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I understand that a fair amount of revenue for the NBA is probably coming from the deals it made with TNT, EPSN, and Fox, but a viewer is a viewer, whether they

I understand that a fair amount of revenue for the NBA is probably coming from the deals it made with TNT, EPSN, and Fox, but a viewer is a viewer, whether they're watching from the net or through traditional venues - why do they care, so long as their advertisers are getting enough eyeballs? Not "some" all of NBA's TV Revenues come from selling the rights to networks. The networks sell the ads, and they're the ones that care about eyeballs. So the networks care if you start streaming local market games and they're going to try to prevent that. If the NBA allowed you to get your local market games via streaming it would undercut the product they sell to the various networks which is their primary source of revenue.

marknutter 15y ago
The NBA is basically promising these networks they will bring them eyeballs. By offering league pass to all customers without restrictions, and passing on all ad revenue to the network which holds the right to that specific game, they increasing their ability to deliver on the promise. For instance, if a game is televised on TNT, but X number of potential viewers don't have cable TV but do have internet access, by allowing them to watch the game online they are bringing even more users to TNT (passing all or most of the ad revenue less hosting expenses to TNT). Seems like a fairly straightforward solution to me. My assumption is that the powers that be aren't technologically sophisticated enough to understand the benefits of it.
- mikeryan 15y ago
  Seems like a fairly straightforward solution to me. My assumption is that the powers that be aren't technologically sophisticated enough to understand the benefits of it. This isn't the case, most networks are extremely technically sophisticated (ESPN especially) the misunderstanding here is business related. TNT and ESPN make millions (in ESPN's case billions) a year in subscriber fees from cable operators. ESPN alone makes $3-5 from each cable subscriber in the US (there's about 120M of them) each month. A significant portion of these network's revenues are made on subscriber fees. The solution you propose jeopardizes these agreements for what would currently be a paltry amount of streaming ad revenues.
- xsmasher 15y ago
  The NBA is promising these networks a product that they can attach advertising to and re-sell. The league pass devalues game in the eyes of TNT - they can't resell the content to local cable providers to attach advertising to. If they want to cut out two middlemen (the network and the local cable provider) then the NBA must learn to create a steady audience and get money from advertisers, which is a different skill than putting on ball games.
anigbrowl 15y ago
Correct. All the major sports organizations work this way, and it makes sense from a standpoint of comparative advantage. Of course, it's horribly monopolistic and anti-consumer, but on the other hand consumers could also start patronizing other sports leagues instead...except they don't want to.

marknutter 15y ago

The NBA is basically promising these networks they will bring them eyeballs. By offering league pass to all customers without restrictions, and passing on all ad revenue to the network which holds the right to that specific game, they increasing their ability to deliver on the promise. For instance, if a game is televised on TNT, but X number of potential viewers don't have cable TV but do have internet access, by allowing them to watch the game online they are bringing even more users to TNT (passing all or most of the ad revenue less hosting expenses to TNT). Seems like a fairly straightforward solution to me. My assumption is that the powers that be aren't technologically sophisticated enough to understand the benefits of it.

mikeryan 15y ago
Seems like a fairly straightforward solution to me. My assumption is that the powers that be aren't technologically sophisticated enough to understand the benefits of it. This isn't the case, most networks are extremely technically sophisticated (ESPN especially) the misunderstanding here is business related. TNT and ESPN make millions (in ESPN's case billions) a year in subscriber fees from cable operators. ESPN alone makes $3-5 from each cable subscriber in the US (there's about 120M of them) each month. A significant portion of these network's revenues are made on subscriber fees. The solution you propose jeopardizes these agreements for what would currently be a paltry amount of streaming ad revenues.
xsmasher 15y ago
The NBA is promising these networks a product that they can attach advertising to and re-sell. The league pass devalues game in the eyes of TNT - they can't resell the content to local cable providers to attach advertising to. If they want to cut out two middlemen (the network and the local cable provider) then the NBA must learn to create a steady audience and get money from advertisers, which is a different skill than putting on ball games.

anigbrowl 15y ago

Correct. All the major sports organizations work this way, and it makes sense from a standpoint of comparative advantage. Of course, it's horribly monopolistic and anti-consumer, but on the other hand consumers could also start patronizing other sports leagues instead...except they don't want to.