If you are a Comcast cable subscriber who happens to live outside of a Big Ten-affiliated state, you may have noticed a little alert pop up on your Xfinity or TiVo message center on April 11th alerting you to the fact that the Big Ten Network was being removed from your lineup.
I get those messages all the time. In fact, I never read them because a) I don’t care about 95% of the channels that are in my lineup and b) I always assume it is nothing more than a channel reassignment.
It is completely understandable if you missed it, even if you are a college sports fan who has been known to actually watch a game or two every season on that station.
Comcast thought they’d slip one past us last week when they made the abrupt decision to pull the Big Ten Network out of regional network lineups in out-of-market areas. Since almost nothing gets past Twitter these days, you can imagine the results of that poorly thought through tactic.
Even in the era of declining subscribership and cord-cutting, this is a pretty bold move for Comcast to take. After all, we are talking about live sports which, to this day, remain one of the safe havens for viewership and advertising in modern broadcast television. In addition, the Big Ten schools feed employers and graduate schools all over the country. There probably isn’t a Power 5 conference with a higher percentage of distributed alumni than what the Big Ten boasts.
So, then, why exactly did Comcast make this move? Moreover, is this a sign that the PAC 12 Network may be facing the same fate?
The answer to the first question is exactly the answer you’d expect: money.
The Big Ten Networks, prior to April 11th, were carried on all of Comcast’s regional networks. Comcast is actually divided into three divisions comprised of sixteen different regions. While they don’t cover the entire country, Comcast has a total reach of 23 million households.
In short, they are big.
Despite their reach, Comcast hadn’t actually achieved any kind of significant discount from the Big Ten Networks on subscriber rates. The BTN was getting $0.45 per subscription per month from the entirety of Comcast’s base.
BTN’s out-of-market fee is ~0.45 per subscriber per month. Meaning this is still likely a multimillion $$ hit for the network depending on how this carriage battle is sorted out.— Bryan Fischer (@BryanDFischer) April 12, 2018
To put that number in context, here is the going rate for some other sports channels:
NBA TV = $0.30
MLB TV = $0.28
CBS Sports = $0.26
Tennis Channel = $0.15
NPR.org reported on per subscriber rates last year and compiled this interesting chart:
At $0.45, the Big Ten Network was a luxury that even a big company like Comcast simply couldn’t afford in a time when viewership is declining and people are switching to “over the top” (OTT) streaming options.
What is really interesting in this decision is that Comcast apparently didn’t even wait for a contract renewal window to open, or attempt to renegotiate with the Big Ten. This was a cost-cutting business decision made without much warning and without much discussion. The implication being that Comcast has access to data suggesting that the return on investment for carrying the channel wasn’t compelling.
The PAC 12 Network, which we discussed in this space last week, undoubtedly is paying close attention to these developments. Ironically, it is the very deal that they have with Comcast (primarily) that has created the P12N’s greatest challenge: its inability to come to terms with DirecTV.
The #1 provider and satellite company has balked at paying similarly high rates for the PAC 12 Network and getting stuck carrying those costs across a national subscriber base for the very same reason that Comcast just dumped BTN.
Comcast’s decision could well be a sign that the P12N is next. That decision seems less likely for two reasons. First, it does not appear the P12N even has full national coverage through Comcast. Second, the P12N has been offering discounted rates for out-of-market carriage. Per Awful Announcing, we know that the P12N averages just $0.11 per subscriber per month. Compared to BTN, the PAC 12 content is a bargain and, because of its later start times, probably draws as many or more out-of-market viewers for its football games.
The silver lining here is that it is becoming crystal clear that the economics of college sports broadcasting are changing rapidly. The bull market that Larry Scott partly missed out on is over, leaving both content providers and carriers looking for new strategies and new deals.
This could certainly portend that a window might soon open again for the PAC 12 Networks team to negotiate with DirecTV. It might also mean that we might soon seen the sparking of new types of OTT deals being cut between content owners and companies like Amazon, Netflix, and YouTube.
The PAC 12 Network almost certainly has some tough times ahead as it navigates the storm of declining demand and a business restructuring. But this could also be the start of a process that leads to more options and better service for viewers everywhere.