Let's just say the Big Ten Network battle between the cable carriers and the Big Ten/Fox team is in full swing. I got many interesting e-mails yesterday and today. (see my previous post) The are a couple points that I feel I need to clarify and I'm going to do it in this Q & A to help better answer some questions.
Q: If the Big Ten Network plans on charging the cable carriers $1.10 per month in the Big Ten states and .10 cents in other states that don't have Big Ten teams, will those costs automatically be passed on to every customer?
A: Let's first address the number. Talk to people at the Big Ten Network and they'll tell you that that number is not necessarily accurate. You see, it's believed that some small carriers have been given the $1.10, but a spokesman on the Big Ten Network/Fox side tells me that Comcast was never presented with that number. Comcast could get its final price lower, they reason, since the real cost on a net basis can be reduced by selling advertising that the network gives them within the broadcasts. The Big Ten Network folks also say that they are willing to negotiate that number down, but that carriers like Comcast have not been willing to do so within the last month. The folks at Comcast will then tell you that the last number they've heard is $1.10 and that at least one member of the Comcast executive team was in talks with the network as recently as last night. (Big Ten Network interests then fire back that it was a conversation and by no means a negotiation). Can you tell it's getting hot in here?
Q: Many people told me my numbers on the percentage of people that watch games (at best, 12 percent) was misleading because I didn't clarify that that type of number is great for a cable channel. I was trying to make the point that 88 percent of people aren't watching the channel, yet they are asked to pay for it. So the big question is, what other channels are not on a sports tier and have small viewership? And why shouldn't viewers be expected to pay for that?
A: The easy ones to talk about here are The Golf Channel and Versus because they are owned by Comcast. They are on expanded basic and customers don't have to pay extra for them. But I'm told that the $1.10 price for the Big Ten Network (whether that's a phantom price or not) is more than three times the cost each of those channels on a monthly basis to the carrier. The carriers are always going to try to favor their own networks to a larger audience. Fox does this too. Rupert Murdoch controls DirecTV and the Big Ten Network and the Speed Channel, which Fox has an interest in, are both on Choice Extra, which is the satellite equivalent of expanded basic.
Q: What's the difference between CSTV and ESPNU and the Big Ten Network?
A: First let's clarify. In some places CSTV and ESPNU are on basic, but on DirecTV, which remember is owned by Murdoch (Fox), even those channels are on a sports tier. Although the Big Ten Network officials have been very clear that this is network with national appeal, they want their price to be compared with the a la carte price of regional sports networks, which often charge carriers $2 per month. Again, they say it's a national network, but that unlike CSTV and ESPNU, which broadcasts national games with no preference of matchups, fans in the main audience areas (those eight Big Ten states) are more likely--like a regional network-- to find something that appeals to them.
Should you have any more questions or have a comment, I will be devoting plenty of time to this debate over the next week. So please e-mail me your thoughts.
Questions? Comments? SportsBiz@cnbc.com
