Monday, December 31, 2007

second thoughts on the nfl's second thought

looking back to what i mused about the future of the nfl network and how it could control all aspects of production and license out the content, i have some elaboration to add and some slight backtracking that could make the idea more fungible.

first, it needs to be said that if this game hadn't become historic, the nfl needed a reason to make it so. one of the advertising themes you couldn't miss no matter how many times you left to whiz or grab another microbrew (take that national advertising!) during the commercial breaks was the networks self-promotion and gentle insistence that we viewers lay siege to those greedy, monopolistic cable companies and let them know how badly we wish for the nfl network as part of basic cable god-given rights. these ads have been running during the broadcast networks' packages too, but this was a seven-man blitz taking advantage of the three-network simulcast. time will tell whether this blitz sacked the cable companies or left a receiver wide-open for the touchdown, but to be sure, the network did everything it could to exploit this swollen and mostly captive audience.

now, it need to be restated that this game was scheduled for the nfl network before the season began, so despite the odious avarice of the nfl in trying to leverage itself onto the cable companies, this was simple avail, not machination. but this was a case of the nfl, smartly, making the most of a fortuitous and felicitous circumstance. we may well look back on this felicity as the moment when the business model for the network changed. 

this may reshape how the nfl packages its product. that is the primary point, selling the product. this is well understood by the league. has been since pete rosell. they marketed the product, the games and its players, to ever greater heights of revenues for the league from its television licensing. then, a cadre of owners, spearheaded by that most ambitious of owners, jerry jones, thought of how to wring further monies out of the product by creating its own cable entity. the yankees' YES network will always be known as the stalking horse for this model: capitalise on high-demand product by taking its broadcasts in-house and keeping all that revenue it had been sharing for itself. and there can be no doubt of its success as the network is now more valuable than the yankees itself. the product is more valuable than the producers.

while the nfl has long envisioned doing the same for itself and its network, the owners have as yet been unable, through heavy-handedness and hubris, to get the cable companies to play along in their master plan. quite rightly, the cable powers have held the owners at bay by playing the same hand they had with the yankees and their network. they say this is a specialty network that their average customer doesn't want or need and so it can either stand alone or as part of a tier package that subscribers can opt into (increasing the cable companies' revenues and massaging their egos as gatekeepers for what gets on the air). the yankees advatange that the nfl doesn't have right now is that once the YES network was on the air, there was almost nowhere else to see yankees games. so the cable companies, knowing there was, in fact, demand for the network, capitulated, and the YES network has been part of basic cable for the last 5 years. unfortunately for the nfl, there are literally a baker's dozen of games broadcast elsewhere than their network every week of the regular season, so they can't pull the power play that the yankees did.

which brings me to what i think could be the new model of syndication and licensing for this pubescent network. taking from the example of this saturday's broadcast, the league could bring all the production of their games in-house and license the broadcasts to both national networks, and local stations. one of the major problems fans have with the league now is they don't always get their local or regional team's games on their local channels or at all. the syndication package, "nfl league pass" on directv, was the initial effort to combat this, offering every game every week to directv subscribers. but...well...see the problem with direct tv is that not every fan can get it. fans in urban settings don't always have the option because of obstructed paths to the satellites. and there are other complications like dislodged discs that can't recevie the signal. so, millions of fans are still watching out of town games while their favorite teams play in obscurity. 

but imagine a nfl network that, just like the YES network, provides a complete broadcast from play-by-play to sideline reporters to the trucks, and the sells those broadcasts to the big three and their local affiliates while selling or splitting the ad revenue. the big networks could get one or two major games per week, that could be decided in exactly the way the sunday night games on nbc are now: the most compelling games with the greatest interest. they get the large national audience they want and they don't have to shoulder the expense of producing the broadcasts. and depending on the deal each network negotiates they might have to split the ads with the nfl, but losing the cost of production might well make it worthwhile since the broadcast fees they pay now measured against the cost of putting the games on-air make the broadcasts a losing deal in the end. the local affiliates could ensure that they would always get their teams' games every week and split the revenues with the nfl, but imagine what they could generate in terms of local and regional advertising dollars if they could send their sales force out with a guaranteed nfl audience every week. and of course, the league itself benefits not only from the increased dollars per the YES network model, but from increased control of their product. if they produce every broadcast, they control all the content and the entire image of nfl. tell me they don't want that.

the only losers? directv. but honestly, they're going to get cut out eventually anyway. why have an nfl network if you're going to continue to make directv the exclusive partner for all broadcasts? doesn't make sense.

so, there we have it. a new model of the nfl network that makes fans happy, makes the broadcast networks happy, and makes the owners happy. seems like a mighty tempting revisioning (corporate-speak) for the still meaningless nfl network that could make it into one of, if not the, most important and largest cable entities ever.

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