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.

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MLBAM Postseason Deal Solidifies Key Premise in Digital

MLBAM announced a deal with Turner and Fox to offer a postseason version of its popular live streaming video package. I’ve read a few comments describing confusion over adding another product to the myriad of permutations that MLBAM already offers, but this should be a case study on monetizing digital content.

MLBAM is taking its valuable core content – mainly live baseball games, to which its held onto the digital rights to – and pushing it out through every viable distribution channel. Then it’s repackaging the content to develop a new offering of the same core content, charging users a fair, reasonable price for each unique offering

MLBAM is executing the Internet business model many write about, but few perfect. Taking advantage of the low distribution costs to put their content out in multiple places, understanding the profit margin increases with scale, so finding ways to deliver the same content to more people directly boosts the bottom line, and understanding the value of its content to strategic partners (i.e. Turner and Fox) and to customers in the marketplace. The $10 computer version or $4.99 mobile version may not sound like significant revenue generators, but in all likelihood the marginal cost to develop these products is next to nothing since it leverages the same technology MLBAM already uses all season and the same content and camera angles going to broadcast. Net result is a significant profit margin for the partners to share.

Of course, the other key factor is that MLBAM offers the best products. Aside from executing on the business model, MLBAM delivers a great user experience, and is more willing to try new technologies, new distribution, and new features in digital than any sports entity. The HD feed is ridiculously close to what you get through TV. The Twitter feed and social networking integration with TBS Hot Corner are fun value-adds to occupy fans during what can be tediously long games. Camera angles, Tivo/DVR-like replays and highlights, box scores and game summaries, multi-screen layout, it has almost everything fans want. They should consider integrating a live, real-time fantasy game involving the players playing in that game, but that’s an entirely different topic for another post.

Overall, MLBAM is a model for not just sports, but any digital business with valuable content trying to figure out how to monetize it. Focus on your core product, find as many unique ways as possible to package it, leverage every possible digital distribution channel, find partners to extend the distribution even further, and monetize it every step along the way.

More Golf Commentary: Turner Extends PGA Partnership, US Open Decisions

Turner announced a long-term extension to continue carrying the PGA Championship and operating PGA.com. The burning question – when will they start to leverage the asset for the value its worth? Turner should take a note from the USGA’s digital presentation of the US Open – then take it up a notch from there.

Golf is event driven, the website should reflect this with tons of in-event interaction for fans. Golf should embrace live streaming, and give the user more opportunities to customize the experience. A golf event is a microcosm of the “long-tail” effect of digital media – many story lines simultaneously playing, each with some interest. Put small, low cost cameras out on each hole, so a fan can follow players around the course, watch a mosaic view and skip around to holes, or view a specific hole. It doesn’t need to be HD production, since viewers still have the TV coverage, but supplement it.

In addition, unlock the archives and all its potential. Let users watching a hole call up shots that the same player hit in past years on that hole, or check what recent champs did on that same shot, or watch the best all-time shots on that hole or by that player or on that course – get the point, endless options. Get the footage online and tagged. Building on that, have a player instruction section with tips, have caddie’s blog, make more interactive games like the US Open, also put Fantasy games to generate more interest, allow fans to debate golf strategy and club selection during an event. Bottom line, digital media is more than throwing up some video and a Twitter feed. The PGA and Turner are behind the curve, and need to make progress for this partnership to succeed.

Back to US Open for a second, one of the most poorly run big sports events in history. Lessons. Be proactive, not reactive to potentially damaging situations. The USGA was shamed into allowing fans from Thursday’s rainout use their tickets on Monday, and were lucky to have a Monday. They should have a contingency ready for what is obviously a possible situation.

Another lesson, be content with not finishing on Sunday. Starting the third round at 7 PM on Saturday night, and the 4th round late on Sunday made NO SENSE. Golf is meant to be played in 18 hole increments, don’t start when you have no chance to finish. Fans had trouble following the tournament, players were not in the same rhythm they follow each week. Live with the fact you need Monday to finish. People will flock to the US Open, don’t put a low-quality product out to meet time constraints. It hurt the ratings, and hurt the tournament.

Another comment on fan experience, outlawing cell phones does not work in 2009. Fans complained about not being able to meet each other, not knowing the weather situation, and not knowing what’s going in general. They need to change this.

TNT Botches Game Schedule

TNT, along with NBA broadcast partners ESPN and ABC, continue to ride the most provocative NBA season in recent history to big television ratings, taking advantage of teams in the ultra-competitive Western Conference and the re-emergence of the Celtics. Thursday night TNT blew its last regular season opportunity for big ratings.

Each Thursday the NBA schedules a third game, along with the TNT doubleheader. This week, five of the six teams playing were in the West race, two games pitted in the Pacific time zone. Yet TNT televised the one game with the worst team involved, the Clippers, and passed on the one non West coast game, in Dallas, forcing a local start time of 5:00 PM for the Golden State-Denver game.

Kobe and the Lakers always draw ratings, but why put a semi-meaningless LA showdown featuring the hapless Clippers that turned into a 30-point blowout and pass up an intriguing Dallas-Utah game with two teams in the midst of the playoff race. To make the decision look worse, the Mavs and Jazz played a tight game down to the wire with Nowitzki hitting a late jumper to send Dallas to the playoffs.

The schedule forced the Nuggets-Warriors game, tied for the final playoff spot, to start at 5 PM locally to accommodate the late start in LA. TNT easily could have started the Dallas game at 7 CST, not an unreasonable for local fans on a Thursday, kept the Warriors at 10:30 EST, 7:30 local, and boasted a Western Conference double dip involving the three teams battling for the final two spots and a division winner, then had Dallas clinch. Instead they have a snoozer in the late window, and probably in the ratings column.