February 13, 2023

Removing Friction

A few years ago sports were seen as the programming keeping cable TV alive. Fans wanted to watch sports live, not stream it at any time like a TV series or move. The Diamond Sports group failed to take advantage of this, as part of the reason for their approaching bankruptcy is a lack of carriers.

Although the Sinclair-Diamond regionals recently were added by FuboTV, the networks have not been able to reach carriage agreements with some other major programming providers — including Dish Network, Hulu Live, Sling TV and YouTube TV. MLB commissioner Rob Manfred has touched on the subject several times in recent months.

“I think the key for us is the development of direct-to-consumer products to increase our reach,” he has said. “The biggest problem for us on the (regional networks) side is that, even within the cable bundle — particularly with the Diamond subsidiary — is that their reach, within the bundle, is not what it used to be. It’s important for us to develop digital products that allow us to get to our fans in a frictionless way. That’s really your future.”

StLToday.com

MLB feared the new technologies of radio and television. Rather than using those technologies to create more fans, teams feared their gate receipts would disappear. Bud Selig and the owners in the 1990s did not make that mistake, and streaming on the internet turned out to be a financial boon. The two models of broadcast delivery and streaming did bring about local blackouts, which hurt the game. I suspect that in a few years there will be no regional sports networks, and various packages that allow fans to buy the right to watch particular games, teams, divisions, leagues, or the whole kit and caboodle. I suspect MLB will do very well with this.

It may also have the consequence of improving the game. When an RSN rating go down, they can’t do much to change the product on the field. They add gimmicks like field reporters, fan interviews, and booth visits. If MLB controls the broadcasts, they will have a more direct reason to improve the game to improve ratings.

I look forward to how this will play out in the next decade.

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