Each weekend, Daniel Frankel and David Bloom conduct an SMS chat about the latest happenings in technology, media and telecom. Our weekly Next Text column will have a new platform home on October 6 -- stay tuned for more information. You can also find it on LinkedIn.
DANIEL FRANKEL: Well, David, it's kickoff weekend for college and pro football. That means blackouts -- the pay TV world times many of its program licensing deals to end at this fateful moment on the calendar, when consumers will be more likely to notice because they suddenly can't watch their favorite team.
Writing from my Friday morning vantage point, I see the following: On Sunday, Disney channels, including ESPN and ABC, could go dark in around 11 million ABC homes, taking down a huge intersectional matchup between USC and LSU, not to mention a Monday Night Football game featuring Aaron Rodgers and the New York Jets facing the Super Bowl runner-up San Francisco 49ers.
Also read: Comcast Customers Lose Big Ten Network Access to Pac-12 Refugees
Then there's a regional blackout of the Fox-co-owned Big Ten Network -- Comcast Xfinity customers don't have access to the four teams fleeing the Pac-12 for the Big Ten: USC, UCLA, Oregon and Washington. That will impact the openers for Oregon and Washington. It's ritual for the pay TV guys now. They do it for almost every major negotiation. But it's part of the reason why that business is fading. Consumers are sick of it.
DAVID BLOOM: Like the swallows to San Juan Capistrano, the blackouts alight in the eaves of the fading cable industry every year at this time. You can pretty much set your clock to the blooming of the “Call (insert video provider name here) now!” websites. I’m less interested in these annual performative business jousts than I am a couple of other sports-TV related issues. One is the decision by Amazon to pull back its $115 million investment in Diamond Sports, promised last winter and now apparently no longer on the table. I always thought Amazon just wanted a peek at the books for these intensely local TV deals with the NHL, MLB and NBA. Now, Amazon has that $1.8 billion NBA deal (barring some three-quarter-court shot hitting in the Warner Bros. Discovery lawsuit), and Diamond looks like it’s actually going to have a functioning business next year. How crazy is that?
Also of note: ESPN is launching a daily, sortable schedule of pretty much all the live sports streams available from more than 250 services across the internet. It’s insanely smart for ESPN to do this, perhaps a first step toward being the pivot point for all TV sports in the future. It wouldn’t shock me to see this move another step forward with ESPN offering easy add-on subscription access to those smaller channels for its customers, much like Amazon’s Channels, which reportedly generate a few billion dollars a year. Who needs Venu Sports when you’ve got this?
FRANKEL: Yes, we were among the first to cover Amazon's pullback from Bally Sports. Amazon got what it wanted directly from the NBA, and through a sublicense deal with Rodgers in Canada for the NHL, and it walked away from Diamond Sports Group. Smart. What we didn't cover was The Trade Desk launching into the TVOS business -- Janko Roetgers and his Lowpass newsletter got there first. That seems like such a natural play for these big advanced advertising platform companies. Also, USC's hype videos ahead of football season notoriously induce cringe, but this one is an exceptional masterpiece. Didn't the producers know that the Trojans weren't in the horse and that they were the once who got fooled?
cleared for takeoff and ready for battle.it's the Arrival of the Trojan. ✈️🗡️✌️🔥 pic.twitter.com/pwThLPYTumSeptember 1, 2024
BLOOM: I agree that it’s not a big lift for a tech-infused powerhouse such as The Trade Desk, which is booming right now. What I don’t understand is where an interface like that lands among all the TV hardware and software platforms out there. Is it competing with Goog-droid TV, Roku, the OEMs and whatever is left of Fire TV’s ecosystem? Is it just a virtual thing that aggregates viewership and channels online and attracts viewership there and keeps all of the vig, rather than just a share? Is it licensing to generic OEMs out of China, India and Turkey? Help me understand why this will be big for the Big Desk, and perhaps media companies with content libraries for rent.
FRANKEL: I think you said it -- why share the vig with Roku, Amazon, Google or Samsung? Speaking of "all the vig," YES Network and Madison Square Garden have teamed up to combine all their contracted local teams into one $42-a-month streaming service. That's one destination, the Gotham Sports App, for the Yankees, Knicks, Nets, Rangers, Devils, Islanders and Sabres. That's not cheap vs. a regional sports network ... but it definitely beats having to subscribe to two RSNs. Now, granted, Big Applers don't get the Mets ... and their current 19% odds of making the MLB postseason. But this seems like an enticing proposition for sports fans.
BLOOM: Tying up most New York teams in a single TV package was smart, given the shifting sands beneath local sportscasting. I’m less excited about that premium price. It makes this service strictly for hard-core fans. No drive-by looky-loos, no building fan bases, just raking off revenues from the already converted. And just as Venu (at almost exactly the same price) features barely half the national sports broadcasts, this offering is riddled with holes bigger than just the Mets. There’s no non-New York anything, for a price that almost certainly will rise quickly.
Bloomberg Businessweek just profiled Chad Milman, the former ESPN the Magazine editor who founded The Action Network, a site with relentlessly practical information about sports gambling. Action features no flights of Grantland Rice-esque prose, just what bets to make, on what game. The story's bigger point is Milman’s journey is also that of sports, sports TV and sports journalism. Increasingly, they all exist mostly to deliver gamblers to gambling sites, rather than just, say, selling pizza, pickups and beer to sports fans so they can watch their favorite team.
FRANKEL: I received a note over the weekend that DirecTV and Disney are going to stay in negotiations. Seems likely that they'll play through the weekend and not black out any football games on ESPN and ABC. Separately, this Penske showbiz trade story out of the Venice Film Festival is interesting. Experimental filmmaker Harmony Korine says Hollywood is "crumbling creatively" with its insistence not to innovate the (stale?) motion picture format. I read this just after a Korean producer scouted my duplex as a location for a new "show" being produced specifically for TikTok. I think we talked about the latter a month back or so. The foundations of video entertainment could look very different in a decade. Watching Netflix could be as big of an age marker as checking your Facebook. (I included a trailer here from Korine's Aggro Dr1ft, which is filmed in infrared.
BLOOM: This is exactly why Netflix has spent considerable sums getting into video games, live/immersive experiences, and interactive titles such as Black Mirror: Bandersnatch. Company investor letters can be astoundingly smug, but Netflix execs are refreshingly willing to throw all kinds of initiatives against the wall to find ones sticky enough to engage their customers. The traditional studios? Not so much.
Does that mean Netflix will escape the granny trap snapping at Facebook, the Hollywood media companies, and major record labels? Maybe not, though given the demographics of their most loyal customers, I like their chances better than most of their competition. TikTok is indeed compelling competition, should it manage not to get banned. I consider TikTok a bigger problem for musicians trying to build long-term careers. Budding singer-songwriter Lizzy McAlpine had a TikTok-fueled explosion around 2022’s Five Seconds Flat. Now that she’s Older, McAlpine is purposely avoiding TikTok to promote new album Ceilings. She may not be the only one.
Meanwhile, there’s lots of talk that Warner Bros. Discovery should consider selling chunks of itself to fix its ugly finances. One option: spin out part or all of Warner Bros. Games for a few billion very useful dollars. But as LightShed Partners' Rich Greenfield suggested to Puck this week, the best chance to do that was before this year’s Suicide Squad: Kill the Justice League. Business Insider estimated the title lost $200 million, a flop on the scale of The Flash, which David Zaslav touted as the greatest superhero film ever before it became DC’s greatest film flop ever. TikTok, meanwhile, has millions of 15-second flops every day, but it’s not like you or any of its 1 billion users will ever see them.
FRANKEL: Well, surprise, surprise, Less than 30 minutes before the USC-vs.-LSU game on ABC, I got emails from DirecTV and Disney letting me know Disney channels have been pulled off DirecTV pay TV services. This was a big event -- it drew 9.2 million viewers, according to Nielsen, even without the third largest pay TV platform in America. My son was down from Santa Barbara to watch the game with me. We even ordered Wingstop. Wingstop! How American were we? Thankfully, the five-day YouTube TV free trial was available, so I'm not out much skin, save for the extra ranch dipping sauce Reece had me buy. But jeezus, this kind of anti-consumerist stupidity happens every year ... usually involving Disney. Two seasons ago, I only had Sling TV, and Disney went to blackout with Dish Network right before a USC game against Arizona State.
Also read: The Mother of All Pay TV Blackouts? ESPN Takedown on Dish and Sling TV Stirs Football Fan Revolt
Last year, Disney was blacked out by Charter right before college football's big Thursday-night opener on ESPN. These kinds of high-intensity live viewing events make natural points of focus in a business negotiation, but it's just awful for consumers. If you like pro and/or college football, there's not much you can do. Bob Iger has you by the short hairs. But we can stop playing both sides and blaming this on the operators 50-50. I'm told by a DirecTV source that Disney wanted them to drop all future litigation. Who would be dumb enough to sign onto that?
Now, if Disney wants us to split blame with a pay TV company that recently and shiftlessly sold a $140 satellite TV package to my dementia-impaired 80-year-old mother-in-law, be my guest. But Walt's prestige brand should be better than this. Speaking of prestige brands, as sports fans, we have all grown fond of ESPN's wit and cleverness: The mascot comedy; the smarty-pants SportsCenter anchors; the 24-7 shared enthusiasm for sports. Disney created an almost Teflon brand, immune to the responsibility of its priciness and dominant TV rights control. From college football to the NBA, ESPN is the gatekeeper of everything. But if you're going to treat me this way -- s*** on me after I look forward all week to consuming your product -- I might find other things to do on a Saturday night than watch football. Seriously. I am offended by the way this all went down. They could have waited until after Monday Night Football was over to do this. Show a little respect.
