Dear NBC: Take My Money For NBC Sports Live Extra, Please
Like many other Americans who follow the Premier League closely, I’ve been reading the news about NBC’s plans for their coverage next season with great interest. For the most part, it sounds like a great improvement over what FOX Soccer has been bringing us. But there’s one aspect from their recent press releases I want to call attention to, and that’s their online coverage options:
“NBC SPORTS LIVE EXTRA: Every Barclays Premier League match will be streamed live via NBC Sports Live Extra, the NBC Sports Group’s live streaming product for desktop, mobile and tablets and, in most cases, on the digital platforms of participating cable, satellite, telco and other video subscription services. The vast majority of Barclays Premier League matches will be streamed via “TV Everywhere,” available on an authenticated basis to subscribers of these services.
NBC Sports Live Extra provides a primary and second screen experience across mobile, tablet and desktop, delivering high quality video, match/player stats and video highlights while aggregating Premier League content from social media.”
In layman’s terms, all games will be available online and on mobile devices in high quality for free IF you are already subscribed to the channel through a TV provider (and if your TV provider has an agreement in place to provide NBC Sports Live Extra to you as a consumer). From their press releases, NBC Sports have yet to commit to any online option for those who are not cable or satellite subscribers.
Here is where the problem exists for me. I don’t have a cable or satellite package. The cost is not worth the product for me. I have had Comcast and DirecTV in the past, but cut the cord a few months ago. When you include taxes and fees, and sports packages, and the cost of renting HD boxes and DVR, my monthly bill was starting to approach $100/month. It’s simply not worth the cost that I was spending — living by myself, especially for someone who doesn’t do much with his TV subscription except for watching live sports. I’ve since switched to FOX Soccer 2Go for my soccer watching until the end of this season. And while not perfect, it still does the job with multiple platforms and most matches live (though not enough of the marquee Premier League ones).
For next season, NBC is going to be missing out on a substantial amount of revenue if they don’t offer an a la carte Internet streaming option for people like me. The NBC Sports Live Extra internet plan sounds great, and I’d be willing to spend $15-$20 a month on it, but I’m not going to spend the $60 or so (minimum) a month it would cost me to just have access to it. FOX Soccer 2Go reportedly has 60,000 subscribers, and if you multiply that by the $170 yearly fee, that’s over $10 million in revenue per year that FOX Soccer generates just off its online streaming option.
So why isn’t NBC saying they’re going to offer the Internet-only plan? Does it have anything to do with the fact that Comcast owns NBC and wouldn’t like to make it easier for those to do what I did, cutting the cord by not subscribing to a cable plan? Probably. But let’s look at this a little deeper. A cable TV channel has two major revenue streams. The first is selling advertising (mainly commercials). The second is subscriber fees paid to the channel by the television providers which carry it. That second number is negotiated between the provider and channel based on viewership and other factors like leverage.
It’s especially interesting to see specifically the amount that a TV provider pays each channel per subscriber. You can certainly see how ESPN has been able to dominate the sports market, that’s for sure. If this site’s information is correct, then the NBC Sports Network gets 31 cents per month from TV providers for every customer who has the channel in their package. Coincidentally, that’s nearly double what FOX Soccer gets ($.16). That breaks out to $298M (million) per year in total subscriber revenue for NBC Sports Network, and $79M/year for FOX Soccer. When you add in my estimate of $10M/year from FOX Soccer 2Go, you can see that FOX has been making a good portion of its revenue from the streaming option.
I know NBC/Comcast will argue that they will be cannibalizing their cable business by offering an a la carte option, but I think that thinking is seriously misguided. Cord-cutting is a growing phenomenon. Approximately 3.74 million US TV subscribers cut their TV subscriptions from 2008-12, or 3.7% of the total subscription audience. We’ve decided that we can get enough of the shows we want through streaming, and still have good options for streaming sports we want (I pay for MLB.TV), combined with what we get over the air for free. Unless an a la carte cable option is on the horizon, we’re simply not coming back. For soccer junkies like me who are also cord-cutters, we’re just not going to pay for 100+ channels we don’t watch just to get access to the soccer we do watch. And one more thing, NBC should be considering that not only is cord-cutting on the rise, it skews much higher the younger you are. Coincidentally, so does the ratio of soccer fans in the USA.
So NBC, here is my plea: You’re already rolling out what sounds like a high quality, comprehensive Internet coverage plan for the Premier League next season. High quality streaming sure beats dodgy Internet streams with pop up ads and poor quality that buffer and cut in and out. Let us pay for it.