Yesterday, I wrote about retransmission consent and the alarming price increases being asked by local broadcast stations for carriage on cable and satellite systems. However, many other factors are putting more pressure on the rising cost of television today. One question I have received from a number of customers is about baseball's MLB Network. As many baseball fans know, we do not carry baseball's league-owned network. The fact is, the cost of providing sports is rising precipitously, so much so, that it's totally out of control.
More on MLB Network but first some background
It's hard to pinpoint the root cause of the sports-cost problem as there are many contributing factors. First, team owners are paying exorbitant salaries to some players. Second, owners and leagues are realigning and dividing their games on new, narrower networks, charging new rates for new networks without lowering rates for the older ones which are losing the programming. This practice puts tremendous pressure on the aggregator networks like ESPN which has to bid more and more for sports rights. And the networks, new and old, usually insist that distributors place them on widely-distributed tiers, like classic basic or the most basic digital tier. That forces cable and satellite companies to pay for (and, in turn, charge for) the narrowly focused channels for millions of customers who don't necessarily want them.
Simply put, we're losing the battle. When the NCAA teams think about realignment, as some are, they are doing so with one major thought in mind -- How can we make more money from the TV rights? Needless to say, how do they make more money? By making everyone pay more.
We, at Insight, consistently ask for the right to carry new sports networks on a new sports tier. That would give us the ability deliver new channels specifically to those who are interested in them. Unfortunately, we are almost always turned down. As a result, distributors usually are faced with two choices -- take it or leave it.
Technology to the rescue?
MLB Network is a great example of how consumers can get the programming they want without unnecessarily putting more pressure on the cost of cable. To be clear, we would love to carry the network on a basis that would make it available to those who want it without forcing people to pay for it if they don't.
In this case, consumers have a real alternative. Major League Baseball makes every single regular-season game available on MLB.com. However, it's true that watching a baseball game on your home computer isn't exactly the best viewing experience. To solve that problem, consumers can purchase a Roku box (I have one) and then subscribe to MLB.com for as little as $60/year. Using their high-speed Insight Broadband connection, baseball fans can watch thousands of games every season, subject to local blackouts, in standard or high definition picture quality. You don't even have to run wires to the Roku box, your home network will deliver the service to your TV set.
True, it's not the MLB Network itself but, clearly, having access to so many games is a decent alternative. And this story illustrates two major points. First, consumers have choices thanks to the vast capability of high speed broadband connections. And second, networks should give the same options to cable and satellite customers that they give to online customers -- pay for what you want and not for what you don't want.
It's only fair.