What a delightful week this is turning out to be for Verizon. First, archrival AT&T decides it will ditch its $39 billion bid for T-Mobile USA (as if they weren’t grinning madly in the halls of Verizon’s Art Deco building down on West Street) and then they get a piece of this NBC deal to stream the Super Bowl. No doubt, in the greater scheme of things the AT&T news trumps the streaming deal — but every little thing helps in the crazy competitive telecoms world.
We had the pleasure of incoming ESPN President John Skipper’s company on Monday at the Reuters Media Summit in New York. Skipper, whose promotion was announced just ahead of Thanksgiving Day, had been the No.2 to George Bodenheimer, now promoted to executive chairman.
In the last few years ESPN has become the 800-pound gorilla in the pay-TV industry through its mix of exclusive sporting licenses with many of the top sporting leagues and events. But those deals cost money — like the eight-year NFL TV rights that cost $15.2 billion. Even Skipper, in his first interview since his appointment was announced, acknowledged the deal as “expensive” but added the caveat that ESPN generates great value from NFL rights.
The high cost of sports programming is one reason ESPN is the most expensive cable network in the US at around $4 per subscriber. Most cable networks charge a lot less than $1.
But Skipper is adamant that ESPN is worth every penny and pushed back strongly at any suggestion that cable companies could create new tiers to help customers pay less if their package don’t include ESPN.
“It’s demonstrably true that ESPN provides more value to our distributors than any other network — by far, there’s not a close second. If you survey cable, telco and satellite customers they believe ESPN provides the most value. The distributors themselves believe we provide the most value.
I reject the notion (that ESPN high cost should see it placed on higher priced tiers). I think the current package of pay-TV products that comes through on basic cable is a high value proposition to the consumer I don’t think breaking them up is going to provide the consumer better option. If they become broken up in an a la carte world the individual channels are going to more expensive. Consumers would get less channels and pay more money.
Every distributor will do deals with us because they believe the best protection I have against cord-cutting is having ESPN.”
This time of year, it seems everybody loves football. The players, the fans, and, of course, the TV executives. And what’s not to like about football if you’re running a TV network, provided you have a deal with the NFL? Check it out, a total of 107 million viewers tuned into games between Thursday and Sunday on CBS, ESPN, Fox and NBC.
So you know the story well by now: Fox Networks’ Fox 5 and My 9 channels have been off the air for Cablevision’s 3 million odd homes in the New York area since midnight on Saturday morning because both sides have been unable to reach a carriage deal. As a result New York football fans have missed a key Giants game versus Detroit Lions (pictured) and could miss more if this continues. As you might expect, the argument between Fox and Cablevision is over money.
from Shop Talk:
It may be the World Cup, but when it comes to sapping productivity in the United States the global soccer tournament still has a thing or two to learn from March Madness and the National Football League.
The U.S. economy might be weak, but the Super Bowl still scores with consumers.
The CBS broadcast of the National Football League’s championship game on Feb. 7 between the Indianapolis Colts and New Orleans Saints should draw strong TV ratings, possibly challenging viewer levels not seen since the late 1990s.
from Shop Talk:
Advertising during the Super Bowl doesn't score for Mazda.
While the Japanese automaker plans to boost its marketing budget this year as it launches the Mazda 2 small car, running TV ads during the National Football League's championship game in February won't happen.
Fox Networks went public today in what it said has been a fruitless nine-month-long carriage negotiations with Time Warner Cable, the No.2 U.S. cable company. It said there is the very real possibility that popular shows like American Idol and NFL Football could disappear from the air if you’re one of the Time Warner Cable’s nearly 14 million customers.