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"Sports networks squeezed by rising costs and fewer subscribers"
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Frank the Tank Offline
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Post: #101
RE: "Sports networks squeezed by rising costs and fewer subscribers"
And look - speaking of that TV executive career, there's a realistic human element, too.

No one gets fired by putting the top brands like Alabama, Ohio State or Notre Dame in prime time. If it ends up being a bad game or blowout, no one is going to blame the TV executive if that gets a subpar rating.

In contrast, the TV executive that passes over an Alabama/Ohio State/ND game in favor of an AAC game in prime time is putting their neck on the line. If it ends up being a bad game or blowout, that TV executive might be getting fired if it gets a subpar rating.

This isn't just a college football thing. Even in pro sports, you can see the constant complaining from fans of, "Why is ESPN/NBC/CBS/FOX showing *another* Cowboys/Yankees/Lakers game when [insert my favorite team here] is actually better?" No one gets fired for putting a Cowboys game on that happens to get a bad rating. If you put on a Jaguars game when you could have otherwise had a Cowboys game, though, you better hope and pray that the Jags game doesn't bomb.

Heck, this isn't even a sports thing. Look at the movies that are getting made and how they're disproportionately tied to pre-existing IP like Star Wars, Marvel, DC, etc. We had sequels growing up, but there was still a critical mass of large budget non-pre-existing IP movies coming out every week. Now, it's super rare to get any non-IP-related movie to get anything more than a tiny budget. Anyone that greenlights a large budget non-IP-related movie today is literally in "I'm betting my career" mode because they're completely gone if the movie doesn't sell.

The upshot is that large brands are becoming even MORE important in an increasingly fragmented world. The paradox of a world where there are so many different entertainment options is that the handful of big brands that still carry weight actually have increased in *relative* value over everything else.
(This post was last modified: 05-17-2022 12:02 PM by Frank the Tank.)
05-17-2022 12:01 PM
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Hokie Mark Offline
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Post: #102
RE: "Sports networks squeezed by rising costs and fewer subscribers"
(05-17-2022 11:07 AM)Frank the Tank Wrote:  ...the value proposition of advertising on linear TV (especially today when there's targeted digital ad competition on Google, Facebook, etc.) is to reach as large of an audience as possible at a *single* time. It's much more effective to show one ad to 5 million viewers than to show 5 separate ads to 5 separate 1 million viewer audiences, which is reflective of the premium provided to the 5 million viewer show. There's a large universe of shows that can garner 1 million viewers, so those are essentially commodities. However, there's a relatively small number of programs that reach 5 million viewers or more, so they receive outsized premiums.

It's one of the largest mistakes that I see in these media deal discussions: the average Conference A game that has 50% of the viewership of the average Conference B game does NOT mean that Conference A is worth 50% of the value of Conference B. Instead, rights fees go up exponentially with higher viewership where Conference B is really worth several multiples of Conference A.

With sports, I'd say it's even a bigger difference because the five 1-million-viewer games may actually be same 1 million people. No advertiser wants to pay 5 times to reach the exact same audience. But with 5 million viewers, you're reaching 4 million NEW people.
05-17-2022 12:10 PM
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