This absolutely makes the point I have been trying to make for the last several days. Thanks to MadMax for posting it.
If you want to play the "I'm a XXXXX in real life" card, then I'm going to play that same card for my 10+ years in journalism, including a graduate degree from the top J-school on the planet. Where does that come into play here? With that "reportedly" $3.40 figure from David Barron that you have seemingly taken as gospel. I've told you the inherent limitations of that level of sourcing, as well as the motivations that folks on each side would have to "leak" information to the media. If you're going to dismiss my business acumen for this case based on not being a bankruptcy attorney, then by that same token you should respect many of the things I've told you about why David Barron's reports may not accurately reflect negotiations.
I stayed at a Holiday Inn Express last night. Therefore you must believe me when i say "very good response".
I'm not saying that the $3.40 number is set in stone. I am saying, and have been throughout, that whatever price they have set exceeds previous RSNs and is viewed as unreasonably high by the providers en masse. Look at the article that MadMax posted to explain this in detail. CSN (and others) have overestimated the value of an RSN in their pricing. It simply isn't going to be the cash machine they thought it would be. As part of my BBA program, I took courses in management. It is basic management theory that if you can enhance your service by providing something your competitors aren't that people may want, you do it to gain customers. This is particularly true in a business, like TV service, where the number of customers in a market is fairly finite.
You've repeatedly referred to Barron articles as evidence of your version of events. It's not just about the $3.40 figure. It's about the refusal of the providers to regularly come to the table and negotiate, as well as the arbitrary nature of making an "example" out of CSN Houston. There are numerous other RSNs -- no, not just the glamour Lakers -- in the new pricing environment that providers HAVE struck deals with and HAVE agreed to pay for. Why not draw the line in the sand before it even starts, if it's that big of a problem? Moreover, with the MadMax article, I'm all about not taxing households for channels they don't need. By that token, why don't providers consider an a-la-carte model across the board? There are plenty of other high-cost channels, besides RSNs, that are on the basic tier, yet I personally never watch them. The reason they don't is because they know it would kill their margins to let consumers have that much choice. They're arbitrarily targeting RSNs because many of them are startups (thus less blowback from the average consumer for not having), and within RSNs, they're arbitrarily making an example of Houston. If the providers want to take the mindset stated in MadMax's article and be consistent with it across all of their programming decisions, I'm on board. I'm guessing they won't be. It's basic common sense theory that if you think the money in scenario A is greater than scenario B, then scenario A is the one a business will probably go with. If a provider thinks he can eventually get CSN Houston to a low enough rate (across the board), that can far offset the benefit of short-term subscribers they might get by offering CSN Houston before competitors.
The RSNs that have fallen under the new pricing structure are in the northeast or LA. Sorry, but Houston just isn't in that category. Also, sports channels are now consistently overvaluing their channel. If you don't believe that, then ask yourself why so few people get the Longhorn Network on their system. It is because the programming on that channel does not appeal to enough subscribers to justify the additional cost. As for an overall a la carte model, if that happened, the cost of each channel would be borne by fewer subscribers. This would result in a higher cost per subscriber and you would get fewer channels at the same cost. Incidentally, it is also common sense that if you are operating a competitive business driven by subscribers, and you can add a channel at a reasonable cost that your competitors do not have, you add it to increase market share. Any CEO that would not do that should be fired immediately.
It's irrelevant where they're located unless you have evidence that Houston is seeking a similar price to those other RSNs. This is where your stubborn belief in the $3.40 figure comes into play. If CSN Houston is seeking a proportionally lower amount, what's the problem? The LHN is a poor comparison because there is zero precedent for a single university-specific network being picked up by a cable provider. On the other hand, there are hundreds of examples of regional sports networks based around multiple professional teams. Not necessarily. The cost of each channel would go up, certainly, but there's a point where if you ordered few enough channels, it would be below the current basic tier amount. It's about having the option -- the same principle they're speaking of when they spout the "sports tier" nonsense. Not if you think the money you would gain from that increased market share is less than the money you will eventually gain from the channel lowering its asking price.
To be clear, my "stubborn" belief is not in a specific figure. It is in that CSN is seeking a price in excess of the previous RSN that the providers will not accept. That is clear. Your stubborn belief that it is some coordinated effort by direct competitors to turn down a fair offer is much less plausible. Who benefits from a prolonged dispute? Comcast. Look at the people in this very thread that have said it has dragged on too long and they are switching to Comcast. Comcast wants to increase their market share like everybody else. It really isn't that difficult. At some point, lines must be drawn. If not, then once they agree to exorbitant fees from CSN, PAC 12, and eventually the SEC, then cable bills will rise to an amount where consumers become very price reactive. What we will eventually end up with is all sports (including local sports) being part of a package that will be very expensive or some kind of government intervention.
Have you not read Clutch's posts? CSN Houston isn't in the business of trying to make a play for Comcast to get more subscribers. The footprint the Rockets need to be in extends FAR AND BEYOND where Comcast is available. This is much bigger than just the Houston metro area. Why not draw the line before it all starts, then? Or draw the line on things besides RSNs?
You draw the line on sports for the simple reason that sports are the fastest rising portion of cable costs. Cable providers have drawn lines on things other than sports. Various providers have had stalemates with Viacom, Fox and others. Usually it settles at a smaller increase than what the channels wanted, but still an increase. Why do the RSNs think this would be different? Because sports fans tend to be vocal and completely emotionally invested in their team.
These Billionaires should be ashamed of their self. Completely unacceptable for any professional team to allow this. And not to mention being handcuffed by the other local pro team in the area is unacceptable. 70% of Rockets fans aren't even Astros fans. Should have never came to this. Especially after a lock out season when fans were already robbed of watching games.
Pretty lengthy read from the Chronicle http://www.chron.com/sports/more/article/Conspiracy-theories-cloud-CSN-s-distribution-4208482.php
Oh snap. Rockets CEO, Astros President, and the CSN Houston President just called our own Jeff a liar. Screw the Axis powers and their evil schemes. Screw Comcast, screw the Rockets, screw the Astros and to hell with their greed and lies.
I like this part. As the teams counsel fans to direct their ire toward distributors, they also counsel patience for CSN Houston's long-term future. Although the network itself is new, the Rockets and Astros have been negotiating TV deals in concert since 2003, and both say the shared venture is critical for the future success of both franchises. Fans, your money is critical to us making more money and appreciating the value of our franchises so we can sell them one day and be even more filthy rich.. Nyuk nyuk nyuk... This is funny too. Apparently regional networks make you championship contenders. I guess this is why the Blazers don't win titles, not enough money from their RSN. "This is the model that works." Postolos said. "All the most successful teams in our league have affiliated regional sports networks. We went down this path because we want to be successful and bring multiple titles to Houston."
