NBA Cinches Critical Cable Carriage Deals

Rumors surfaced last year, following the NBA partnership with Turner about a compromise of lower affiliate fees for expanded coverage on Time Warner Cable. It made sense given the Turner relationship, and as I continue to harp on, is critical as league-owned networks near a make or break tipping point.

In advance of last week’s Opening Night, NBA TV closed carriage deals with Time Warner, Cablevision, and Dish, adding to its distribution roster of Comcast, Cox, DirecTV, and Verizon. The latest additions put NBA TV at 45m homes, a 3x increase from last year’s opening night, and a clear signal the network plans to become a major player.

What the NBA has going for it that none of the other league networks have are the Turner partnership and a strong digital offering that aligns with the on-air product. No, I’m not forgetting the power of MLBAM, but I am accounting for the fact that MLBAM operates in a silo and appears to clash more than integrate with MLB Network – and the league for that matter. However, taking a page from MLBAM’s playbook, NBA Digital recently released a mobile application for its streaming video package and it continues to market and improve the online version. They have done well to leverage TNT talent and production capabilities to create a quality mix of online and broadcast programming.

Thinking bigger picture for a second, while the NFL may command the most demand, the NBA and MLB have the longest season and the most content, two ingredients that work well for media. The demand for the NFL may actually work against NFL Network, since it increases the competition it faces and the event driven nature of football concentrates the competition into certain days and times. Meanwhile, though they have less absolute number of fans, NBA TV has an opportunity to capture a bigger share of the market, and partnering with its top television partner for production and marketing only adds to the possibility.

Long term, if the network can entrench itself with fans, slowly build a stable of exclusive games, grab rights to ancillary basketball events (Olympics, college, overseas, maybe NBA games played overseas), it has a chance to continue to expand that 45m subscriber base and boost its subscriber fees. It’s pulling the right strings hiring solid talent (adding McHale to a cast that include C-Webb) and proliferating digital distribution channels. Within a few years, NBA TV can become a meaningful revenue stream for the league and a serious competitor in the sports television landscape.

Success in media continues to get more difficult with lower barriers driving increased competition and fragmentation. However, NBA TV, and the other league networks have one significant advantage – they own the content. MLBAM has proven on the digital side that managing content correctly can lead to big business, while on the other side the NFL Network shows that just putting games on will not bring customers and providers to their knees.

Similar to my criticism of the NHL Network for not committing to wider carriage and making a strong push, let’s commend the NBA for getting the deals done and putting the resources behind what can become a big future revenue stream for the league that will offset some of the decreases it expects in other business lines.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: