Williams/Blum Pod: It's time to start talking the next round of TV contracts

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istater7

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ESPN+ doesn’t suck because of poor connectivity problems. It sucks because the platform is difficult to navigate and unreliable. Trying to chrome cast from my phone to my tv has been a huge pain. Plus it’s one more app you need to have. If I could add it as part of my YouTube TV package, now you have something...but switching between all the different apps to watch one particular thing is becoming a pain. I won’t be surprised if the streaming service world comes crashing down quicker than anyone thinks because of the eventual inconvenience there becomes to watch what you want to watch. Before we know it things will become consolidated again and setups go back to being similar to the cable/satellite model.
 

BryceC

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ESPN+ doesn’t suck because of poor connectivity problems. It sucks because the platform is difficult to navigate and unreliable. Trying to chrome cast from my phone to my tv has been a huge pain. Plus it’s one more app you need to have. If I could add it as part of my YouTube TV package, now you have something...but switching between all the different apps to watch one particular thing is becoming a pain. I won’t be surprised if the streaming service world comes crashing down quicker than anyone thinks because of the eventual inconvenience there becomes to watch what you want to watch. Before we know it things will become consolidated again and setups go back to being similar to the cable/satellite model.
100%. I think people don't realize how little they'll miss things when they drop them. I dropped Netflix for like 18 months and I never thought about it. I have Disney+ because my kids watch it all the time, and Hulu because of the package with ESPN+, but I never watch it. Again if the Big 12 would sign an exclusive deal with ESPN and I could stream everything on ESPN+ for 25 bucks that'd be the only service I had.
 

JRE1975

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True and good points. That said though, not having any actual inside knowledge or ties to the industry, I just don't see it.

Google is the largest advertiser, but they are not in the business of selling live TV advertisements. Their biggest revenue is from placing online ads which is a massive business of course, but significantly different from ads on live TV. In Youtube, they do serve ads on videos, but again it's totally different.

Now if you look at YoutubeTV, in that case they are not involved in the advertisement portion of it. They are buying the rights to broadcast TV networks which have already done the business of advertising. So in that case they are not doing any advertisement. Basically, they are serving in the role of Mediacom.

So if you look at Google, Amazon, Facebook, etc they do have experience in the broad category of advertisement and they have the capabilities of putting out a quality video stream to people. But they don't have the experience and knowledge to understand how it works packaging in those ads as part of the video feed. It's sort of like this - when Amazon started becoming what it is today - the world's biggest online retailer, and when it started taking huge bites out of the brick and mortar stores, those stores tried to fight back. They have decades of experience selling products to consumers. They'd even had their own online stores up and running for years. But they couldn't take on Amazon. They kept losing business, because they just didn't understand that secret sauce Amazon had learned, how to make money selling big box store type items in an online environment. It took years, but Walmart seems to have caught up a bit with their online presence. But they weren't able to just step in and become a competitor right away even though you would think they should. The same applies here - these tech companies do have tons of relevant experience but they haven't done it yet themselves. I think they can get there, but they're not there yet. That's why I say this round they'll go for the smaller contracts to figure it out and then swing for the fences next time around if it works.



Yes, agreed. I'm not forgetting they have a need to produce more content to keep customers interested. But if Netflix could spend $50M to produce a season of a TV show ($50M/season for Orange is the New Black for example), or they could spend billions for P5 college football content, I think they're going to pick that TV show every time. Because they know that those TV shows keep their subscribers happy. The cost difference from tens of millions to produce TV shows vs. hundreds of millions or billions to get CFB has to be made up by a corresponding increase in subscribers or revenue from ads.
You make good points. I don't know how ESPN+ works, but I think ISU produces some of the product and ESPN inserts the ads in the feed. Maybe that will be the deal, the schools produce the games and someone else controls the feed and inserts the ads?

I am guessing, but I think Google has the resources to make it work, if they decide they want to enter the space.

It will be interesting to watch over the next 18 - 24 months.
 

RustShack

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ESPN+ doesn’t suck because of poor connectivity problems. It sucks because the platform is difficult to navigate and unreliable. Trying to chrome cast from my phone to my tv has been a huge pain. Plus it’s one more app you need to have. If I could add it as part of my YouTube TV package, now you have something...but switching between all the different apps to watch one particular thing is becoming a pain. I won’t be surprised if the streaming service world comes crashing down quicker than anyone thinks because of the eventual inconvenience there becomes to watch what you want to watch. Before we know it things will become consolidated again and setups go back to being similar to the cable/satellite model.
Why do you chrome cast it from your phone? I just have an Amazon Fire Cube that has all my steaming apps on it. Including the ESPN app to stream ESPN+
 
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cykadelic2

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Great stuff! Appreciate your insights, this is fascinating.
Great podcast, Brent and Chris.

One scenario that wasn't discussed is the acquisition of PACN's production assets by Amazon, Google/YouTube or Apple for immediate (and relatively cheap) entry into the live sports production space. Larry Scott's departure is IMO an indication that the P12 will now be more aligned (and cash strapped) to sell PACN assets to one of those 3 entities. While the PACN has been a disaster with distribution, the production quality of their live content has been very good for the most part and those assets have extreme value to a new entrant. Plus, it helps those assets are near the HQs of all 3 firms.

Let's say if Amazon does buy PACN, Amazon will not want to only partner with the P12. As a result, a prime target will be the B12 and potential reinstatement of P12/B12 Alliance (not merger) talks.

And in this Alliance scenario, I would envision Amazon sublicensing Tier 1 OTA rights to CBS to fill their SEC void with their choice of the best P12 or B12 GOTW. In addition, I could see Amazon sublicensing a Saturday primetime game to TNT or TBS, a 11 AM CT B12 game to CBSSN, TNT or TBS and a 9:00 PM P12 game to CBSSN, TNT or TBS. The rest of the P12/B12 weekly inventory would be on Amazon Prime.

Your CBS/Paramount+ and NBC/Peacock scenarios also have merit with the likes of Amazon but the PACN acquisition should not be overlooked and, in fact, may be the most plausible scenario of these 3 given the deep pockets of Amazon, Google and Apple and their likely desire to control/manage their own live sports production assets.
 
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Die4Cy

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From a Big XII and member school standpoint, you really want your teams to be on the platforms that provide the easiest access for viewers. Tying ISU football to Hulu or something similar benefits the tech company more than the viewer, and the result is that the schools would want be paid much more for losing that easy access to the casual viewer. Big tech has the dough, but can they pay it knowing they might only get a portion of the viewers the games had previously? Amazon and Disney have been experimenting with it some, no doubt in my mind this has something to do with college football rights coming up soon.

The least risky place to be is probably Amazon because Prime has such a massive subscriber base, but it is dwarfed by the potential viewers on a network like ABC or even ESPN at the moment.

As far as content streaming goes, the networks all want to own and control their intellectual property but they are getting in late in the game and viewers will likely have a limit somewhere in how many streaming services they are willing to subscribe to. Paramount+ is a fine place to provide access to old content but it isn't going to compete with Amazon or Netflix or Apple at all. I believe they've missed the boat already.

I think it more likely that tech hubs just buy up networks so they can stream their best stuff and as that stuff moves over to the on line space it will create more slots for sports and live events that support the ad revenue model networks require to stay afloat. Streaming and bingeing things with ads every few minutes (like Hulu basic or YouTube TV) takes a lot away from the experience when you are already paying a fee for it. I just don't think that's going to be sustainable.

Regardless, it's really interesting to watch as these things develop. Big tech has so much money they can spend close to $100 million an episode on their TV shows knowing it will turn a profit given time just as long as people don't drop the service. They will be a huge player when they truly commit to being the exclusive owner of live sports content. It just depends on how they decide to do it.

TL: DR: Big tech has a huge incentive to get into live sports, but the best way to monetize it might be to buy entire TV networks to move the seasons of episodic programming to streaming and keeping sports on those networks in front of eyeballs that are just one clicker away in order to maximize revenue.

We may be going back to a world where there are only four channels, but instead of it being ABC-NBC-CBS-FOX, it will be Amazon-Google-Netflix-Apple.
 
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CloneGuy8

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It would be awesome if the Big 12 could get a deal with CBS or NBC. Having some games on a streaming service is fine, but that would really blow if the future of games like the red river shootout are on Netflix.
 

Yellow Snow

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We may be going back to a world where there are only four channels, but instead of it being ABC-NBC-CBS-FOX, it will be Amazon-Google-Netflix-Apple.
I agree with your assessment, but that worries me in more ways than one.
 
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Boomer

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I love the main part of the podcast where the Big Ten and SEC add these huge new revenue streams in the era of Covid and then an assumption is made that the Big XII will automatically itself get a huge leap in money.

"Why would OU move for ten million more" Its not ten million its more like twenty.

There is less inventory in this league and there are less eyeballs in this league footprint so more money on the open market is not a given at all.

Not to mention the Tier 3 Texas tie up with the LHN/ESPN which would hinder value of any non Mouse network move etc Heck OU still has its Tier 3 tied with Fox and thats up for renewal before the PAC is even due I believe.
 
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Die4Cy

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I love the man part of the podcast where the Big Ten and SEC add these huge new revenue streams in the era of Covid and then an assumption is made that the Big XII will automatically itself get a huge leap in money.

"Why would OU move for ten million more" Its not ten million its more like twenty.

There is less inventory in this league and there are less eyeballs in this league footprint so more money on the open market is not a given at all.

Not to mention the Tier 3 Texas tie up with the LHN/ESPN which would hinder value of any non Mouse network move etc Heck OU still has its Tier 3 tied with Fox and thats up for renewal before the PAC is even due I believe.
Well there is also a lot of **** inventory that's about as appealing as 1-AA in those two leagues as well. CFB is only behind the NFL in terms of being bankable content that generates advertising dollars, and while some regions may get a little more or less because of the number of eyes available to watch, any live sports content is preferable to them over sit-coms or dramas people tend to record and skip all the commercials when watching. The Big 12 will make up similar ground to other leagues I'm sure.
 
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cyclonedave25

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I love the man part of the podcast where the Big Ten and SEC add these huge new revenue streams in the era of Covid and then an assumption is made that the Big XII will automatically itself get a huge leap in money.

"Why would OU move for ten million more" Its not ten million its more like twenty.

There is less inventory in this league and there are less eyeballs in this league footprint so more money on the open market is not a given at all.

Not to mention the Tier 3 Texas tie up with the LHN/ESPN which would hinder value of any non Mouse network move etc Heck OU still has its Tier 3 tied with Fox and thats up for renewal before the PAC is even due I believe.
How much money is OU willing to give up to keep their path to the conference championship and playoff much easier in the Big 12? More money sounds nice, but when you are constantly battling Alabama/Ohio St etc just to win your conference, does it really matter that you can renovate your locker rooms again? The grass isn’t always greener. You can put as many blue bloods in the same conference as you want, but teams still have to lose and only 1 can be Champion.
 

CloneGuy8

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How much money is OU willing to give up to keep their path to the conference championship and playoff much easier in the Big 12? More money sounds nice, but when you are constantly battling Alabama/Ohio St etc just to win your conference, does it really matter that you can renovate your locker rooms again? The grass isn’t always greener. You can put as many blue bloods in the same conference as you want, but teams still have to lose and only 1 can be Champion.
But its working out so well for Nebraska:rolleyes:
 

Boomer

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How much money is OU willing to give up to keep their path to the conference championship and playoff much easier in the Big 12? More money sounds nice, but when you are constantly battling Alabama/Ohio St etc just to win your conference, does it really matter that you can renovate your locker rooms again? The grass isn’t always greener. You can put as many blue bloods in the same conference as you want, but teams still have to lose and only 1 can be Champion.
I know its not a popular take but most Oklahoma fans would certainly rather play an SEC schedule from ticket value-roadtrip perspective and a segment wouldn't consider the Big Ten west a downgrade in any fashion. - From a fans point of view these factors have zero to do with the money.

Outside of the fan value, the league desperately needs to acquire recruiting turf/eyebrows. Like legit think the Big XII could poach the Arizona schools - Phoenix is a huge growing metro of talent/eyebrows. If there really isn't any movement to improve the leagues long term success probabilities why are we bothering?