I said top out at 30M with it likely to be 10-12M in actual sub prices. That would be 300k people paying 100 to watch the Astros- that strikes me as the absolute top end number based upon how many people watch games right now. They pull like a 5 or 6 share in houston day to day on (sort of) free tv. There would be people outside the metro area watch, but way more would refuse to spend 100 on a stand alone Astros deal right now.
Sure- but the audience would be limited and commercials are worth way less than you think. The Astros make more money from people not watching them on cable than they would based upon only the people that want to watch them paying for them. production costs are a b****. it doesn’t make sense for almost anyone which is why it’s so few. I have a little insight into the Suns doing this and it’s currently a bloodbath for them.
No disrespect and I don’t really have firm standing for it, but I’m very skeptical of your estimate. Teams running their own broadcasts might not be the exact same revenue as some of them were getting in the heyday of cable, but I just can’t believe they can’t get close if they get all the profit from the subs rather than a small fraction of a cable sub. I know some of those RSN deals were too good for the teams which is why many of the RSN’s went under, but Houston’s deal was not that rich since it came up after the party was just about over. Either way, cable isn’t coming back so teams will either have to creat their own streaming service or sell out to the highest bidding existing streaming service. I can’t envision Fubo (or something like it) being a sustainable option. There’s a reason MLB is acquiring as many teams’ rights as they can.
Look at what a 5 share is in houston. Thats more or less the tops. Multiply that by 100. That’s more than what the Astros would get from running their own service in subs. Cable isn’t dead. They are getting something like 75 or 80M from their RSN, with no production costs, which just dwarfs the numbers you are talking about. Crack open the calculator and do simple back of the envelope math. Yeah/ the 75 or 80M for us sucked compared to lots of teams going 100/200/300 million from the rsn’s but it blows out of the water what we’d get. From streaming. Or, out another way/ there’s a reason nobody is doing what you want them to do (absent Cleveland) and it’s not because they didn’t think about it. It’s a loser. mlb is getting rights because it’s better than massive defaults from other places. we did a segment on economics of baseball that was the best thing we ever did on breathing orange fire. December of 23 Episode 42.
Where are you getting your $75M-$80M number? I don’t think the Astros are currently making that much.
The Astros currently own their network and are footing the bill for the production costs. The commercials they show during the games now would be the same commercials/adveritising that would show up on a streaming version. The only thing the cable/satellite RSN model has is the potential for built-in viewers based on existing subscribers…. Many of them already streaming the games via their cable/satellite platform. MLB was at the forefront of the streaming platform offerings back in 2001. They just had to cater to the RSN model with blackouts. Get rid of that and the market is very much still there 24 years later.
The expectation was in 2+ years, they’d see a ROR closer to what they were getting at the end of their rights fees run. Inflation, advertising rate increases, and efficiency of production costs was to account for that.
So the theory is that the Astros are making way more money selling carriage deals to RSNs for their own network (deals that were set up within the last 2 years) than they would by taking that same network and offering it direct to consumers? Sorry, I just don’t believe that.
Nah, they’re making more off advertising as rates go up (based on viewership) as well as new advertisers wanting to get in on it. They got grandfathered into the distribution, which is what doomed the old CSN…. Those rates are pretty fixed. Ultimately if they offered streaming, that could see an increase of there they are now, minus the cost of the distribution platform.
Additional new sources of revenue: Future hotel/entertainment district next to ballpark New naming rights deal for ballpark Continued escalation in ticket prices compared to 2015-2017. Crane keeping the payroll as high as it’s been the last few years isn’t simply due to his competitive juices. They’re paying based on their revenues.
Yeah dude- that 73M that Schwab has us “losing” was our take/ which is basically the exact number I cited. He’s pretty wrong about almost everything and as Nick said later the number (and I assume it ended up working out that way) was expected to be basically back to that RSN number almost immediately. Based upon spending the last couple years I would be firmly in the camp that this supposition was right and they are getting that kind of money. Let’s see if anyone of note that’s not a broke ass poverty franchise starts doing that. Again- the numbers at 75/80/90/100M that the Astros are likely getting dwarf the streaming numbers. The distributors were getting $60 a month for every single sub in the greater houston area on that particular channel and the Astros were driving almost 100% of that. They aren’t getting a tiny little slice they are getting most of the slice on that/ that’s how you get that number up around 100M.
Yes, but a small cut from a much larger pool of people. Those 3rd parties aren't taking it on the chin. The Astros aren't taking it on the chin. Those $500 dollars per person are going to someone, and I doubt Crane is letting the 3rd parties get all that money. Assuming there are 100,000 people willing to dump cable for this package ($10M in revenue for $100/person), that's $50M currently going to someone minus costs. If it is $100M in revenue, that is $500M in money going to someone minus costs. I just don't see how fans can pay only 17% of the price and the Astros not lose a lot of revenue. The Astros had the option in the last 10 or so years to dump 3rd parties and do this. They choose to get tied up in a mess instead of doing this option. Considering MLB developed the technology that is now the backbone of Disney+, I think Astros had this option.
