.