MLB In-Market Streaming a Small Step

If you were glancing at baseball news around the internet recently, you might have come across some announcements from MLB Commissioner Rob Manfred. A Forbes‘ article features a headline, for example, that reads “Manfred Announces 3-Year Deal With FOX To Have MLB Games Streamed In-Market“. At MLB’s own website one finds “Streaming deal a huge leap forward for MLB, fans“. Viewing the headlines alone, we might conclude, or at least be hopeful, that this is a really big deal — that MLB is finally getting rid of its blackout policy on MLB.tv, allowing fans to watch their local team without subscribing to an expensive cable television package. Unfortunately, that’s not what’s happening. In-market streaming is a small step towards making baseball more accessible to fans, but does not deal with the principal blackout problems that prevent getting MLB games any way you want them.

In-market streaming, in the iteration announced yesterday, is helpful to fans provided they already pay for a cable service broadcasting their team’s local games. As the Forbes article indicates, the deal is with FOX-owned cable affiliates. Half of the league is broadcast on a cable network owned by FOX, with the other half spread out between other owners like Comcast, Time Warner and DirecTV. While the other networks could reach a deal with MLB, Manfred’s announcement relates exclusively to the FOX-owned properties. In the chart below, the column on the left features the teams whose broadcasts are affected as a result of this agreement, while the column on the right shows teams whose rights are not managed by FOX and are therefore not part of this announcement.

15 Teams With In-Market Streaming for 2016

With In-Market Streaming	Without In-Market Streaming
Atlanta Braves	New York Mets
Cincinnati Reds	Philadelphia Phillies
Cleveland Indians	Chicago Cubs
Texas Rangers	Chicago White Sox
Detroit Tigers	Pittsburgh Pirates
Kansas City Royals	Houston Astros
Los Angeles Angels	Los Angeles Dodgers
Miami Marlins	Seattle Mariners
Milwaukee Brewers	San Francisco Giants
Minnesota Twins	Oaland Athletics
New York Yankees	Washington Nationals
Arizona Diamondbacks	Baltimore Orioles
San Diego Padres	Colorado Rockies
St. Louis Cardinals	Boston Red Sox
Tampa Bay Rays	Toronto Blue Jays

SOURCE: MLB.com

Depending on the cable provider, one might be able to stream games through portable devices if also signed into a home wifi that has also been purchased from the same provider, for example. For the fifteen teams part of this agreement, cable subscribers should have significantly more viewing options. Prior to this agreement, a fan, even if he or she were a cable subscriber and even if he or she paid for MLB.tv, would still be unable to watch games on a cell phone or tablet while located in the home market — nor could could one watch games at the doctor’s office, friend’s home, or while commuting on the train or bus. MLB.tv blacked out the games on own its platform, nor was the local cable provider was providing its own options.

Under this agreement, the local regional sports networks, after authenticating that the viewer is a cable subscriber, will allow fans to watch games on their chosen portable devices while on the go. Likely, fans will be directed to use the FOX Sports Go app that already broadcasts many events under the FOX umbrella. MLB has fiercely guarded the digital rights to broadcasts, and this deal, while a small step for the end consumer suddenly used to having access to sports everywhere, was likely a big decision for MLB. They are ceding some control over how fans access baseball outside of the television screen. In exchange for this concession, MLB will be receiving 4% of the team’s cut of the local television deal, per Maury Brown of Forbes.

Smaller deals like this have been a precursor to major changes. A few years ago, HBO unveiled HBO Go to cable subscribers of the channel, allowing those who already paid for HBO to access programming on portable devices or through set-top boxes hooked up to their televisions. Since that time, HBO has followed up with HBO Now, a service that allows customers to completely bypass cable if they so choose and simply pay a monthly fee directly to HBO for its services.

An HBO-like service is not likely to soon be offered due to the cable bundling system in which regional sports networks are involved. At HBO, the price subscribers pay for HBO through their cable provider is roughly the same as buying the digital package driectly from HBO. Unlike HBO, regional sports networks that air baseball games are not specifically chosen for purchase by the consumer. They are bundled by the cable providers into one large package, and the fee that networks charge (usually $3-$5 per month per subscriber) is passed along to the consumer by the cable provider. This practice is the lifeblood of regional sports networks. If they can get all cable consumers to pay for their channel, they can charge a relatively low amount. If cable networks went purely to a subscriptions service or even to some hybrid, they would need to charge significantly more for the digital subscription to make up for the lost consumers. This is why the MLB’s blackout policy, which is similar to the NHL’s, exists — although is entirely different from the NFL’s old blackout rule.

The NHL, now in partnership with MLBAM, has a package similar to MLB.tv that costs a bit over $150 per year, and after a lawsuit, they actually made available a one-team package for around $100 per season. However, even this one-team package is subject to local blackout policies. Like in baseball, the only way to watch your local team at home within the the conifnes of the law is to purchase a cable package.

The NFL got rid of its blackout policy before the season, but the NFL’s policy stemmed from worries that people would not attend games if they could watch the game at home. MLB.tv has a local blackout policy due to worries that if people could access local games through an MLB.tv subscription, then they would not subscribe to cable or would otherwise lessen the demand for the regional sports network as part of a cable package. As that cable package is currently fueling the high local rights deals for MLB teams, the blackouts that regional sports networks demand will remain absent a significant shift in the cable model. Cordcutting is happening, but the drop in cable subscribers would have to be massive to necessitate a change from the current model and that is not likely to happen in the very near future.

In-market streaming is a small victory for those who already subscribe to cable and have a local team broadcasted by a FOX-owned cable channel. They will have expanded options to view games, and the games will be much more accessible outside of the home. The move could be a precursor to a direct subscription model, combining the best of HBO Now and MLB.tv, but due to the current cable model, this move is more of a small step than a drastic change for baseball fans.