BY Art Thiel 04:29PM 08/13/2013

Thiel: Pac-12 making TV argument it won’t win

The Pac-12 is spending some free-flowing cash on a regional ad campaign to get DirecTV to quit in favor of its network. Why would many viewers surrender better programming?

The Pac-12 has picked a fight with a foe, DirecTV, that has its own air force, as seen at an airfield in North Carolina. / Wiki Commons

The Pac-12 Networks are beginning an advertising campaign to get West Coast college football and basketball fans to tell DirecTV to drop dead. To which DirecTV will respond with a yawn so powerful that it may alter the Earth’s rotation.

The reason: When it comes to the satellite distribution of popular play-by-play sports programming, DirecTV is the biggest SOB in the valley. As the nation’s largest satellite TV service, with more than 20 million subscribers, it doesn’t need the Pac-12 Networks at the price sought by the regional purveyor of non-profit amateur athletics.

One good thing from the year-long dispute is that the Pac-12 Net is making so much money it can afford to throw some at ad agencies to make its futile argument. Ad creators need jobs too. As with journalists, it is not good for the public to have a lot of them on the streets. It’s a matter of civic hygiene.

The “Compare” campaign (see link above), which debuts Monday on broadcast and cable TV, social media and print, is tailored to each of the 12 markets and plays on each mascot. In western Washington, the “Huskies” on DirecTV are portrayed as real dogs pulling sleds. Then a narrator interrupts the documentary-style presentation with this script over an image switch to Huskies QB Keith Price: “These are the kinds of Huskies you’ll see on DirecTV. These are the kind you’ll see on Pac-12 Networks. If you want every Washington football game, you don’t want DirecTV. Drop DirecTV and get Pac-12 Networks today.”

Clever, but unlikely to cause DirecTV to go all Yosemite Sam.

Part of the smugness comes from the ability of satellite TV to deliver a signal to any household/business with a dish. Cable from Comcast or Time Warner typically needs to drag a line to each customer, which is cost-effective in urban areas. But Pac-12 geography is the college nation’s largest, with the least population density. The cable companies can never reach full saturation.

The rest of the smugness comes from the fact that DirecTV offers exclusive content in other sports that has proven very popular. The big draws are NFL Sunday Ticket, which provides every out-of-market game, and for premium subscribers, the Red Zone Channel, with every scoring play, all in HD.

The MLB package includes Extra Innings, up to 80 out-of-market games a week. Then there’s other specialty offerings such as NBA League Pass, NHL Center Ice, MLS Direct Kick and a welter of other sports, including other college football and basketball.  Bundled into DirecTV’s standard offerings are the same ESPN channels available on expanded basic cable packages.

So for the serious sports fan among DirecTV subscribers, as well a niche fan that favors one sport, the ask of the Pac-12 Networks is large: Give up all the choices DirecTV offers for single conference’s football games. Yes, men’s basketball is available too, but the ardor is much less for hoops, and it’s practically non-existent for all the non-revenue sports that fill the rest of the 24/7 TV calendar. The Pac-12 Net reruns a lot of football games, but fans who can’t watch a game live usually take the option of recording to play back at a time of their choice.

Pac-12 Conference commissioner Larry Scott bleats that the Pac-12 carriage deal was good enough for 55 other carriers in the West. The net is charging distributors about 80 cents per in-market subscriber. But that’s too much for too little, in the view of the big dog.

Reports in the industry trades suggest DirecTV has offered to carry the Pac-12 Net as a separate channel rather than in a programming bundle, for a separate monthly fee. But the conference has resisted because it would mean fewer viewers and fewer advertising dollars.

Jon Wilner of the San Jose Mercury News reported that DirecTV, headquartered in Lakers country at El Segundo, CA., gets $3.40 per sub for the Lakers. But the Lakers started at $3.95 until DirecTV held firm. And it gets so much per sub because it’s the Lakers,  and it’s LA.

DirecTV puts forward its position on its website: “We have the same passion for sports as the most loyal fans and want to add Pac-12 Network, but DirecTV has not joined other providers in accepting Pac-12′s high price for two reasons:

First, we cannot allow all of our customers to absorb price increases well beyond the nominal adjustments we make to their monthly bills.

“And second, we believe very strongly that when a channel’s cost is too high, our customers must have a choice over whether they want to pay for it or not. Unfortunately, Pac-12 doesn’t see it that way and has been withholding games from its most loyal supporters to force everyone to pay its unnecessarily high price.”

If the Pac-12 should knuckle under to DirecTV’s price, then it would be obligated to offer the same price to other carriers, or risk rage among them. Obviously, the Pac-12 has decided that it would rather spend money on an expensive regional ad campaign than lose money over the longer term by giving in.

I imagine the campaign might induce some fans of one sport in one conference to abandon DirecTV. But Scott’s been at it a year and hasn’t drawn away enough subscribers to make the satellite-sports kingpin care.

Ask yourself what would it take to get DirecTV to care: Say, a five percent loss of national business? From a subscriber base of 20 million, that would be one million customers abandoning the dish for something else in a region where cable access is more limited than most. I’m a little skeptical, because there’s only 1.4 million DirecTV subscribers in the Pac-12 region.

Upon its one-year anniversary, the Pac-12 Net is running with the big boys in the national sports scene. Remember that DirecTV was the owner of Root Sports, and the parent company was financially secure enough to sell majority interest in the regional sports network to the Seattle Mariners, its anchor programming. DirecTV wouldn’t have done it if wasn’t coming out ahead.

DirecTV plays a lot of hardball. It also has so far refused to agree to terms with the new Fox Sports 1, the much-discussed competitor to ESPN that launches Saturday. It has held out against the regional sports network in Houston, a Comcast-owned property that carries the Astros and Rockets, and held out against carrying the Blazers in Oregon. UPDATE: DTV and Fox Sports 1 reached agreement Thursday, carrying the the new rival for ESPN at 23 cents per subscriber. FS1 had been asking 80 cents, and caved in order not to lock out viewers from the start.

And soon a real test of its steel will be upon DirecTV — the deal with the NFL for the lucrative Sunday Ticket franchise is up after the 2014 season.

So the Pac-12 has picked a fight with a formidable adversary used to big-boy brawls. If the campaign doesn’t work, it might be time for Scott to consider whether the Pac-12 is smitten with its own wonderfulness.


YourThoughts

  • Bud Denney

    Where I live there is no other choice. DTV with the NFL ticket or nothing. I’d pay to see the Pac-12 but big brother DTV seems to want to protect me… grrrrrr….

    • Tony Bruin

      Not to protect you but all the other DTV subscriber who do not care about sports, it’s the PAC12 that is keeping DTV from offering you an ala cart purchase of the PAC12 product.

      • art thiel

        Pac-12 doesn’t want a la carte, but if it is so confident of the popularity of its product, that maybe be a better long-term solution than a public pissing contest.

        • moreknowledgethanyou

          If DTV says they will offer it a la carte, then why won’t they offer the channels that I won’t ever watch a la carte? Simply not fair…

      • moreknowledgethanyou

        Ummm…it’ll be on a sports tier, meaning that you persumably will be a sports fan to get the channel

    • art thiel

      There are many in your position. I guess we’ll find how many, and whether it’s enough to make a difference.

  • Moo

    Love the pac 12 but no way I switch just to see 2 tier games while the bigs are on espn. Definitely not going to drop nfl ticket for it. Pass.

    • art thiel

      Many tastes in the marketplace, and if you are part of a big majority, the campaign doesn’t work.

  • SaferInWestwood

    Larry Scott needs to let it go, I hate to say it but the Pac12 is NOT the SEC!!!

    • art thiel

      Pac-12 fb is a worthy commodity, but not so cool that everyone buys at any price. To campaign publicly against someone it wants to partner with may bring a little backlash.

      • SaferInWestwood

        I agree

  • Masoniclodge

    Does everyone know you can get PAC 12 network on dish. Dish also carries MLB extra innings, NHL center ice, NBA league pass and MLS direct kick. We also get NBC sports, Fox soccer channel, MLB network, nfl network, nba network and NHL network. Ya, if Sunday ticket is really a must that’s really the only difference.

    • art thiel

      Good to point it out Masonic. Dish did join the other carriers, and I’m sure that some P-12 loyalists who live where there is a choice will make a move. But I suspect most would have done so last year. Not sure how many more the new campaign would pick up.

  • YouDontGetIt

    Here’s the bottom line…the PAC12 overvalued itself and, in so doing, made the ultimate MountainWest-esque mistake. DirecTV will not cave in to Larry Scott and he is going to have to go back to his league presidents with his hat in his hand and egg on his face.

  • YouDontGetIt

    Here’s the bottom line…the PAC12 overvalued itself and, in so doing, made the ultimate MountainWest-esque mistake. DirecTV will not cave in to Larry Scott and he is going to have to go back to his league presidents with his hat in his hand and egg on his face…

    • art thiel

      Direct, public confrontation from a position of weakness is usually a business mistake.

    • moreknowledgethanyou

      I don’t think agreeing to terms with almost 60 carriers including 4 of the biggest 5 in the nation is overvaluing oneself.

  • Jay

    The article contains a few errors. DirectTV has an exclusive with Sunday Ticket but not with RedZone. Almost all carriers have it now. Also, most carriers have the mentioned “other specialty offerings such as NBA League Pass, NHL Center Ice, MLS Direct Kick and a welter of other sports, including other college football and basketball.” I don’t disagree with the points about the PAC12 network but to proclaim DirectTV as some sort of sports watcher’s dream is a misrepresentation.

    • art thiel

      You’re right, the premium offerings are carried elsewhere. I was looking at it from a narrower point of DTV vs. P12. Thanks for the clarification.

  • RadioGuy

    The “Drop DirecTV” campaign is an exercise in tilting at windmills because DTV isn’t going to back down. Maybe a better alternative would be to go around DTV by streaming telecasts online on the PAC 12 website via low-cost PPVs or monthly subscriptions (with on-demand archived games also available to subscribers) and spending money to promote that instead of bashing DTV. Maybe they already do, but I can’t find it on the conference website.

    Making your product available to viewers on your own website? What a concept.

    • art thiel

      The DTV bashing seems a clumsy attempt at a power play that isn’t going to work. I think the subscription stream will eventually work, but there are many in the over-50 crowd — meaning, most of the boosters — who are reluctant buy-ins.

      • RadioGuy

        True enough. My mom graduated cum laude from WSU and became a Boeing exec but somehow managed to avoid becoming the least bit tech-savvy in 30+ years at the Big B…and she’s far from the only one from her generation like that.
        DTV is in the driver’s seat with the PAC 12, although they shouldn’t get too cocky about being in 1.4 million households in a region with a population of more than 60 million people. In the big picture, neither side is really dealing from a position of strength.

  • Will

    It’s a wonderful thing – I do not subscribe to, nor have I ever watched, DirecTV or the Pac-12 Network.

    All I have is an old-fashioned TV aerial (it’s HD) on the roof of my house… of course I do have Apple TV, YouTube and access to all the over-indulgent internet sports stuff.

    Bread and Circuses, Bread and Circuses.

    • art thiel

      The distribution of content over so many channels and platforms, and the prices asked and paid, are in the next several years a storyline nearly aas prominent as game outcomes.

  • dorian1963

    DirecTV lost a premium subscriber for life. I am more than fine watching RedZone and an online stream for my NFL game. Switched to Dish whose product is superior in every way. Could not be more happy. Will never go back to DTV.

    • art thiel

      Nothing like consumer testimony. It’s too bad that for those who like DTV, it’s an either-or proposition.

  • PAC12 Fan

    My understanding is that the PAC 12 is not asking any more than the Big 10. Why do I have to pay for that? I am fine with paying ala carte for the PAC 12 just let do that with all the other channels that I don’t want.

  • Pixdawg13

    Your next-to-last paragraph needs updating. “DirecTV plays a lot of hardball. It also has so far refused to agree to
    terms with the new Fox Sports 1, the much-discussed competitor to ESPN
    that launches Saturday. It has held out against the regional sports
    network in Houston, a Comcast-owned property that carries the Astros and
    Rockets.”

    DTV and FS1 agreed to terms yesterday, so DTV subscribers will be able to see the UW-BSU game that opens the rebuilt Husky Stadium on 31 August.

    • art thiel

      Thanks. Done. DTV forced FS1 to accept 23 cents per subscriber. FS1 was asking 80 cents, and caved.