Dreaming Up a Super Premium MLB.tv Package
Blackouts suck. We don’t like them. This isn’t news. What is news is that Major League Baseball is driving hard to get the ball rolling on lifting blackouts, potentially for good. Yesterday, Maury Brown laid out an idea for this over at Forbes. And as it turns out, the league is trying to execute just such a plan.
The plan, in case you don’t feel like clicking both links, involve the league getting its biggest media partner, FOX, on board with streaming games. Brown notes that 37 percent of all games last year were shown via FOX regional sports networks (or RSNs). That’s a pretty huge chunk. Comcast checks in next at 17 percent. That gets you up to 54 percent, and then it is drips and drabs from there. While a big network like FOX might be able to unilaterally make these moves, there is going to be a couple of sticking points. The first, as Brown notes, is who exactly gets to stream these games? Obviously MLB wants the exclusive rights, since they have a decade-old product that people know and love. FOX doesn’t appear to see it that way, and it’s hard to blame them. That really rolls up into a second sticking point, which is cost.
In thinking about this the other day, I postulated on Twitter about the creation of a Super Premium MLB.tv package. The theory goes, essentially, that you would add to the normal $130 cost of an MLB.tv Premium account in order to get a service that would solve your blackout problems.
The Plan
Each cable company charges a carriage fee for carrying it. We know that last year, NESN — which is owned jointly by the owners of the Boston Red Sox and Bruins (though mostly by the Red Sox) — charged as much as $4.22 for its carriage fee. As a long-running RSN, with a very dedicated fan base, that is probably close to the top of the food chain. ESPN, which charges the largest carriage fee, charges less than two dollars more than that.
Continuing to use NESN as the example, when we multiply that over 12 months — 12 rather than six since NESN charges the carriage fee every month and not just during baseball season — that comes out to a high end of $50.64. Let’s call it $50 for simplicity sake. So, the plan would be to say to MLB.tv subscribers who live in the Red Sox territory, and can presumably get NESN as part of their basic cable package, that if you want a version of MLB.tv with no Red Sox games blacked out, you can get that for $180. During commercials, instead of the six or seven MLB.tv ads you normally get ’til you have them memorized, you would get the normal NESN ads, with the MLB.tv ads spliced in every now and then in place of a NESN house ad (which, as any Red Sox fan will tell you, are plentiful).
Doing it this way satisfies a number of things. First, NESN doesn’t need to lose money on carriage fees. That’s huge, since carriage fees are essentially the way these networks stay in business. Second, it wouldn’t hurt ad rates during games — the customer base would be the same, they’d just be watching on different mediums. Theoretically, that shouldn’t change much, except maybe ads with small words in them would need to be rethought if they want to impact customers watching on smaller mobile devices. Not a huge deal, as advertisers should already be taking this sort of scale into account. It would also allow MLB.tv to recover a modicum of revenue from the few ads that they sell each season (not that they need that money, or can’t find a way to get it in some other fashion).
The best-case scenario for the RSNs, of course, would be to have that loyal consumer who not only buys the super-premium MLB.tv package, but also doesn’t cancel their cable package. Going back to NESN, they show a lot more than Red Sox games. In fact, the actual Red Sox games only make up a tiny portion of their programming each year. Less than half, certainly. They also show Bruins games, Hockey East college hockey games, and a number of other live sporting events, as well as long-running shows like Charlie Moore Outdoors. So, there is a chance that a lot of consumers, even if given the option to purchase this super premium MLB.tv package and get rid of cable, wouldn’t actually get rid of cable. That’d be sweet, because then the RSN would be double dipping the carriage fee, and could maintain their customer base for ads that run during all the non-Red Sox game-times. And if the NHL or NBA worked out similar deals, RSNs could be triple or even quadruple dipping, depending on the teams that play on that particular RSN.
Drawbacks
There are a number of drawbacks. The first is the aforementioned ad rates. In talking to Nathaniel Grow, our resident sports business expert, he mentioned that the RSNs probably aren’t keen on being able to say that their customer base has shrunken dramatically for all those times when a live baseball game isn’t being played. So that’d be an issue, and the number one reason why the cable companies or RSNs might force you to keep your cable package as a part of any agreement between MLB and FOX. That would not alleviate the problem for people who are blacked out of a specific team without having the opportunity to watch them on their local cable package.
Another drawback is that this plan is, as Homer Simpson would say, needlessly complicated from MLB and MLB Advanced Media’s perspective. While it might be peachy keen for the RSNs to sit back and collect stacks on stacks on stacks on stacks, MLB would be put in the position of expending energy on a product that sees the revenue split between it and its partners. And what of the total cost? Sure, Red Sox fans could justifiable have to pay an extra $50, but what about Astros fans, whose RSN hasn’t been able to get on the air and whose viewership is going to be much lower given all the tanking the Astros have done the last few years. In other words, should the package cost a different amount for each team? Or should they set a price based on the most expensive market and go from there? There’s no easy answer, and there would undoubtedly be some headache-inducing accounting issues, at the very least. For RSNs that are owned by a team, it wouldn’t be as big of an issue, since the league already has relationships with the teams, but it would still require a lot of logistical thinking.
Still another issue is for the fans with overlap, be it geographic or otherwise. A couple of examples. Say you live in New York, and are accustomed to watching the Mets and Yankees on TV. Now under this plan, if you want stream both blackout free, you can, but you would be in the position of having to buy a super-super-premium package, where you pay to eliminate blackout restirctions for both teams. Is that fair? Or, say you live in the Chicago area, and you as a Cubs fan married a White Sox fan. Do you want to pay for the privilege to stream both teams blackout free? Perhaps there is a compromise, but that seems unlikely.
The extreme version of this, of course, is areas such as Las Vegas and Iowa, where as many as six teams are blacked out. Do you pay to alleviate all six blackout restrictions, in a package that could end up being close to $400, or do you simply pick the one team you want to see and live with the blackouts in other areas? That is, of course, if MLB allows such options. Which, as we mentioned above, just might not be in the cards.
…
Baseball fans don’t like blackouts, or anything else that restricts their access to the game, and these sometimes artificial restrictions are as old as the game itself. That is unfortunate. What is encouraging though is that the league is working on the problem, and has generally been at the forefront of digital streaming in sports — so much so that their technology is used as the “backbone” when companies and leagues make streaming products. So while we may have to pay for the privilege, hopefully the blackout restrictions will be solved soon, say the next five-10 years. Whether it’s a super premium package like what I have suggested here or something else, the initial solution probably will be messy. There are a lot of cable companies involved and a lot of money at stake, and so a clean solution seems unlikely right from the jump. And of course, none of this addresses what is the ultimate problem — the territory rights and how they can be resolved. But that is for another day. This reported agreement between MLB and FOX is a nice first step. Hopefully we’ll see more steps soon.
Paul Swydan used to be the managing editor of The Hardball Times, a writer and editor for FanGraphs and a writer for Boston.com and The Boston Globe. Now, he owns The Silver Unicorn Bookstore, an independent bookstore in Acton, Mass. Follow him on Twitter @Swydan. Follow the store @SilUnicornActon.
While we’re dreaming, can we add hit f/x and the new trackman system to the super premium package? Thx.
When is MLB going to broadcast the Caribbean Series?
Use Hola unblocker browser extension. It’s free and allows you to spoof a location. It’s kinda janky but it’ll work until MLB lifts blackouts
This. Can confirm it works well.
apple computer w/Hola Chome extension + appletv is a wonderful thing. I can airplay stream all games, regardless of blackout to my TV. MLB.tv thinks my location is in Bournemouth UK.
Why Bournemouth?
As a MLB tv user in bournemouth uk this made me laugh
Your new avatar takes your username to a whole new level of inspiration.
Thank you for this!
Anyone know if this works with the Roku or Kindle Fire? I rarely watch mlb.tv on a regular computer, but living in Charlotte, I’m blocked out of teams that I can’t even watch on regular cable (Nats, Orioles, Reds, etc).
Dream continues with freaking Caribbean Series and other winter ball action. Live. It’s already televised on DR, Mex, Venezuelan channels, etc. so why can’t MLB pay for the feeds and have a rum-soaked Kiley McDaniel announce over them?
ESPN Deportes has it, and I am betting they have exclusive rights
Paul: During the 2011-2013 seasons, cable subscribers in NYC were able to purchase for $50 the add-on ability to stream Yankee games on the YES Network (not the 20 or so over the air games), essentially what you are describing here. For some reason this option disappeared in 2014. Can you shed any light on how this arrangement was initially structured (i.e., who got the $50?) and why it was discontinued?
As an Expos fan, I hope this ends the decade long blackout on all of their games.
I guess we’re waiting out Tampa Bay. Fingers crossed!
As an Iowa resident who has also cut the cord this proposal doesn’t appear to help me in any way. The 2nd Forbes article states that the blackout would only be lifted after authentication with your pay TV provider. I think MLB runs the real risk of losing a generation of fans as more and more young people get rid of cable.
Exactly. I’m a Braves fan who cut the cord, and I won’t buy MLB.tv because my team would be blacked out even though I live 3 hours from the stadium. They won’t get me back until they recognize that they will increase viewership by allowing non-cable customers to get “local” games streamed. The internet is bringing a la carte video over cable’s dead bodies.
I’m a Blue Jays fan who is blacked out even though I live a 4 hour flight away. Given that unblockus costs $5 a month and lets me stream Jays games, I would be fine to pay an extra $50 to MLB instead to get this right.
But think of all the pats-on-backs they can give themselves for “addressing” the blackout issue!
This is the Corporate Machine at its finest, selling you fifty-dollar turds while waving a Snickers ad under your nose.
And laughing their asses off.
I was waiting to hear the Iowa chime-in. Hours and miles from anywhere and blacked out for 6 teams. I think your only hope is to get a VPN. I find with most things the the paid solution is an inferior product that allows me to do less of what I want.
You get adds on your MLB.tv? I don’t see a single one while watching through my Roku.
Yeah if you watch it on a laptop (and i think on the ipad?) you get ads. Not sure why Roku and Playstations and such are exempt.
I watched a ton of games last year on my PC, and a few on the iPad, and never saw an ad. I wonder if it’s specific to the deal MLB makes with the provider (these were all ROOT Sports/Mariners games).
Huh. Or maybe MLBAM is just toying with my emotions!
Not just you, Paul. I got ’em all the time on two computers, but never saw a single ad on my Smart TV.
Last year I had some ads on my PS3. They would only appear erratically though.
I am pretty sure that you don’t get ads on Roku or Playstation because they’re typically played on TV’s. Due to the byzantine rules and contracts done that differentiate between internet on a monitor vs. a TV (which is a pretty fuzzy distinction these days), I don’t think MLB TV is allowed to show other people’s ads.
Which is really a shame, because I sort of had a love/hate with the “local access TV” quality shorts that would play 3 times on loop for every commercial, but those went away. “Hey ump!” (intro to umpire school commercial) or “Mini-Soda Twins! Geeter!” (official MLB swag ad)
Blue Jay games used to be blacked out everywhere in Canada, starting last year we got them all on MLB.TV.
Is this real? Why did I not know this?
yup, I didn’t have a cable account either
Ssssshhhhhh!
it wasn’t a mistake, Rogers has the MLB distribution rights for Canada, they pocket money either way
For real? I am such an idiot.
Are you a Rogers customer? I had MLB.tv and I’m with Shaw and Blue Jay games were blacked out for me.
If we’re going to improve MLB.tv, how about we start by shutting off the “automatic renewal” that kicks in two months before the season starts. I finally remember to cancel my renewal in time this year.
Thank you for reminding me to deal with that. I greatly appreciate it, kind sir.
How about this?
Those living in multi-team/multi-blackout markets must choose a primary team at full price, but get the option to add a second (or more) team for an extra $50. Then your Cub/Sox couple would be happy- even when visiting family in Iowa.
For the blackout overlap markets – if you only pay to lift Cubs games you will still be blacked out for Cubs v Cardinals. Just figure out a standard rate to lift all blackout, brah.
I think the assumption is that if you pay to lift the blackout for the Cubs, you get all of their games, even if they’d otherwise be blacked out. I mean, this is make-belief, so why not?
I’ve gotten this for years as a DC resident Braves fan. The only blackouts I have are Orioles (rarely play) and Washington (I go to the games at Nats Park, so really it is 9 games a year I don’t get).
If I lived somewhere with 6 blackouts, I’d probably not get it. They must be losing money because of this.
I think content owners like HBO (and increasingly netflix and amazon and comedy central) streaming their content will put pressure on cable companies and they will be forced to work with MLB.tv to get their revenue. The real package I want to buy is the ability to stream all of my team’s games for $100. I don’t really care about watching other teams. $100 is enough for mlb and the RSNs to both make more.
This right here. There’s little financial benefit to me, as the consumer, in paying something like $180 for six months of baseball considering playoff games can be gotten OTA.
I think this pressure will have (and has had) the opposite effect. Netflix and Amazon are better than cable in nearly every way, but sports pretty much need to be watched live. This is the one thing that cable companies have that is guaranteed to bring in viewers. They will milk it for all it’s worth.
I think this issue is indirectly referenced here, but the one of the main roadblocks for this sort of thing is the revenue that RSNs and teams get from non-fans. RSNs are able to negotiate high carriage fees on the one hand because they can persuade local fans to pay (or keep paying) for cable. Their exclusivity allows them to deliver customers to the cable companies, or at least to tip the scales in the cable co’s favor. On the other hand, the RSNs benefit from their channels being placed in the basic cable tier, because then everyone who subscribes to cable pays for them.
So if the carriage fee were only paid by fans then it might be 3 or 4 times as high.
HBO can move their content online (outside of the cable co system) without facing this issue because the people who pay for HBO are mostly people who want to pay for HBO. It’s generally not foisted on people who don’t want it.
Glad that someone gets the point of carriage fees here. It’s not to get $4 from every fan, it’s to get $4 from everyone, and the non-sports fans are effectively subsidizing the sports fans. A la carte would mean higher fees per viewer.
But they are getting $4 from an increasingly small number of people. Sports, especially baseball, are one of the few things holding people in cable tv packages.
If the tend continues for long there won’t be many non-sports fans “subsidizing” anything. And I put subsidizings in quotes because thats not an accurate description. Cable companies and sports broadcasts aren’t reducing the costs of watching baseball by putting baseball on a RSN. If fact it’s exactly the opposite. Watching your local team used to be free and was broadcast over the air.
They are only doing what they are doing now because it makes a ton of money, not because the fans are somehow getting a better deal with subsidized viewing. That’s a f-ing joke. We fans are getting bent over and reemed.
Despite cord-cutters, cable/Dish/etc subscribers are still around 95-98% of their peak.
When TWC reports a loss in subscribers, typically it is more people switching to another similar service [Dish, FiOS, etc], a service using roughly the same carriage fee model.
It’ll take decades, not years, at current rates for the cord-cutters to make a significant impact.
—
“So if the carriage fee were only paid by fans then it might be 3 or 4 times as high.”
http://www.breitbart.com/sports/2013/07/17/espn-a-la-carte-30-dollars-a-month/
That puts a top tier network like ESPN at 5x and I’ve seen estimates [can’t find link now, think it was forbes.com] that put nets like AMC at 20-30x their current prices.
http://www.theatlantic.com/business/archive/2013/07/how-watching-unbundled-espn-and-amc-could-cost-more-than-your-whole-cable-bill/277916/
Found that link… they estimate AMC going from $0.27 to ~$10, very nearly 40x the price.
TBH, if for what my bill costs now I could choose to get everything I do [and not watch most of it] or just get SNY, USA, TNT, AMC, FX, Discovery, Nick and Disney and **maybe** save a couple of dollars a month tops, I think I prefer to just have everything.
I don’t often watch ESPN, but it is nice to have fr the occasional Mets game [wife likes Duke Basketball and gets some of that there]. I don’t often watch TBS or Food or HGTV or SYFY, but I imagine I would miss not having the options [without plunking down extra cash just to try a show on one of those]
Eric,
Maybe a decade would be a better time line. We don’t need cable cutters to get to 100% in order to completely dismantle the cable industry as we know it; 25% would probably do the job. Also, shifts in technology rarely occur in a linear fashion. Look at the smart phone revolution, or tablets. Once something makes a certain break through, it often sweeps through the population at a rapid pace.
Also, bringing up ESPN is a bit of strawman here. We might be able to count on one hand the number of people that watch more than 1 hour of ESPN a week that regularly frequent fangraphs. I wouldn’t pay $1/month for ESPN. In fact, that’s a huge reason why I cut the cable. I don’t want ~$30 of my cable bill going to crap I don’t watch. My kids watched Disney, Nick, etc, like it sounds your kids do. But ya know what, there is a ton of free or nearly free programing for kids available once you switch to something like a Roku or Apple TV. Regardless, on ESPN’s a la carte pricing, no one gives a rip what the carriage fee is. That won’t set the price. Once people step outside their cable TV packages and have the choice to buy what they want on the open market, how many would really choose ESPN at $30/month? Probably not enough to justify such a large price tag. ESPN insider isn’t even $10/month. Why do we think individuals would actually specifically choose ESPN for $30/month?
In short, those links you posted make one huge and very suspect assumption, that carriage fees in bundled contracts accurately reflect what price points that would be set on the open market. Or that somehow we have to force that ESPN would get the same amount of money from a la carte sales as they do from carriage fees. BS. Nothing says they’d have to make the same amount of money.
Unless there is a way to make the Braves appear as a better team, my dream super premium package won’t work.
In the case where a user is not paying for the local RSN, but wants to stream regional games, this Super Premium Plan makes sense, because the RSN is essentially getting cut out of the business. If you already paying for both the local RSN and MLB.tv, then this makes no sense whatsoever. Why would you have to pay extra to stream regional games, when MLB.tv could just show you the RSN’s commercials while you are in that RSN’s region and have proven that you subscribe to that RSN?
As someone who doesn’t get to watch a ton of games anyway, I wouldn’t mind an a la carte option of $5 per game, pay-per-view style streaming – sans black out restrictions.
Paying per game was an option when MLB.tv started (first year only? Part of the first year? I don’t remember exactly). It was disappointing when they dropped it, although I’m pretty sure it did have blackouts.
I would think that some sort of flat fee could be worked out nationwide. It would take into account the various different RSN carriage fees, their expected audience size, etc… then MLBAM would pay out to the RSNs based on actual usage (e.g. Not all six Iowa blackouts, but each in a portion based on what games are acutally watched)
In 20 years the cable companies will be just ISPs and everyone will be watching their TV a la carte via streaming.
If my friend’s antitrust lawsuit succeeds, every MLB.tv account will be sans blackouts.
http://deadspin.com/mlbs-awful-blackout-rules-are-finally-under-attack-in-c-1683259431
How about…
I am a lifelong resident of Fairfield County, CT (which is in NE, of course). I used to get NESN, including Red Sox games, through DirectTV. It was very nice.
Then one season the blackout rules magically changed and NESN would go dark during Red Sox games. I hadn’t moved. The Red Sox hadn’t moved. I lived in F***ING New England! And yet, no Red Sox for me, because A**holes.
So maybe MLB owes it to us to just give us the dang games. They make enough money, and MLBtv has plenty of worthwhile features. I’m sick and tired of not being able to get the games on TV at home, and then not being able to watch a big game on my computer at work (located only 10-15 min from home) through my MLBtv package. It’s all a bunch of c***.
I think I got the F and the A, but slightly confused as to what C word is being referenced there.
You live about as close to NY as physically possible in CT and you are surprised that you are not in the RSN of a team 4 hours car ride away?
The problem with this is it ignores the RSN contract with the cable companies who pay them the carriage fee. Anything that reduces demand for cable will reduce the future carriage fee across the board, which would offset what they receive from mlb.tv
Manfred said they would be looking for a strategic partner for their operations like mlb.tv. I wonder if it might be one of the big cable companies. Verizon, AT&T, Time Warner, Comcast (reverse order of subscribers) or one of the cable networks like ESPN or Fox
Google.
I kind of think one year Google will just throw down a few billion and buy all the NFL rights and give streaming games away for free for the first year when you sign up for their new internet service. They’ll destroy the revenue models of a few networks and cable companies and break the industry open for them to effectively compete. Who knows, maybe they’ll start small and experiment with the MLB!
If you put your home network on a high speed VPN (I use unblock-us), you can stream MLB.tv without blackouts or commercials on your Roku or Apple TV. Pretty slick..
What do you use to get it to the roku?
“Just pay more”
No, no, no, no, no.
No.
The last few years of the Expos, their games weren’t blacked out on MLB.tv even in Montreal. Of course, that’s because they didn’t even HAVE a TV deal. So, I mean, if all of your teams decided to no longer have a TV deal, that’d be a way to avoid blackouts.
Not going to work unless:
1. MLB requires everyone to pay a higher fee to include all games.
or
2. MLB figures out a way to make more money off MLB.tv (banner ads, for instance) and doesn’t pass the cost on to the consumer.
Otherwise, the average person is savvy enough to Google “MLB.tv blackout workaround” and follow the instructions.
Last year they started blocking many people using VPNs. They also started requiring GPS info from mobile devices which made VPNs pointless. My Google search seems to show many people with the issues. What ways did you guys use to get around these? Is it pretty much unblock us and stay away from using anything on your mobile devices to avoid being flagged? Sounds like cell phones are pretty much out of the question now if you are using cellular data.
Not a mention of the Los Angeles situation? Time Warner holds exclusive rights to broadcast the Dodgers in So Cal and several hundred miles around. They are trying to leverage customers into dropping their existing companies and instead subscribing to TW. Problem is…Time Warner is not available to 70% of Southern California! Vin Scully has no access to Dodger games in his home, for crying out loud. The Dodgers sit on their hands and count the money TW paid them and do nothing. So Cal sports fans can’t get the Dodgers on MLB, even paying extra for the premium package. They can’t be seen in Las Vegas, even. We’re talking about the 2nd largest market in the country!
How about a 360 application that actually works?
The situation in Iowa is bad enough, but the fans who really get hosed are Pirates, Reds, Tigers, and Indians fans. As a Bucs fan in Iowa, I am blacked out of 68 Pirates games this year. And MLB wants me to pay $50 MORE per team for the privilege of watching the Pirates play the Cards, Cubs, and Brewers 19 times each, four with the White Sox and Twins, and three with the Royals? Of those six teams, only the Twins RSN is on local cable.
MLB, the individual teams, and the cable companies need to work something out to solve the problem of territory rites. I just don’t understans who is helped in this situation. The teams aren’t helped, as it doesn’t allow them to market their product. As I mentionrd, in this part of Iowa, you CANNOT watch the Cubs, White Sox, Cards, Royals, or Brewers, unless you get DISH or DirecTV. Many people aren’t willing to do that. It certainly doesn’t help fans of those teams. It doesn’t help the RSNs, as they aren’t on cable in the first place. And, it doesn’t help the cable companies.
Yes! The whole thing is a joke but It’s even worse that the territory rights aren’t consistent across mediums. According to MLB.tv, here in Hawaii we’re in the broadcast region for every West Coast team. The Mariners, Giants, A’s, Angels, Dodgers, and the Padres. However, if I subscribe to DirecTV, I don’t get the RSN for the Mariners. To watch their games I have to get the Extra Innings Package. So, according to MLB.tv, I’m in the Mariners broadcast region, but according to MLB/DirecTV I’m not.