VS President on 670 The Score

[Jimbo]

Just 7 games, eh?

So you don't think the Wings are going to make the playoffs this year?

Sure, but I expect this VS / D* issue to be done before the playoffs, VS has too many hockey viewers they would be missing to NOT have a settlement.

And YES, if it moves to the Sports Pack, I will watch the playoffs on the local FSN Detroit till they are done .... the final series I believe is on NBC, like it was last year.
If not, oh well, a great way to lose more hockey fans .... gotta think the NHL will step in at some point.

There is no reason for D* to have to move it from where it is to an exclusive package.

 

[SpaethCo]

Sure, but I expect this VS / D* issue to be done before the playoffs, VS has too many hockey viewers they would be missing to NOT have a settlement.

Either that, or the majority of the hockey fans will have left D* by the time the playoffs roll around.

If not, oh well, a great way to lose more hockey fans .... gotta think the NHL will step in at some point.

The NHL has even less of a play here than customers do. What leverage do they have? Settle with Versus or we'll take away Center Ice? The league can't play that game. Cut a deal with DirecTV that undercuts their broadcast partner that gave them a huge chunk of cash when ESPN hung them out to dry? They can't play that game either. The NHL really has no play other than to push PR pressure on DirecTV, which they are already doing.

There is no reason for D* to have to move it from where it is to an exclusive package.

It's all about money. Moving it to the exclusive package means fewer subscribers which means lower programming costs, and the Sports Pack has higher margins which means greater profits. Meanwhile Versus comes out with lower subscriber fees and lower advertising revenue.

The big equalizer will come if this NBC / Comcast deal goes through. With NBC owning the bid for Olympics coverage, this will almost certainly mean Olympics coverage on Versus. At that point it's checkmate for DirecTV.

I have no love for either company, but DirecTV is the bigger weasel in this whole dispute. If DirecTV gets their way Versus loses money and D* customers end up paying more to get what they already get today.

 

[cfb]

DirecTV is the bigger weasel in this whole dispute

Comcast has announced that they're discarding the "Comtastic!" slogan in favor of "Comcast...we're the smaller weasel!"

Rather than examining weasel size, I think what we've experienced between the NFL/Comcast and Comcast/Directv situations is that someone isnt a particularly good negotiator and relies on walking away from the table in hopes of upping the ante.

Theres a common participant involved in those two situations. They dorked around over the NFL network thing for almost a year and ended up about where the NFL wanted things in the first place. From where I'm standing with little vested interest, I think Comcast will end up getting less than what was probably initially laid out at the bargaining table.

Probably a result of being inexperienced as a content provider and management thats used to playing in a monopoly or near monopoly situation. I worked for a company that was for all practical purposes a monopoly, and it certainly breeds a huge grouping of management folks who feel that they must be geniuses given that everything is going so well...

At the end of this, I would imagine that VS ends up on the sports tier at the same approximate subscriber rate as last year, or in the choice extra tier at a much lower price than last year.

 

[SpaethCo]

Rather than examining weasel size, I think what we've experienced between the NFL/Comcast and Comcast/Directv situations is that someone isnt a particularly good negotiator and relies on walking away from the table in hopes of upping the ante.

Theres a common participant involved in those two situations.

Right, Comcast is the only content provider in the history of TV that has ever had a dispute where channels got pulled. Lifetime was never off Dish, Viacom channels were never off Time Warner, and no other channel has ever been pulled from PayTV providers when Comcast wasn't involved.

They dorked around over the NFL network thing for almost a year and ended up about where the NFL wanted things in the first place. From where I'm standing with little vested interest, I think Comcast will end up getting less than what was probably initially laid out at the bargaining table.

The NFL network wanted to be in the basic tier at a premium price, Comcast wanted to put them in the Sports Entertainment tier at the premium price, or in the basic package with a significantly reduced cost. Where did it end up? In the Sports Entertainment tier, right where Comcast wanted it.

At the end of this, I would imagine that VS ends up on the sports tier at the same approximate subscriber rate as last year, or in the choice extra tier at a much lower price than last year.

If it ends up in the Sports Pack everybody loses but DirecTV. Customers have to pay more, Versus gets fewer subscribers. DirecTV's sole motivation here is to improve their financial situation, and I honestly believe they're prepared to lose perhaps as many as 100-150k customers over this.

Again, the game changer is if Comcast buys NBC. Once Versus gets their hands on exclusive Olympics content it's game over and DirecTV has to cave. If DirecTV is smart they'll read the situation and get and agreement before the situation becomes irreparable.

 

[cfb]

Right, Comcast is the only content provider in the history of TV that has ever had a dispute where channels got pulled. Lifetime was never off Dish, Viacom channels were never off Time Warner, and no other channel has ever been pulled from PayTV providers when Comcast wasn't involved.

I didnt say that comcast is the only bad negotiator in the history of television.

In the Sports Entertainment tier, right where Comcast wanted it.

Hmm...around here its in the regular digital tier, right where the NFL wanted it. Perhaps YMMV. The Red Zone channel is in the comcast sports tier, but I thought the final agreement was for comcast to put it in the regular non sports package and for them to pay a little less than what the NFL wanted, but more than what comcast wanted to pay.

If it ends up in the Sports Pack everybody loses but DirecTV.

Well, maybe. I suppose if the majority of directv customers who dont watch VS dont have a rate hike then they'd 'win'.

DirecTV's sole motivation here is to improve their financial situation, and I honestly believe they're prepared to lose perhaps as many as 100-150k customers over this.

I dont disagree with your thesis on their motivation and i'm not defending or supporting directv. Just noting that it appears that Comcast isnt doing that well in negotiating carriage deals and that directv appears to hold a lot of the negotiating cards in these situations, just like the NFL did.

Again, the game changer is if Comcast buys NBC. Once Versus gets their hands on exclusive Olympics content it's game over and DirecTV has to cave. If DirecTV is smart they'll read the situation and get and agreement before the situation becomes irreparable.

Its hard to say. I'm thinking that at some point the government is going to require these guys to separate the content provider piece from the transmission to customer piece. Too much opportunity for 'harm' to the public when these idiots cant come to an agreement. Competition when its between two companies with similar product or service offerings is one thing. Competition where one is withholding a unique product or service like the olympics, an entire sport like football or hockey, etc is a different matter.

 

[Big Dawg 23]

Either that, or the majority of the hockey fans will have left D* by the time the playoffs roll around.

I think you will find out very few will leave. Most people thinking of leaving have called and complained to Directv. End result were one time credits on Center Ice, Complete Credit on Center Ice credits or Credit for set dollar amounts for the loss of Channel.

In the end Directv will probably not be impacted to much financially. Mean while it hurts Comcast, VS and NHL for lost of viewership and ad revenue. The Complaints by PBR and WEC Presidents won't impact Direct stance. Look at the recent WEC, which said Viewer ship was 413,000. That is 2.2%(413,000/18MIL Subscribers) of all Directv Customers watch the channel if they still had it. This means NO ONE watches.

 

[SpaethCo]

Well, maybe. I suppose if the majority of directv customers who dont watch VS dont have a rate hike then they'd 'win'.

If anything in this dispute gets me angry, it's the propaganda that DirecTV is pushing about the rate hike. They've spewed comments like this in their letter to subscirbers:

We're not happy about this, but we hope you understand that we must hold the line on programming costs in order to protect our customers from unwarranted price increases in this difficult economic climate.

When my friends with DirecTV called in to complain about Versus they were told by the CSRs that if they had given in to Comcast their bill would have to go up $5/mo.

First off, we're talking about the same DirecTV that unilaterally increased package prices by $3/mo back in March, citing "increased programming costs." Not all of their contracts were up for renewal this year, so many of their prices remain fixed. Second, it has already been publicly reported that the offer on the table involves NO PRICE CHANGE. But for a second let's take DirecTV's version of the story -- Comcast demanded a 20% increase. On a channel like ESPN that costs $3.50/mo or TNT which runs about $1/mo per subscriber that could be pretty significant -- Versus costs less than $0.30/mo per subscriber. So if it were a 20% increase, we'd be talking 6 cents or less. That's not even remotely close to the $5 BS they were spewing when my friends called in to complain.

So let's say this dispute goes into next year. Does anyone really think that DirecTV won't push another price increase in March 2010?

 

[Jimbo]

So let's say this dispute goes into next year. Does anyone really think that DirecTV won't push another price increase in March 2010?

There will be a price increase in March REGARDLESS, that price increase has nothing to do with the VS dispute.

Prices go up 3-5 every year ...

 

[cfb]

Hmm, I could have sworn there were quite a few years without a price increase, and I thought there was even a run of 5-6 years where prices stayed the same.

I'm quite sure this little squabble has more to do with stupid sparring than costs. I think I also saw something yesterday that said only ~2% of directv's viewers watch VS. Maybe they just want to drop the channel and are using the negotiations as an excuse.

 

[SpaethCo]

I think I also saw something yesterday that said only ~2% of directv's viewers watch VS. Maybe they just want to drop the channel and are using the negotiations as an excuse.

DirecTV has been using the viewership numbers from August. The month with no bull riding, no college football, no Tour de France, no Indycar, and no hockey.

Still, what's an acceptable number to make people pay for? Certainly there are channels that are less popular than Versus that are still getting our collective subscriber fees. Even ESPN doesn't reach 25% -- on October 6th ESPN hit 21.8 million viewers for Monday Night Football -- the most viewers in cable history.

ESPN charges cable and satellite operators an average of $3.65 a month per subscriber, the most in television, according to SNL Kagan, a research organization. Multiply that by 98 million subscribers, over 12 months a year, and ESPN’s financial armor adds up to $4.3 billion.

Sources: http://www.nytimes.com/2008/11/25/sports/ncaafootball/25sandomir.html?_r=1
20 Cable Networks To Reach 100 Million Subscribers By Year End - TV Ratings, Nielsen Ratings, Television Show Ratings | TVbytheNumbers.com

So the most ESPN has ever pulled for viewership is 21.8 million people, yet 98 million people are contributing $3.65/mo to have access to the channel. By my math that's 76.2 million people paying $3.65/mo for a channel they don't watch!

Versus isn't doing nearly that volume, but they hit 3.45 million viewers during their broadcast of the Stanley Cup playoffs. The channel is (was) available to about 75 million people, so that means that 71.55 million people are paying less than $0.30/mo for a channel they don't watch.

Out of a channel package of 200-250 channels, people generally only watch a handful of channels. The argument that always gets made here is: ala carte! People couldn't afford ESPN if only those who watched the channel wanted to subscribe to it; they'd need the same supporting revenue they're getting from 98 million people to maintain the quality of the broadcasts and they'd have to get that from 20-25 million folks. Networks like Lifetime would fold without enough viewership to support the channel.

The system isn't perfect by any means, but I don't think there are any obvious ways out from it.

 

[Jimbo]

Hmm, I could have sworn there were quite a few years without a price increase, and I thought there was even a run of 5-6 years where prices stayed the same.

I'm quite sure this little squabble has more to do with stupid sparring than costs. I think I also saw something yesterday that said only ~2% of directv's viewers watch VS. Maybe they just want to drop the channel and are using the negotiations as an excuse.

IF D*'s prices stayed the same, I don't remember them, maybe that was before they decided they could do it EVERY year .... UGH.

This year and the next few would be nice for them to show some recourse to the economic situation.

Jimbo

 

[cfb]

My recollection could be faulty, but I could have sworn that from ~1997-2000 they had nothing in the area of a significant price hike and from 2003-2007 the prices were pretty stable too. Certainly a lot better than cable pricing, because my dad was getting crazy rate hikes every year and I kept telling him I'd been paying the same thing for a long time.

The month with no bull riding, no college football, no Tour de France, no Indycar, and no hockey.

So what they should have tried to boost viewership is a college football player riding a bull on ice through a bunch of bike riders, and then all of them wiped out by a race car. Heck, I'd watch that.:up

 

[Big Dawg 23]

DirecTV has been using the viewership numbers from August. The month with no bull riding, no college football, no Tour de France, no Indycar, and no hockey.

Still, what's an acceptable number to make people pay for? Certainly there are channels that are less popular than Versus that are still getting our collective subscriber fees. Even ESPN doesn't reach 25% -- on October 6th ESPN hit 21.8 million viewers for Monday Night Football -- the most viewers in cable history.

Sources: http://www.nytimes.com/2008/11/25/sports/ncaafootball/25sandomir.html?_r=1
20 Cable Networks To Reach 100 Million Subscribers By Year End - TV Ratings, Nielsen Ratings, Television Show Ratings | TVbytheNumbers.com

So the most ESPN has ever pulled for viewership is 21.8 million people, yet 98 million people are contributing $3.65/mo to have access to the channel. By my math that's 76.2 million people paying $3.65/mo for a channel they don't watch!

Versus isn't doing nearly that volume, but they hit 3.45 million viewers during their broadcast of the Stanley Cup playoffs. The channel is (was) available to about 75 million people, so that means that 71.55 million people are paying less than $0.30/mo for a channel they don't watch.

Out of a channel package of 200-250 channels, people generally only watch a handful of channels. The argument that always gets made here is: ala carte! People couldn't afford ESPN if only those who watched the channel wanted to subscribe to it; they'd need the same supporting revenue they're getting from 98 million people to maintain the quality of the broadcasts and they'd have to get that from 20-25 million folks. Networks like Lifetime would fold without enough viewership to support the channel.

The system isn't perfect by any means, but I don't think there are any obvious ways out from it.

ESPN has NBA, MNF, NASCAR, MLB, College Football, College Basketball and other events.

Versus has Hockey a few nights a week. PBR, Very little College Footbal, Indy and WEC.

ESPN shows something worth the value they charge. Keep in mind Sports fans is what keeps Satellite, Cable and Fios operational.

 

[SpaethCo]

ESPN has NBA, MNF, NASCAR, MLB, College Football, College Basketball and other events.

Versus has Hockey a few nights a week. PBR, Very little College Footbal, Indy and WEC.

ESPN shows something worth the value they charge.

ESPN has about a million viewers a night on average, Versus has about 150,000. So while ESPN has just under 7 times as many viewers on average, they charge over 12 times as much. ($3.65 vs $0.30)

If the content that Versus was showing didn't have value then their viewership numbers would be closer to 0.

 

[Big Dawg 23]

ESPN has about a million viewers a night on average, Versus has about 150,000. So while ESPN has just under 7 times as many viewers on average, they charge over 12 times as much. ($3.65 vs $0.30)

If the content that Versus was showing didn't have value then their viewership numbers would be closer to 0.

ESPN can survive on its own with a provider, while Versus can not. Versus will soon see the impact in the loss of D* customers.

Could be worse you could be a Blues fan with Dish network.

 

[SpaethCo]

ESPN can survive on its own with a provider, while Versus can not. Versus will soon see the impact in the loss of D* customers.

EVERY network feels it when they are dropped by a payTV company.

If DirecTV dropped ESPN it would mean the loss of $788.4 million per year -- there isn't a single network out there than can easily survive the loss of 3/4 of a billion in subscriber fees, which probably translates to well over a billion by the time the loss of advertising revenue is factored in.

It's easy to see why this is being drug out so long. Yes, Versus is losing money right now, but if they're successful in their bartering with DirecTV they can maintain their subscriber numbers and hence their advertising revenue. If they simply give in and let DirecTV place the channel in the Sports Pack, they lose subscriber fees and advertising dollars from the reduced subscriber count. It's a choice between short term losses with possible long-term benefit, or guaranteed long-term losses if they just settle.

If this goes on much longer it's going to be really fun when it comes time to renegotiate the Comcast SportsNet contracts.

 

[dodge]

I was just at my parents and they have Versus on their Comcast basic package.:rant:

vs is owned by the greedy bastards at comcast!!!