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08 Aug 2006

Time Warner vs. NFL Network

by Michael David Smith

The NFL Network will go from a luxury item to a must-have for football fans when it begins carrying regular season games in November. But millions of Time Warner and Cablevision customers in New York will miss out if the network and the cable companies can't resolve a battle over the fees charged to subscribers.

The NFL scored one round last week when the Federal Communications Commission forced Time Warner Cable to put the NFL Network back on cable systems it bought from Adelphia and Comcast. But the FCC's ruling doesn't affect the New York market, where most cable customers in the city and outlying areas have never had the NFL Network.

The dispute centers around Time Warner's desire to put the NFL Network on a more expensive premium tier, rather than making it part of the basic package, as it is on other cable systems and DirecTV. Cablevision has kept a low profile on the issue, but Time Warner has launched a Web site, NFLGetReal.com, that encourages customers to complain to the NFL Network about its fees. The NFL says that it's Time Warner that needs to get real.

"They want to put us on a sports tier, with viewers paying extra," a spokesman for NFL Network, Seth Palansky, said. "No other cable system in the country carries us on a sports tier. We won't allow that to happen. We see that as a way of trying to extort NFL fans because they're passionate."

The NFL Network started two and a half years ago as a relatively minor channel televising news about the league, game highlights, NFL Films footage, and preseason games. It now reaches 41 million homes. That's less than half of the country's cable and satellite subscribers, but when the league announced that the NFL Network would broadcast eight regular-season games for 2006 on Thursday and Saturday nights in November and December, football fans increasingly requested that their cable companies start carrying the network. Time Warner says the NFL demanded that cable companies pay exorbitant rights fees for the network and include it as part of the basic package, forcing all subscribers to pay for it.

"We want to make the NFL Network available everywhere to all of our customers across the country,"a spokesman for Time Warner, Keith Cocozza, said. "We want to do this in the fairest way possible. Where we think the network belongs is on the sports tier."

Fans who just want to see as much NFL action as they can hope the two sides can compromise. Making the customers happy would seem like the best option for both the NFL and Time Warner, but a stalemate like the one in 2003 that forced millions of Cablevision subscribers to miss Yankees games on the YES Network is possible.

"Usually somebody blinks in this, but it can happen," the director of the Center for the Study of Popular Television at Syracuse University, Robert Thompson, said."We've had a World Series and an NHL season canceled because neither side would back down long after it was damaging to both sides."

The NFL Network might have the upper hand in the dispute for the simple reason, Thompson said, that viewers who don't have access to a network they want, usually blame their cable companies.

"People who follow this issue closely might see some of the nuances of the fact that there are two parties here not agreeing," he said. "But the immediate response is to pick up the phone and complain to the party you write a check to every month, and that's not the NFL, it's the cable company."

Before it had regular-season games, the NFL Network charged cable companies about 30 cents a subscriber each month. It now charges about 90 cents. Even though hard-core football fans find NFL Network every bit as indispensable as ESPN, the popularity of ESPN allows it to charge significantly more to cable carriers. ESPN charges about $3 a month.

"We're not anywhere near what ESPN charges," Palansky said. "We're not even in the same universe let alone the same continent in terms of pricing."

Both sides are hugely profitable enterprises.Time Warner last week reported second-quarter revenue of $2.72 billion for its cable TV unit.The NFL's new deals with Fox, CBS, ESPN, NBC, and DirecTV give the league more than $3.7 billion a year in television revenue even before its own NFL Network is included.

The NFL Network wants to be available on basic cable in millions of Time Warner and Cablevision homes because greater availability allows it to charge more for advertising. But it also wants to get as much money as it can per subscriber. Fans are caught in the middle, just hoping the dispute will get resolved before Thanksgiving, when regular-season games start appearing on NFL Network.

"Fans just want their channels," Palansky said."They don't want to hear about two companies fighting. They pay enough for their cable bills already and just want to get the channels they want. All the rhetoric and all the backand-forth is hot air."

Time Warner points out that even if it can't reach a deal with NFL Network, fans won't miss their local team's games because the league puts all games on broadcast television in the markets of the teams who are playing. So New Yorkers can watch the Giants play the Washington Redskins on NFL Network on December 30 even if the cable companies aren't carrying NFL Network by then. (The Jets do not play any NFL Network games this year.)

One reason the cable companies want to get a deal done is that if they can't reach a deal with the NFL Network, some customers will leave for satellite television. DirecTV, in particular, is an increasingly popular option with football fans because of its Sunday Ticket package, which gives subscribers access to every NFL game.

"In the old days a cable franchise could do what it wanted and you didn't have a lot of choice," Thompson said. "Now with the satellite option, Time Warner doesn't want to alienate its customer base because if people make that shift, they tend not to go back again. So they've got a lot at stake. And, of course, the NFL Network wants to maximize its audience reach so there's a lot at stake for both sides."

Still, satellite users are a minority everywhere in the country and especially in New York City, where many residents can't get satellite television either because they live too close to tall buildings that block the signal, or because they live in apartments with landlords who do not allow them to attach satellite dishes. That's why the NFL knows it needs the cable companies if it wants to reach New York viewers.

"Suffice to say," Palansky said, "We are not satisfied with our distribution in the largest market in the country."

This article originally appeared in the New York Sun.

Posted by: Michael David Smith on 08 Aug 2006

112 comments, Last at 28 Nov 2007, 12:32am by Rhett

Comments

1
by GlennW (not verified) :: Tue, 08/08/2006 - 11:13am

Almost $1/month per general subscriber does seem to be a bit much for the NFL Network, even compared to ESPN's $3/mo. The network's ratings aren't very high and even these new games are going to be relatively low-rated affairs nationally. Should every TV viewer in the country really be charged $1/mo (or an extra 60 cents) year-round because the NFL Network will now broadcast these 8 games, and frankly, not much else of interest for all but total NFL junkies?

2
by ibanez (not verified) :: Tue, 08/08/2006 - 11:21am

Personally, I don't care if I have to pay for a package that includes Lifetime Movie Network, Oxygen, WE, and all 6 NASCAR channels. I just want this channel by Thanksgiving. Yes, I am an NFL junkie

3
by Matthew Furtek (not verified) :: Tue, 08/08/2006 - 11:36am

I'm in Los Angeles with Time Warner. I'm pissed I don't have the NFL Network. I didn't realize the debate was a pissing match over the NFL not wanting to be on the Sports Tier. It looks like Warner doesn't want to give a rate increase for such a poor channel.

I think Cable A La Carte needs to happen Sooner rather than later... especially looking at the rates. I'd pay the $5 for my alphabet networks, plus $3 for ESPN and $1 for NFL Network. That leaves about $40 for everything else... probably $3 for TNT/USA/TBS and then $4 for HGTV-type fare, and maybe $4 for History/Discovery and $4 for Korean language channels. Those are conservative estimates... although I can see how if I got a bunch it would add up.

The fact I can't do this already, especially when the rates from content providers is seemingly public information is stupid. Way to go FCC.

4
by Chad (not verified) :: Tue, 08/08/2006 - 11:38am

It's an interesting issue. I wonder if it will end up being a continued expansion of the NFL's power, or if they'll start to over-reach their popularity.

5
by imsmith (not verified) :: Tue, 08/08/2006 - 11:38am

Three bucks per subscriber for ESPN, huh? That's interesting.

It makes me wonder how much it would actually cost the cable companies in lost revenue to let my digital cable box be the conduit through which I create my own ala carte channel line-up and pay the cost+15-20% per channel instead of getting the 60 or more of the channels I don't watch crammed down my throat just to get the ones I do watch.

It honestly never occured to be that the content providers charged the cable companies for their channel, I always assumed that without the cable, those channels would be dead, with no one to watch them, or confined to local broadcast syndication.

Its Lawyers. Hooray Lawyers!

6
by B (not verified) :: Tue, 08/08/2006 - 11:38am

For the consumer, the best solution is to allow a la carte programming. I wouldn't mind paying $2 a month for the NFL Network (which gives the cable company more than 100% profit margin) if I didn't have to pay for the Oxygan network or some other channel I never watch.

7
by JeffS (not verified) :: Tue, 08/08/2006 - 11:44am

I'm switching this week from TimeWarner (Brighthouse in Tampa)to DirecTV. The absence of the NFL Network was kind of the last straw. I realize there's challenges to satellite still, but cable hasn't been perfect either. And this way I can get Sunday Ticket. My bar tab to watch Broncos games will go down far more than the cost of the program.

8
by GlennW (not verified) :: Tue, 08/08/2006 - 11:46am

> I’d pay the $5 for my alphabet networks, plus $3 for ESPN and $1 for NFL Network.

I think such pricing assumptions are totally invalid though, which is part of the problem when people price out their cable/satellite costs. Those are the current prices where most/every cable subscriber in the country is signed up by default on the basic tier, i.e. with equally shared cost. PPV cost based on a true subscription rate would be much higher. Hell, based on their ratings, for the NFL Network to recoup equivalent revenue to what they're currently asking for, the PPV price would have to be $10/mo or higher. That's why I think the $0.90/mo for the general subscriber is too high, and that if anyone is guilty of "extortion" here, it's the NFL.

9
by Travis (not verified) :: Tue, 08/08/2006 - 11:50am

I wouldn't count on this fight ending any time soon. Cablevision has to be the most stubborn cable company out there, and while charging ridiculous rates for its own content-free channels (Fox Sports NY, MSG, Metro), usually refuses to put other sports channels on expanded basic without long, drawn-out lawsuits. Both NY baseball teams left Cablevision-owned networks for networks of their own, and neither network appeared on Cablevision systems for some time after launch.

10
by Andrew (not verified) :: Tue, 08/08/2006 - 12:01pm

Gosh Cable companies suck. Thank God for DirectTV.

For those who haven't made the switch yet, I encourage you to do so. Its generally cheaper I've found, you get more channels, and the company isn't a bunch of A-holes. Oh yeah, you don't have the installation fiascos the cable-guys give you.

11
by Marko (not verified) :: Tue, 08/08/2006 - 12:04pm

Matthew, I live in LA too, and I have DirecTV (with the NFL Sunday Ticket package, of course). The Sunday Ticket package was THE reason I got DirecTV, so I could watch my beloved Bears without having to go to a sports bar.

Why don't you ditch cable and get DirecTV with the Sunday Ticket package so you can watch your Redskins? (Maybe you prefer watching the games at a sports bar or go to a friend's place to watch the games.) Leaving out the Sunday Ticket package, which is well worth its price, the cost of DirecTV is comparable to the cost of cable, and it may even be less expensive. If you had DirecTV, you wouldn't have to worry about the fight between Time Warner and NFL Network.

12
by Matthew Furtek (not verified) :: Tue, 08/08/2006 - 12:09pm

I can't go Direct TV because I live in a sucky apartment with no way of getting a dish up. If you don't have a balcony you are out of luck.

We are planning on moving up to Ventura County at some point anyway.

13
by GlennW (not verified) :: Tue, 08/08/2006 - 12:12pm

> For those who haven’t made the switch yet, I encourage you to do so.

I'm actually thinking of going in the other direction after 10+ years with DirecTV (the NFL Season Ticket is really the only thing holding me back, so after this season I'll pull the plug). My cable company's base HD package plus analog basics costs $26.95/mo. That's stripped-down cable but includes all the local networks, ESPN and NESN in HD, so I'm getting pretty much all the sporting events I want to see (in HD), and in my situation with fairly limited requirements, that's really all the TV I watch anyway.

14
by bfos7215 (not verified) :: Tue, 08/08/2006 - 12:16pm

A la carte sounds great, but would likely be the death of many smaller networks and channels who are bouyed by being grouped with more popular channels.

Just because those channels aren't popular doesn't mean they aren't valuable. Think of it as having only your pop top-40 radio station to listen to.

Brian

15
by Tarrant (not verified) :: Tue, 08/08/2006 - 12:22pm

Cable itself probably would be fine with a-la-carte - the groups that really are fighting a-la-carte programming is large media conglomerates that own a dozen or more channels, usually with one or two channels that are considered "must have" by consumers.

Disney, for example, forces any cable company that wants to have ESPN (at its $3/subscriber rate) to also carry things like the ABC Family Channel, Disney Channel, etc. and place them on the same tier as ESPN. Everyone wants to be on the main "basic" tier, to have access to the most subscribers. I understand why, but it also means that what usually happens is that a company owns one very popular channel (ESPN) and uses it to force a dozen channels down the viewer's throats.

That's where the real a-la-carte issue is. Sure, if a cable company said "You can pay $20 for your choice of 10 a-la-carte channels, or $30 for this package of 100 channels" most people would go for the $30 option (it's sort of the American way, just like paying 10 cents more for 16 more ounces of Coke at a movie theater despite not being able to drink it), and some would do the $20 option.

But the people paying the $20 aren't going to be choosing those fringe channels, and those channels are usually only profitable because cable companies are forced to carry them by the large companies that own the channels.

Any governmental regulation (which I'm not sure I'm in favor of) towards a-la-carte not only needs to deal with cable companies themselves and tell them to offer it, but must also make it such that the media conglomerates cannot force a cable company to pay for/offer 12 channels when it really wants to offer one, else the whole thing will simply collapse.

When people think a-la-carte they usually only think of the cable company and not that sometimes, it's the owner of the channel being unreasonable. As a DC resident, I was not upset with Comcast here declining to pay Peter Angelos outrageous fees just to show Washington Nationals games on a channel (MASN) that, literally, for a year and a half, showed nothing else, yet MASN wanted like $2.50 a subscriber for. That's not reasonable or fair for a channel that does nothing but show one team's baseball games.

T.

16
by Nick (not verified) :: Tue, 08/08/2006 - 12:24pm

The problem is that with a la carte programming the cost isn't going to be $2 for NFL network and $6 for ESPN, because the $1 charge is based on every subscriber paying for it. A la carte programming is just as likely to raise your cable bill AND decrease the number of channels you get as anything else.

DirectTV doesn't have the isntallation fiascos you get with cable, which is nice. The entirely different set of installation fiascos isn't as nice though. In my experience DirectTV sucks just as much as cable in the instalation/customer service/billing departmenr

17
by GlennW (not verified) :: Tue, 08/08/2006 - 12:24pm

For a la carte pricing of the NFL Network, I would use the example of a typical regional sports network moving between a la carte and extended basic. In New England, when/where NESN moved from subscription to basic, the subscriber price dropped from $10-12/mo to the hidden $1-2. And that's a network with much higher (local) ratings than the NFL Network will receive. As NFL fans it's definitely in our interests to see the NFL Network on extended basic; that doesn't mean it's fair to the general consumer.

18
by Skin Patrol (not verified) :: Tue, 08/08/2006 - 12:27pm

I think the .90 cents is fair. The NFL network will justify its rate with future ratings increases due to game broadcasts. There's plenty of market for a football only network. The real question is, why do I have to pay extra for a sports package for the NFL Network but Oxygen and the Food Network are included in my basic cable. If I'm going to shoulder the financial burden of having a slew of really unnecessary niche channels, then I have no problem forcing a 1 dollar per month burden on the rest of cable subscribers for a channel documenting and broadcasting the most popular sport in America right now.

19
by GlennW (not verified) :: Tue, 08/08/2006 - 12:33pm

> The real question is, why do I have to pay extra for a sports package for the NFL Network but Oxygen and the Food Network are included in my basic cable.

My guess is that those channels (and many others) are free to you, and operate almost entirely on advertising revenues.

If the NFL Network ever grows to the point where it reaches 100 million households at $0.90/mo, that's over $1 billion/year in subscription fees alone. For eight games! That's some kind of leverage.

20
by Pat (not verified) :: Tue, 08/08/2006 - 12:36pm

A la carte programming is just as likely to raise your cable bill AND decrease the number of channels you get as anything else.

You're presuming that you either have a la carte cable, or package cable, and not both. That's crazy - of course you'd still have package cable, and of course most people would just choose the package deal, because for a lot of people, getting all the channels they want would make the a la carte package more, if the channels were packaged somewhere between the package price (say, ~$1/subscriber) and the true cost/viewer price (probably $10/subscriber).

So in that case you might have the basic cable for, say, $15, and might pay an extra $5/mo for the NFL Network. Expanded basic (which might include the NFL Network, plus a bunch of other channels) would be $25, so most people would just pay the $25. I'd pay the $20 - I don't want the other channels even available.

21
by BB (not verified) :: Tue, 08/08/2006 - 12:36pm

#5: Actually, it's business and the free market. Hooray, free market! As people above have mentioned, big media companies tie their programming together and use their size to force cable companies to take all the channels. Lawyers have nothing to do with this at all, it's simply another manifestation of our economic system.

And count me among the believers that a la carte wouldn't make cable any cheaper unless all you want is maybe a channel or two beyond your network affiliates. My guess is that ESPN would probably be around $10 or maybe more a la carte (somewhat similar to an HBO).

22
by Skin Patrol (not verified) :: Tue, 08/08/2006 - 12:52pm

GlennW-

I guess it becomes a question of whether or not I believe a sports package will cost me 90 cents a month; because that's how much the NFL Network would cost if Time Warner gave in.

I have no problem justifying the additional burden on the rest of cable subscribers who might not watch the NFL network as much as me. They already pay for OLN, ESPN, and ESPN 2 (The Professional Poker/Eating Competition Network).

Is that selfish? Absolutely.

23
by bryan (not verified) :: Tue, 08/08/2006 - 1:00pm

For those that are interested, a DirecTV subscription IS NOT necessary for NFL Sunday Ticket. You will have to acquire and install the equipment yourself, but if whoever you talk to at DirecTV insists that you need a subscription, have them read their legal agreement (see link).

I've done this for years, and it is pretty nice. Regular cable for everything, a dish and one cable for all NFL games.

Here is the relevant section:

Sports, A La Carte and Pay Per View Programming
Blackout restrictions apply to sports programming. To receive sports programming and to order pay per view by remote, a DIRECTV subscription is required (except stand-alone NFL SUNDAY TICKET renewals) and all DIRECTV Receivers must be continuously connected to the same land-based phone line. There is an additional $1.50 charge when pay per view events and movies are ordered by phone utilizing the automated ordering system or an additional $5.00 charge for an operator-assisted order. Pay per view event purchase price is non-refundable. Most sports subscriptions automatically continue each year at a special renewal rate, provided DIRECTV carries these services, unless subscriber calls to cancel prior to the start of the season. Commercial locations require an appropriate license agreement. Commercial signal theft is subject to civil and criminal penalties.

24
by GlennW (not verified) :: Tue, 08/08/2006 - 1:05pm

Um, Bryan, that's the best piece of news or information I've received all year (well, almost). Thanks! I now feel fairly stupid...

25
by Pat (not verified) :: Tue, 08/08/2006 - 1:16pm

I don't think you can still do the NFL Sunday Ticket stand-alone unless you did it back when they offered it. (Note the "NFL Sunday Ticket stand alone renewal"). They offered it stand alone a while ago, but no longer offer that.

26
by Marko (not verified) :: Tue, 08/08/2006 - 1:16pm

"I can’t go Direct TV because I live in a sucky apartment with no way of getting a dish up. If you don’t have a balcony you are out of luck."

Actually, that's not necessarily true. I live in a condo, and I and another huge sports fan who lives in the complex convinced our condo association to have a DirecTV dish put on the roof of our buiding. Everyone in our complex can subscribe to DirecTV, if they so choose, using that single dish on the roof. The cable from the dish is ultimately connected in the homeowner's unit through the preexisting wall jack that was used for cable TV.

As long as you have the proper line of sight required for DirecTV, any multi-unit dwelling can do the same. Of course, in an apartment, you'll have to get your landlord to install the dish. This may be a moot point for Matthew, who is planning to move, but others might be interested in knowing about this option.

27
by Zac (not verified) :: Tue, 08/08/2006 - 1:18pm

bryan, if I'm reading that right, they're saying only people who already have only NFL Sunday ticket will be allowed to continue to do it (hence why they limit it to renewals).

Sort of a grandfather clause, if you will.

28
by C (not verified) :: Tue, 08/08/2006 - 1:24pm

Smells like capitalism to me.

29
by Tarrant (not verified) :: Tue, 08/08/2006 - 1:31pm

What I would figure if one had a-la-carte is that you'd still have the large packages, but then you could create your own bundle or something.

The company will offer two things:

"$20 for 5-8 channels of your choice"

and

"$40 for the full 100 basic tier channels"

Most people will end up going for the $40 for 100 channels, 90 of which they might never watch.

In fact, what I bet would happen in such a situation is that the a-la-carte package would allow you to choose the number of channels that is exactly one less than the number of channels considered "must have" by the average cable subscriber, thereby making the full package almost necessary.

It's also true that while the cable company has to pay for the channels, and they always complain about paying, they're like any other company - complain about the costs but never about what they gain.

For many (most, really) of these channels, the cable company is given some advertising time to sell for themselves (people with cable have likely seen commercials for commercial time that are placed there by their own cable company - I see commercials for "Advertise using Comcast! Lots of channels, including ESPN, TLC, etc. to choose from, and your ad can run on multiple channels to target who you want!" ) - and they get the revenue for selling that ad time.

So while the cost per subscriber is high, the channels with higher costs per subscriber from the channel are also often channels for which the cable company itself can sell the advertising space for the most money. I'm not saying there's a 1-to-1 offset, but it's not like $3 of your cable bill monthly is directly going to ESPN.

T.

30
by GlennW (not verified) :: Tue, 08/08/2006 - 1:32pm

> Is that selfish? Absolutely.

So am I, and I'd gladly agree to pay the $0.90/mo based on my own self-interests. However, in the interests of fairness, I cringe when some NFL Network PR flunky makes statements like the following one to justify the general public subsidizing their operation to the tune of hundreds of millions a year. Seriously, my immediate reaction to this story is to question why the NFL needs to charge extra for this "network" at all, given its supposed widespread popularity.

Palansky: "No other cable system in the country carries us on a sports tier. We won’t allow that to happen. We see that as a way of trying to extort NFL fans because they’re passionate."

31
by Pat (not verified) :: Tue, 08/08/2006 - 1:43pm

What I would figure if one had a-la-carte is that you’d still have the large packages, but then you could create your own bundle or something.

Absolutely. I'd kill for a setup like that. 5 channels? Man. I'd do fine with 2 - ESPN and TLC and my wife and I would both be happy.

32
by Matthew Furtek (not verified) :: Tue, 08/08/2006 - 1:44pm

One more point about the NFL Network.

They will be rebroadcasting some of the Sunday games during the week.

Since I get the Sports Tier anyway, I don't care how TWC decides to carry NFL Network, as long as they friggin carry it.

33
by Nick (not verified) :: Tue, 08/08/2006 - 1:44pm

You’re presuming that you either have a la carte cable, or package cable, and not both. That’s crazy - of course you’d still have package cable, and of course most people would just choose the package deal, because for a lot of people, getting all the channels they want would make the a la carte package more, if the channels were packaged somewhere between the package price (say, ~$1/subscriber) and the true cost/viewer price (probably $10/subscriber).

I'm not presuming that at all. I am presuming that any a la carte system will add some small but non-trivial costs to the cable companies infrastructure and that the price will not remain the same for any package deal (since the demand structure has changed).

So, everything in you example may be true, but it also may be true that you were paying $20 a month for the package that now costs $25. And in that (hypothetical) example, you've educed the number of channels you receive without actually reducing the price of your service. It doesn't impact you much (you don't gain anything but you don't lose anything either), since you don't watch those chanels much, but it does impact the majority of the customers who either lose services or pay more.

Of course, both of our examples are hypothetical. Do you know of any studies (or locations that have switched to this kind of pricing structure) that estimate the change in costs and demand that would occur if the change were made?

34
by Crushinator (not verified) :: Tue, 08/08/2006 - 1:53pm

Don't know if its been said or not -

but is that $3 for ESPN include ESPN2, ESPN Classic, and all the other ESPN spinoffs? Or is that JUST for ESPN1?

35
by Tarrant (not verified) :: Tue, 08/08/2006 - 1:56pm

The majority of studies that I've seen about a-la-carte pricing have been of the type like "The average cable user only watches 8 of their 100 channels the majority of the time, and if they could do a-la-carte of those 8, they'd save money." But what I haven't seen is something that addresses the case where there are still channel packages available in addition to a-la-carte, and whether those packages would cost more, and whether the a-la-carte thing would allow people to buy all 8 of those channels.

If I was being forced to start a-la-carte and all research showed that people watch about 8 channels, and I was devious, I could do well by setting my a-la-carte pricing to be for a package of 6 channels, meaning most viewers would go for the packages they always had anyway.

As for cable in general, of course if a-la-carte was available, cable companies would raise rates, and blame a-la-carte, even if the actual costs were minor. Much like when cell companies had to be able to transfer numbers, many added $1-2 monthly charges for "number portability" for 'infrastructure upgrades'. Studies have shown those upgrades are long paid for and the actual transfer of a number is inexpensive for the companies these days, but most still charge that $1-2 a month and blame the government if someone calls in. It's an easy way to pocket extra money (this is not limited to companies - we're still paying a phone tax that was created by Congress to pay for the Spanish-American War, and that was supposed to end the moment those debts were paid - yet we pay it still today).

36
by MadPenguin (not verified) :: Tue, 08/08/2006 - 1:58pm

I had a whole big thing originally typed on alacarte but it occurred to me it wouldn't do much good. :-) So my thoughts are, I want to get the nfl package on regular cable. Thats all there is to it. Make the nfl network part of that package. As Tuesday Morning QB puts it, not all of the people in the counry can put up a dish. It also can kill you price wise if you're on a budget and have broadband + cable for the 20$ savings a month.

Oh, and I use time warner... why aren't there competing cable companies anyway?

37
by bryan (not verified) :: Tue, 08/08/2006 - 1:58pm

27: You are correct, they must have changed that - it used to say "except for NFL Sunday Ticket". Sorry, I didn't even notice that.

38
by Tarrant (not verified) :: Tue, 08/08/2006 - 1:59pm

Crush:

That is just for ESPN. Disney, however, generally requires that any cable operator that takes ESPN also pay for ESPN2 ($1/subscriber if I recall) and ESPNNews. That requirement is actually why almost no one a few years ago got the ESPNNews channel, and now almost everyone does. Disney said "If you want ESPN, you will buy this channel too."

39
by imsmith (not verified) :: Tue, 08/08/2006 - 2:20pm

For those of you interested in the whole ala carte issue, in general, I suggest breezing through the book, The Long Tail.

It's not perfect, but it makes some intriguing points about the distinction between the true market demand and the filtered demand in a market that is artificially constrained by distribution mechanisms that favor industrial, one-to-many schemes.

40
by Pat (not verified) :: Tue, 08/08/2006 - 2:24pm

I’m not presuming that at all. I am presuming that any a la carte system will add some small but non-trivial costs to the cable companies infrastructure

Which they would pass along only to the a la carte consumers, most likely. Otherwise they'll lose customers to other cable providers who don't implement a la carte.

and that the price will not remain the same for any package deal (since the demand structure has changed).

I doubt the demand structure would change much at all. You're just trying to get the people who don't have cable to get cable, or get people to spend more on cable.

You probably would just would need to tweak the pricing on it. I think it's pretty unlikely that many people would drop downward.

Most research shows that people just watch 10-14 channels, right? What cable a la carte is doing is not helping the mean - you want to price it to encourage those to the left (fewer channels) to spend more. So you'd make it so that getting, say, 5 channels is the equivalent of the package deal. The demand structure would be essentially untouched, because likely the vast majority of the people who only watch 5 or less channels don't have the package deal anyway.

You could definitely do it so that it's economic. But the people who don't watch much TV aren't exactly common in the US right now.

41
by Fnor (not verified) :: Tue, 08/08/2006 - 2:49pm

#12: Actually, so long as you are renting an apartment that contains a direct access to an exterior wall, any clauses in your rental agreement that bar the attachment of satellite dishes is unenforceable. If you care.

Anyway, where do I stand? I stand with "I don't care." I don't have cable. I've never actually seen the NFL network. I find it amusing that the two behemoths are arguing over whose fault it is that the thing would be expensive when I find the option either way (and its DirecTV equivalent) prohibitavely expensive. I am not going to pay out the nose for Over-Repeated-Meme-center, a few games, networks devoted to whatever Oprah and James Dobson said the past day, and excellent historical documentaries (which I don't have time to watch). I'll take network tv; my 3 games on sunday, Law & Order, and Doctor Who my friends recorded for me.

42
by Nick (not verified) :: Tue, 08/08/2006 - 2:53pm

If the demand structure isn't going to change, doesn't that imply that there isn't much demand for a la carte pricing? If it doesn't change the demand structure any, there isn't much incentive for a cable company to offer it. If the costs all get passed on to the minority of the customers, then they will end up paying almost as much for their 2 or 3 chanels as everyone else pays of 100.

If most people aren't going to drop downward, then why would a cable company even want to offer a la carte pricing, since most people apparently don't even want it? I think it has to change the demand structure for it to even make sense to a large cable company, otherwise it's just targeting a group of people that don't watch TV very much, which probably isn't a winning business strategy.

43
by Fnor (not verified) :: Tue, 08/08/2006 - 2:54pm

#39:

Actually, The Long Tail has been shown to have some major problems. Linked article is a good summary, complete with some rather good, cynical editorial about the motives and marketing behind the book.

44
by Sean D. (not verified) :: Tue, 08/08/2006 - 2:59pm

I'm from San Diego and a Padres fan so TWC has us by the short and curlies. The Padres you see are only shown on Cable, because they are shown on a channel owned by a cable company (Cox). I would love NFL Network, but TWC obviously doesn't carry it with their 2nd tier service and does not carry it with their sports tier. I love the Chargers and I love football, but I can still see all the Chargers games (when they aren't blakced out) and the Padres games, and I'd rather have that than a few extra games on NFL Network and no Padres games.

45
by Tarrant (not verified) :: Tue, 08/08/2006 - 3:10pm

Re: #39

I believe the law that no longer allows landlords/apartments to forbid satellite dishes (as long as the resident has access to an outside wall) also forbid homeowner's associations from preventing the small DirecTV-style dishes, for those in those situations.

Such clauses were made unenforceable by federal law, although I would guess (especially in the case of some of the more draconian homeowner's assocations or landlords) they might deny that it applies to them.

46
by Richie (not verified) :: Tue, 08/08/2006 - 3:17pm

I haven't read the comments yet, so you've probably covered this. But the NFL said:

"We see that as a way of trying to extort NFL fans because they’re passionate."

If the NFL is actually charging more than average for their network, then isn't that exactly what the NFL is doing? Instead, they are extorting the cable providers by charging extra, knowing that the passionate fans will complain to their cable providers. In turn, the cable providers will raise the rates on the customers.

47
by Marko (not verified) :: Tue, 08/08/2006 - 3:33pm

Click on the link under my name for a July 2005 FCC Information Sheet regarding the FCC rule that, among other things, prohibits certain restrictions by homeowners' assocations, landlords, etc. on the installation or use of certain satellite dishes, including DirecTV dishes.

48
by GlennW (not verified) :: Tue, 08/08/2006 - 3:36pm

Re "NFL extortion"-- this was almost exactly my point in .30. In spite of whatever complaints might exist now from these "passionate fans", you can be sure that when a cable company sends a letter to all of its customers that reads, "Dear Valued Customer, due to the addition of the NFL Network to your basic service, we are (again) raising your rate $1/month, effective immediately" there'd be general hell to pay.

49
by Richie (not verified) :: Tue, 08/08/2006 - 3:39pm

I think Cable A La Carte needs to happen Sooner rather than later… especially looking at the rates. I’d pay the $5 for my alphabet networks, plus $3 for ESPN and $1 for NFL Network. That leaves about $40 for everything else… probably $3 for TNT/USA/TBS and then $4 for HGTV-type fare, and maybe $4 for History/Discovery and $4 for Korean language channels. Those are conservative estimates… although I can see how if I got a bunch it would add up.

I agree. The first thing I would do is wipe out the 20 channels of foreign-language programming I currently get (on the prime channels of 15 through 36). The best part is the TV in my work room only goes up to about channel 69, so I am having about 10 channels cut off so that my f'n cable company can broadcast all the foreign language crap on the prime channels.

50
by jcn56 (not verified) :: Tue, 08/08/2006 - 3:51pm

You guys, as always, ROCK. I found this tidbit on AVSForum.com, the great home theater/HDTV website:

Email Fred Dressler at TWC, the Executive Vice President of Programming if you want more HD Channels!!!
fred.dressler@twcable.com

I'm going to e-mail Fred and let him know how much I love paying for the MSN Shopping Network, but that they have the gall to ask for extra money to bring me the NFL Network because it's supposedly not of interest to many of their subscribers.

51
by Travis (not verified) :: Tue, 08/08/2006 - 3:51pm

Re: 47, others

Yes, apartment owners are allowed to install satellite dishes, but if their apartments don't have southwesterly views, they won't be able to pick up the DirecTV signal.

52
by Richie (not verified) :: Tue, 08/08/2006 - 3:53pm

We are planning on moving up to Ventura County at some point anyway.

Wow you must be rich. (That's where I live - but I'm not rich.)

53
by Richie (not verified) :: Tue, 08/08/2006 - 3:55pm

A la carte sounds great, but would likely be the death of many smaller networks and channels who are bouyed by being grouped with more popular channels.

Maybe the small channels could, at least in their beginning, be added to cable systems for free. Once they gain popularity, they can start charging.

54
by Pat (not verified) :: Tue, 08/08/2006 - 4:06pm

Click on the link under my name for a July 2005 FCC Information Sheet regarding the FCC rule that, among other things, prohibits certain restrictions by homeowners’ assocations, landlords, etc. on the installation or use of certain satellite dishes, including DirecTV dishes.

Careful. In actuality, that only prevents prohibition in areas where the tenant has exclusive access. Landlords can prevent you from installing one on a wall, for instance, but not from having one set up on a porch (which you have exclusive access to).

Ditto for associations - if you're in a condo, you have to ask for permission to install a dish onto the outside wall (because you don't exclusively own it). They can say no, but few do.

In general, though, if you just point out that rule to a landlord, they'll let you do it. Few people actually read through the particulars.

55
by Pat (not verified) :: Tue, 08/08/2006 - 4:18pm

If the demand structure isn’t going to change, doesn’t that imply that there isn’t much demand for a la carte pricing?

You're implying that everyone has the largest package already. There will be demand for a la carte pricing for those customers who want channels they don't have. The demand for the packages won't change if you price things accordingly.

This is why you price it high - you're not trying to get people to save money. You're trying to get people who aren't spending money to spend more.

If you've got people with basic, for instance, some fraction of them would want more channels. They do not, however, want them enough to buy the next package. Right now, they don't do anything. They're happy where they are. But if a la carte pricing came as an option, and was priced intelligently, they would spend more.

Basically, what you're saying is "cable companies, you suck. The price gap between basic and expanded and between expanded and digital is way too large. Add more flexible pricing tiers."

And at least in my opinion, that's true. Where I previously lived, basic was $12/month, expanded basic was $28/month, digital basic was $50/month, and digital expanded was $70/month. (And most people here would probably think that's ridiculously cheap - it was. I loved that company.) It's just too big a jump between each of the tiers.

Now, partly what I'm saying here is that I don't think cable companies do sufficient market research. Some people might disagree, but I definitely think they don't.

56
by Vince (not verified) :: Tue, 08/08/2006 - 4:21pm

You know, within 10 years I suspect a lot of television will, in a way, be a la carte anyway. I think most shows and/or networks will charge a small per-episode fee, and you'll be able to watch them online.

57
by Richie (not verified) :: Tue, 08/08/2006 - 4:31pm

But what I haven’t seen is something that addresses the case where there are still channel packages available in addition to a-la-carte, and whether those packages would cost more, and whether the a-la-carte thing would allow people to buy all 8 of those channels.

I think some sort of package/a-la-carte hybrid would be nice. There would be packages for $5 or $10 each:

Sports (ESPN, FOX, NFL, etc.)
Music (MTV, VH1, MTV2, etc.)
Entertainment (E!, Comedy Central, Disney, etc.)
Foreign Language
Info (History, Discover, TLC, etc.)

When you sign up you get either all or none of each group.

58
by Tarrant (not verified) :: Tue, 08/08/2006 - 5:01pm

Where I lived back in Los Angeles, you had your choice of packages where it was essentially $40 for 100 channels or so, $45 for 120 channels (which included a lot of extra "2's" - MTV2, FSN2, etc.), but $90 if you wanted 200 channels. Of those extra 80 channels, most were absolute dreck, but some were actually useful and interesting. But not enough that I'd pay $45 more.

Paying $10 more to get 10 of those channels might have been worthwhile.

But in reality, that's now what most people mean by a-la-carte.

What most people mean is that they can get cable, and just get the alphabets and maybe 10 other channels, and not pay the $40 for the first 100 channels. The thing is, in my best guess, something like that in itself (alphabets, the free channels, +10 of your choice) would be $30-35 anyway, so the savings really wouldn't be there.

T.

59
by Nick (not verified) :: Tue, 08/08/2006 - 5:03pm

Now, partly what I’m saying here is that I don’t think cable companies do sufficient market research. Some people might disagree, but I definitely think they don’t.

That's basically what I'm disagreeing with. I highly doubt cable companies are avoiding a la carte plans at a detriment to themselves. Why would they choose to make less money? Presumably they know how much it would cost to adapt this system, and they have an idea (at least a better one than we do) of what the price points would be. Maybe they are all just doing terrible market research, and the fact there isn't a ton of competition makes this possible, but I don't really believe it.

I think some sort of package/a-la-carte hybrid would be nice. There would be packages for $5 or $10 each:

How many people currently spend $30 per month just to get one of those chanel groupings? That's the big issue. If most of the people are willing to spend $30-$50 just to get those packages now, why would the cable company simply decide to charge them less? Obviously this would be nice for those of us that only want 2 of these groups, but if we are willing to pay a larger amount that's what we'll end up paying.

60
by Skin Patrol (not verified) :: Tue, 08/08/2006 - 5:06pm

Re: 48

"In spite of whatever complaints might exist now from these “passionate fans�, you can be sure that when a cable company sends a letter to all of its customers that reads, “Dear Valued Customer, due to the addition of the NFL Network to your basic service, we are (again) raising your rate $1/month, effective immediately� there’d be general hell to pay."

I wouldn't be the least bit outraged. However I can at least imagine the type of customer who would be outraged over that letter. But that kind of customer would also likely be outraged if the phone company said "We've raised your cable by $3 for ESPN".

At this point it's a dispute between two entities haggling over what constitutes a fair price. I think the NFL Network, at 1 dollar, is a bargain compared to ESPN at 3, since I personally watch ESPN for the NFL coverage (and to a lesser extent its College Football/Basketball coverage).

Whomever the nuance ultimately favors, the psychology of it looks devastating for Time Warner because no one is going to blame the NFL Network; you write checks to the cable company. And they are also the ones with the bad service who frustratingly give you a 36 hour window on installation "We will be at your house sometime between July and August from 9 AM to 7 PM". People hate cable companies and many folks love football. The NFL Network will earn their 90 cents.

61
by Skin Patrol (not verified) :: Tue, 08/08/2006 - 5:07pm

Re: 48 and "if the cable company sent out a letter saying serviec was 1 dollar more because of NFL Network"

I wouldn't be the least bit outraged. However I can at least imagine the type of customer who would be outraged over that letter. But that kind of customer would also likely be outraged if the phone company said "We've raised your cable by $3 for ESPN".

At this point it's a dispute between two entities haggling over what constitutes a fair price. I think the NFL Network, at 1 dollar, is a bargain compared to ESPN at 3, since I personally watch ESPN for the NFL coverage (and to a lesser extent its College Football/Basketball coverage).

Whomever the nuance ultimately favors, the psychology of it looks devastating for Time Warner because no one is going to blame the NFL Network; you write checks to the cable company. And they are also the ones with the bad service who frustratingly give you a 36 hour window on installation "We will be at your house sometime between July and August from 9 AM to 7 PM". People hate cable companies and many folks love football. The NFL Network will earn their 90 cents.

62
by Skin Patrol (not verified) :: Tue, 08/08/2006 - 5:08pm

Sorry for the duplicate post, guys.

63
by Loki9179 (not verified) :: Tue, 08/08/2006 - 5:20pm

I think that both the cable companies and the content providers are vehemently against a la carte type programming. Cable companies are against it because it leads to uncertain revenues, and is relatively complicated to set up. Content providers are against it because consumers might not regularly use it. For example, a consumer might subscribe to the NFL Network for the months of November and December (when the games are on) and then cancel after that. If it is part of the basic tier you can't do that and they get their $1 a month all year long. The difference for the content provider is considerable. So, I would not put too much hope in anyone offering a la carte programming.

64
by Matthew Furtek (not verified) :: Tue, 08/08/2006 - 5:35pm

Richie,
It's not like LA County is all that cheaper. Maybe direct housing costs are, but the cost of car insurance and gas is killing me... and probably make it about an even trade. I also loathe the LA government... no clue why San Fernando Valley isn't split out as it's own county.

The problem I have is that I absolutely love Road Runner high speed offered by TWC. They recently bought out Adelphia in Ventura County... so maybe they will get Road Runner.

65
by GlennW (not verified) :: Tue, 08/08/2006 - 5:41pm

> At this point it’s a dispute between two entities haggling over what constitutes a fair price. I think the NFL Network, at 1 dollar, is a bargain compared to ESPN at 3, since I personally watch ESPN for the NFL coverage (and to a lesser extent its College Football/Basketball coverage).

Again, you're an NFL fan first and foremost, so that's understandable. I'm basing my judgments more on the hard numbers. It is going to be a long, long, long time (and likely never) that a niche channel like the NFL Network generates even one-third of ESPN's average ratings over the course of the year. In fact, based on the national ratings, that ~$1/mo may very well represent the most expensive non-premium-tier programming in the history of cable television. Which begs the question: if the NFL Network's regular programming (i.e. all but 8 lousy games, approx. 24 hours of regular-season action) is so important to the passionate few, why shouldn't a cable company be allowed to place it on a premium tier and price it accordingly, so the rest of the country doesn't have to pay for it? We've heard people in here say that they'd pay for it as part of a sports-only tier, but it is the NFL and not these cable companies that is against that policy-- the NFL wants the volume and is taking the hard line here.

66
by Pat (not verified) :: Tue, 08/08/2006 - 6:06pm

Why would they choose to make less money? Well, there's up-front costs to consider. A lot of companies aren't willing to make a large investment (with a decent amount of risk) even if there is a good potential for profit.

Heck, Time Warner gave me free cable for a year when I moved in simply because they figured that most people want cable, and so it took a year for them to figure it was worth disconnecting the cable. Think about that for a second - they've got such a monopoly on customers that they can afford to give the small fraction of people who don't want cable free cable for a year.

Maybe they are all just doing terrible market research, and the fact there isn’t a ton of competition makes this possible, but I don’t really believe it.

I doubt they are. At least, from what I've seen, the larger cable companies (Adelphia when they existed, Time Warner, etc.) have horrible pricing structures. The two places I've lived in have been lucky enough to have a small-market cable company (D&E in State College, and WOW in Columbus) and the pricing structures that they both had were terrific. Plus I actually got calls from D&E two or three times to ask my opinion on the addition of channels. I've never heard of that from the larger market customers.

67
by Skin Patrol (not verified) :: Tue, 08/08/2006 - 6:21pm

Re: 65

Some compromise. I understand your point about it not being fair to the rest of consumers. Again, I'll remain selfish about it and demand the NFL Network.

What I absolutely do *not* want is for the NFL Network to be available only on a sports tier. I absolutely think the NFL Network generates enough interest to earn its spot on basic service along with the Food Network, Oxygen, and ABC Family Channel.

Now we are at the give/take of negotiations. NFL Network thinks it can get 90 cents, Time Warner is unwilling to pay that. I happen to side with the NFL Network because I find 90 cents a bargain, you side with Time Warner because you believe that the fairest deal is one where people who want the channel pay for it.

Maybe the NFL Network is asking for too much. Fine. Eventually the NFL Network will want to compromise because access to basic service is huge for advertising revenues. Maybe that number bumps down to 60 cents, or 50 cents in near future. But I maintain that IF ESPN charges 3 dollars per subscriber than there must be a reasonable number at which NFL Network can similarly charge to be on basic service. Is this "reasonable number" 90 cents? I don't know. Are you willing to offer an amount that would pacify you without requiring sports tier programming?

Hasn't the NFL, as the most popular sport in America, earned a channel devoted solely to it on basic service?

68
by GlennW (not verified) :: Tue, 08/08/2006 - 8:01pm

> Hasn’t the NFL, as the most popular sport in America, earned a channel devoted solely to it on basic service?

"The most popular sport in America" which will broadcast 8 actual meaningful games on its network. Okay, you asked for a price, which is indeed the crux of the matter. If the NFL Network was charging $0.30/mo before adding these 8 games, then keep charging the $0.30-- if you're that popular you're making good money on the advertising solely for these games, same as the free networks do for their NFL games. The increase sounds like naked greed to me, in leveraging these few games. If 50 million subscribers are paying an additional $7.20/year ($0.60/mo) just to add these 8 games and 5 million non-local households watch each one, that's $72 per viewing household for the 8-game package or almost $10/game-- way too much (yeah, I know there are other costs which will reduce the NFL's profit, but you've got a ballpark figure). Sure, the NFL is going to claim "value-added" with all the other wonderful new programming they have on the network, but until they added these games there was no widespread demand for that stuff.
To me it sounds like an approximate half-billion dollar rights fee for eight lousy games.

69
by Boston Dan (not verified) :: Tue, 08/08/2006 - 8:29pm

re: #14

You don't mind subsidizing the shopping networks with your cable subscription? Think about it for a moment.

70
by Skin Patrol (not verified) :: Tue, 08/08/2006 - 9:19pm

I think the broadcast of games gives them bargaining power because it will draw viewers. I am compelled by the NFL Network's argument that adding games to its programming instantly makes them a more watchable network and, thus, they deserve more per subscriber.

The question I unsuccessfully tried to get from you is why ESPN is 3 dollars valuable and the NFL Network is only 1 dollar valuable (or 30 cents valuable). Presumably ESPN can just as easily benefit from advertising as the NFL network because they're "that popular". But at the end of the day a bunch of people not-interested in competetive eating are paying for that broadcast on ESPN to the tune of 3 dollars. If you think the NFL Network's proposal is pure greed, than as a matter of consistency so too would ESPN's request.

Now, 90 cents might ultimately be too much to ask for. So is the number 60 cents? Is it 30 cents (are you comfortable with that?). Is zero the right number?

I'm comfortable with 90 cents because I have that figure in perspective; do I personally feel that the NFL network is 1/3rd as valuable as ESPN? Yes, I do. That's greedy of me.

I think we might have to agree to disagree. You're operating under a "fairness" assumption, and I'm viewing a negotiation between two parties as a consumer and I've made up my mind. The NFL Network has set their price as a one dollar increase on my basic service for their network. I have weighed their proposition and reasonably concluded that I've got one dollar ready for that service the instant the cable companies roll over. Since I find the cost perfectly agreeable, the party I'm going to hold accountable is Time Warner because they haven't accepted what, to me, is a perfectly reasonable proposal (in my opinion).

71
by Fnor (not verified) :: Tue, 08/08/2006 - 9:39pm

#54:

Technically, you have a constitutional right to put one up so long as it does not seriously injure someone else's property interest, regardless of the FCC's regulations. Most people, however, both do not know this nor want to actually take their landlord on.

72
by BillWallace (not verified) :: Tue, 08/08/2006 - 9:42pm

1. One problem with DirecTV and other sattelite, their HD is somewhat neutered, so you don't want to go there if you have a really nice HD tv.

2. "We see that as a way of trying to extort NFL fans because they’re passionate"

This is wrong in so many ways. What exactly does a $75 jersey constitute? Exploiting consumer passion is practically the essence of capitalism, not to mention the lifeblood of the NFL. I'm rooting for the cable company now, just because of that.

3. I'm surprised that the per use charges of those channels. At $3 for ESPN1, I would think it would be about $10 ala carte. But that's absurd... HBO is not much more with a smaller market and NO ADS. If Tivo and friends are killing ad revenue that much than they just need to admit the loss and accept the new business model.

73
by imsmith (not verified) :: Tue, 08/08/2006 - 9:44pm

#49:

Obviously, it's not perfect. I only picked it up after reading the WSJ article.

The point that he does make pretty well is that the market is filtered when the distribution mechanism is used to maintain an artificial scarcity.

For all its faults, The Long Tail does a good job describing the differences between one-to-many and many-to-many content distribution markets.

In the case of digital cable, ala carte is feasable but incompatible with the conventional views on how to make money delivering content, and how much there is to be made. It isn't a coincidence that the cable industry is holding ala carte programming hostage in their fight against net neutrality - without a franchise board guaranteeing their monopolies, they stand to lose big without a way to recoupe their losses by charging premium rates for other companies content being delivered on their wire into hundreds of millions of households.

The point that The Long Tail makes is that the profits that cable companies are currently enjoying might be artificial, and that artificiality permits the content producers, like ESPN or the NFL to charge so much, because they see the market creating so much profit for the content distributors (and they want their cut).

74
by BillWallace (not verified) :: Tue, 08/08/2006 - 9:45pm

#71
Didn't anyone tell you that the consitution doesn't matter anymore? Majority rules.

75
by pittsburghpat (not verified) :: Tue, 08/08/2006 - 11:20pm

Hey Everyone -

Off topic, but on the topic of networks. Anyone know how to watch the NFL in the UK? I saw that sky has 2 games a week, another channel plays monday night games. Do any bars / pubs stay open for the late night games? Is there one everyone goes to, specifically for steeler games?

I'm moving there in 3 days and the idea of going a full season without seeing the steelers (or any other football) is not cool.

Thanks

Pat

76
by Rick (not verified) :: Tue, 08/08/2006 - 11:27pm

Ala Carte pricing will cost much, much more than the current system. While some people think the fees for NFL network are high, or ESPN is too high, fact is they are VERY LOW because in the current situation they come packaged with other networks. If they were stand alone in ala carte, they'd be way too expensive.

Everyone loses with ala carte, except those of us who don't watch TV to begin with.

77
by Pat (not verified) :: Wed, 08/09/2006 - 1:02am

Ala Carte pricing will cost much, much more than the current system.

Which is why people aren't suggesting it would replace the current system, but be an alternative to it.

Those who are happy with loads of channels are perfectly welcome to keep it. Some of us would like to pick up ESPN, and only ESPN, for instance.

78
by Pat (not verified) :: Wed, 08/09/2006 - 1:05am

Technically, you have a constitutional right to put one up so long as it does not seriously injure someone else’s property interest, regardless of the FCC’s regulations.

Only if it's actually your property (or an area you have exclusive access to), which is the whole point of those notes in the FCC's regulation. Putting a dish up on the exterior wall of an apartment building without approval is essentially vandalism, because the outside wall is common area, and therefore the landlord's property.

79
by James, London (not verified) :: Wed, 08/09/2006 - 7:24am

In response to #75

Welcome to the UK. First the bad news: you're going to be disappointed with the amount of football you can actually watch in the UK. No 'Sunday Ticket option here I'm afraid. And to see a decent amount of footbal, you will need a SKY TV subscription.

Now the good news. The coverage is better than you might think.

SKY Sports show a double header every Sunday. We see one 1:00pm game and oner 4pm game every week. While SKY try to show every team at leat once, they concentrate on the better/higher profile teams, so with the Steelers being defending champs, we'll probably see them 3 or 4 times this year in the regular season. Also SKY don't pick the schedule of games at the begining of the year and stick with it, so we don't get meaningless games between 4-10 teams in week 15.

SKY also shows the Thanksgiving games live, they normally broadcast the season opener on Thursday.

SKY also show every play-off game live and of course the SB. We also get the CBS/FOX feed ans commentary, so you don't have to worry about no nothing UK commentators calling the game.

You can get SKY Sports on Cable on via satellite. My subscription is satellite and it costs me £40 (around $70) per month. Whatever you do ensure you package has SKY SPORTS EXTRA, as this is the channel that carries the NFL. Without EXTRA, you'll see no football.

Terrestrial TV has SNF and MNF. Channel 5 had them last year, and I think again this year. Be warned however, SNF & MNF broadcast between 1:00am and 5:00am UK time, depending on whether the game is East Coast or West Coast. If you have a job working normal hours, you'll struggle to see them.

If you want to see any college 'ball you need a further subscription, to NASN. I don't subsribe to this, but their website says that this year they well show 2-3 live NCAA games per week. The also show NFL Total Access among other things, and are "currently in negotiations" regarding their NFL coverage this year. NASN can be found at:
http://www.nasn.co.uk/

SKY SPORTS are at:
http://home.skysports.com/

In total, between SKY and the terrestrial channels, we see 4 live games per week. SKY also have a 1hr highlights show. NASN might offer more. Like I say, I don't subscribe, so I don't know.

As for particular bars to follow the Steelers, I don't know. Best thing to do is contact the Steelers, tell them where you are going to be living in the UK, and ask them if they know of any 'fan club' branches in that part of the UK. If they can't help perhaps the US emabassy in London can.

Hope this helps.

80
by James, London (not verified) :: Wed, 08/09/2006 - 7:28am

To clarify, my £40 per month subscription is a bundled one, so I get about 400 chanels, (movies, Discovery bundle, etc, etc). It's not £40 per month for SKY SPORTS alone. However, you can't just take the sports channels and pay a lower fee. Ther's no a la carte service in the UK either.

81
by pittsburghpat (not verified) :: Wed, 08/09/2006 - 7:58am

Thanks James - great information. Those Monday Night games are going to be a bit tough. Maybe I'll try just waking up for the last quarter.

82
by Fnor (not verified) :: Wed, 08/09/2006 - 8:23am

#78:

Being a common area has nothing to do with the property. In an apartment, it's all the landlord's property, you merely have a possessory interest in it. In a condo, the board owns the exterior by contract. I can grab some case law if you want, but the court found that the educational benefit in satellite TV outweighed cosmetic concerns on the owner's part, allowing for an easement so long as it does not injure the property, and the resident's apartment has direct access to the exterior wall.

83
by GlennW (not verified) :: Wed, 08/09/2006 - 11:17am

> The question I unsuccessfully tried to get from you is why ESPN is 3 dollars valuable and the NFL Network is only 1 dollar valuable (or 30 cents valuable).

I already answered that question-- ratings. I don't necessarily agree with the $3 figure for ESPN, but I'd guess that the ESPN channels currently boast 50 times the viewer-hours that the NFL Network does (and 8 NFL games and expanded availability isn't going to change that number appreciably). I have as many problems with ESPN's production qualities as everyone else, but they've got thousands of live sporting events per year (including 16 NFL games, double the NFL Network), and even non-NFL programming that I care about (college football, NCAA hoops tournament etc). In America if you're a sports fan of any ilk, you're watching some ESPN. It's not even a close comparison.

Of course you'll gladly pay the $1, and so will I-- we've established that. But you've expressed resistance to paying more, on a sports tier or otherwise, which only reinforces my point. You want a discount in the form of a subsidy from non-viewers. And that's fine, you've been honest about that, but it's not a convincing argument to non-fans. And frankly, in principle I'm not crazy about the NFL just saying, hey, we're #1, we'll call the shots here, write us a big check in addition to carrying our station, or else...

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by GlennW (not verified) :: Wed, 08/09/2006 - 11:30am

> Exploiting consumer passion is practically the essence of capitalism, not to mention the lifeblood of the NFL. I’m rooting for the cable company now, just because of that.

Bingo-- the same "exploitation" line stood out for me. Negotiate for what you can get like any good business, but spare us the indignity for those who would dare stand in the way of the mighty NFL. But, you know, as some in here have been saying, cable companies are so unpopular in general that this kind of talk will fly with many...

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by JohnP (not verified) :: Wed, 08/09/2006 - 12:32pm

The issue is that NFLN is trying to tell TW how to run their business by using their leverage. If TW wants to put it in a sports tier, NFLN should allow that.
This reminds me of the Microsoft case. Big software company tells PC manufactures that it must include IE and only IE on it's pre-loaded PCs. No AOL or Netscape allowed. Funny how that ended with the DOJ going after Microsoft like a rabid dog, but in this case it's OK because we all love football?

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by Skin Patrol (not verified) :: Wed, 08/09/2006 - 12:38pm

GlennW-

Fair enough. You're absolutely right that I treat this as a way to get non-NFL fans to subsidize my channel.

The issue at hand is not that the NFL network has asked for money though, but that they've asked for too much. I get the feeling that you'd agree in principle that the NFL Network has as much right to be on a basic cable package as the Food Network if they were willing to do so for ad revenues alone or lowered their price to reflect viewership.

In principal I side with the NFL Network because I honestly do think that if basic service includes Oxygen than it absolutely should include an NFL Network. I can acknowledge that they are overreaching with their price while still siding with them over the cable companies. 1) I am selfish and would rather have 1 dollar NFL network for all than only get it on sports tier coverage and 2) Because I can't fault the NFL Network for trying to extort a great price out of Time Warner.

The "right" price for NFL Network to charge is the one that gets them on basic level service. They want the highest possible number for this, and Time Warner wants the lowest possible number. I don't blame either party for working from their own self interest, but ultimately as a football fan I'll blame the cable company before I'll blame the NFL Network because, as stated, the 1 dollar is perfectly acceptable to me. Maybe not to everyone else, but I'll side with it.

And of course I cringed when the NFL's position was "cable companies are trying to extort passionate fans"... of course they are. So is the NFL Network. It's just misleading rhetoric meant to trick fans into getting worked up about a negotiation process. And I bet it works.

But as a football fan that's good news for me (us?).

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by Mikey (not verified) :: Wed, 08/09/2006 - 1:21pm

This is the best story that has appeared anywhere about this complicated issue. The point about NFLN games airing on broadcast affiliates in the home markets is huge and T-W is doing a horrible job of explaining it.

One thing that would have been interesting would be to show the sub fees for networks other than ESPN. Many, many networks that are more generally popular than the NFLN are getting a lot less than .90

I really believe the NFL will have to blink first in this staredown. You're talking about a channel that has about 30 hours of mass-appeal programming ALL YEAR. Other than that you're playing to the fringe, and guess what? The fringe is why sports tier pricing exists.

The NFL invited this dispute when they renewed their Sunday Ticket exclusivity with DirecTV. Imagine if they were able to go to cable operators and say: You can offer Sunday Ticket via digital cable BUT you have to carry the NFLN on basic. My God, they'd be in 80 million homes in about three hours.

As a rule, teams and leagues overestimate how important they are to the general cable audience. The history of these disputes is that the teams have found that 95+% of the audience is perfectly willing to not see their games.

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by Tarrant (not verified) :: Wed, 08/09/2006 - 1:48pm

Of course, the fringe could also be why "Women's tier pricing" could be argued for (Oxygen, Lifetime, etc.). Or "Kid's tier pricing" (Nick et al). But they aren't. While there are a lot of channels that are popular, it's always fascinating to me to see what gets put on the 'basic tier' vs. other levels of service.

I don't blame the NFL for saying they want to be on the basic tier, but Time Warner doesn't have to accede if they don't want to. However, T-W has to deal with the reality that some fans are (depending on the area) going to consider switching to a competitor (or satellite) if they don't get the channels they want. I'm in an area where Comcast is being taken over by Time Warner Cable, and where T-W was mandated by the judge to continue honoring existing Comcast deals to put the NFL Network on a more accessible tier. I don't know what the resolution will be, but there are multiple cable options in most areas of Washington, DC, and I don't have to stay with T-W if they yank my channels away (a hockey-mad neighbor, for example, switched from RCN to Comcast/T-W because RCN moved the OLN network to a more expensive tier).

That's what is really needed. More than anything, is cable needs more competition, and not just from satellite (since many people can't get satellite). So many large metropolitan areas have only one cable company that holds everyone hostage, which is why people blame the cable company - because there's no other alternative.

When I lived in Mesa, AZ, we had one cable company for almost 10 years and I didn't know a single person that liked their channel selection or service. Suddenly a new company joins and presto, suddenly the service improves, the number of channels balloons, and prices go down.

In Washington, DC, I didn't blame Comcast for telling MASN and its $2-per-subscriber request to go jump in a lake when the only thing the channel showed was Washington Nationals games. However, some fans decided that was enough of a reason to switch to a competitor (for example, RCN) that offered the channel. Some fans may decide that T-W's intransigence vs. the NFL makes it worthwhile to switch to something else or DirecTV, and if enough of them are like that, then T-W will probably buckle and take the channel.

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by Dennis (not verified) :: Wed, 08/09/2006 - 2:38pm

The issue is that NFLN is trying to tell TW how to run their business by using their leverage. If TW wants to put it in a sports tier, NFLN should allow that.
This reminds me of the Microsoft case. Big software company tells PC manufactures that it must include IE and only IE on it’s pre-loaded PCs. No AOL or Netscape allowed. Funny how that ended with the DOJ going after Microsoft like a rabid dog, but in this case it’s OK because we all love football?

It's a totally different situation. The NFL is negotiating a contract with TW. The value of the contract is dependent on which tier the channel is in. It's no different than if they were arguing whether the fee should be 30 cents or 50 cents per subscriber.

Your analogy would work if the NFL was telling TW that if they want to carry the NFL network then they couldn't carry Fox Sports or something.

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by GlennW (not verified) :: Wed, 08/09/2006 - 2:43pm

> Of course, the fringe could also be why “Women’s tier pricing� could be argued for (Oxygen, Lifetime, etc.). Or “Kid’s tier pricing� (Nick et al). But they aren’t. While there are a lot of channels that are popular, it’s always fascinating to me to see what gets put on the ‘basic tier’ vs. other levels of service.

Mikey is right though; these networks are receiving nothing or next-to-nothing for their programming. And we can laugh about it, but a channel like Lifetime gets good ratings. Don't have comparative numbers, but I'll bet an order of magnitude better than the NFL Network's ratings.

Your point on competition is at the core of the matter, but I honestly don't see a big customer walkout based on the absence of NFLN (not compared with the cost of ~$10/year per cable customer at least). The local team's games are on free TV anyway, and as we discussed when the deal was announced, these NFLN games are ones that the customer wasn't previously getting anyway. It's always aggravating when you can't receive something new at reasonable cost, but enough to walk? I agree with the opinion that sports leagues and teams overestimate their importance with the public at large.

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by Dennis (not verified) :: Wed, 08/09/2006 - 2:45pm

Tarrant is right - the main issue is there needs to be more competition to cable. Satellite isn't an option for a lot of people due to renting or sight lines. The competition is coming via the phone companies, but not fast enough.

And anyone who thinks a la carte would save them much money is dreaming, unless they only want one or two channels. Realistic pricing would be $15 a month for ESPN, $15 for ESPN2, $10 for the local Fox sports, and so on. You'll only have to pay for the 8 channels you watch, but you'll pay just as much for them.

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by Fnor (not verified) :: Wed, 08/09/2006 - 2:47pm

Tarrant:
The narrow-issue networks (like Oxygen) that you mention are generally owned by larger studios with a stable of more popular stations. Inclusion needs to be viewed in the light that they have those other channels to bargain with.

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by Vin (not verified) :: Wed, 08/09/2006 - 3:45pm

F--k Time Warner Cable. I am switching to Direct TV. TWC is a joke, I am paying over $100 a month for crap stations and I have no choice, when all I want is the NFL network! Hear that TWC!!

94
by Vin (not verified) :: Wed, 08/09/2006 - 3:50pm

Glenn you're a TIME WARNER TOOL. Give me my NFL network or I am walking!

95
by Vin (not verified) :: Wed, 08/09/2006 - 3:56pm

GlennW,

"My cable company’s base HD package plus analog basics costs $26.95/mo. "
Is that the Time Warner employee rate, cause I am paying 300% more then that!!!

96
by GlennW (not verified) :: Wed, 08/09/2006 - 4:04pm

> Glenn you’re a TIME WARNER TOOL. Give me my NFL network or I am walking!

Walk then-- competition is the American way. I've never been a Time-Warner customer and haven't even rated them specifically. But I've been a DirecTV customer for 12 years and can honestly say that they don't have all the answers either. They're not cheap, and digital cable signal quality is superior to DirecTV's (in fact with increased signal compression, the Sunday Ticket broadcasts in particular look like crap, even compared to a cleaner analog signal). Everybody has their grievances...

97
by GlennW (not verified) :: Wed, 08/09/2006 - 4:06pm

> Is that the Time Warner employee rate, cause I am paying 300% more then that!!!

No, it's Charter Cable, top-secret employee discount (hah). That's just the basics though; I don't know what you're paying for.

98
by Vin (not verified) :: Wed, 08/09/2006 - 4:15pm

Glenn

Here is a breakdown of my Cable Bill for the Raleigh Durham area. The prices are based on the TWC website with Road Runner. Prices would be higher without RR.

DigiPic 1000 - $61.75 (Have to get this 'lowest tier' in order to get digital/HD content).

HD Suite - $6.95 (So I can get ESPN HD. This too was a fight as TWC took years to add it as TWC was fighting ESPN then over pricing. I also get a bunch of junk HD content when all I wanted was ESPN HD. I guess that junk justifies the $6.95!)

Each Digital Box - $7.64
Each Remote - $0.31

Total - $76.35 not including tax, franchise fee, extortion fee, monopoly add ons.

Now Gleen, tell me how you get all that digital content, including ESPNHD for 29.95 a month, cause I'd like to get the same deal. Or do I need to work for TWC to get it?

Point being is that you are not honest about your arguements and sound like a TWC cronnie. Give us what we want, which includes full NFL coverage, hightlights, news, pre-game shows, post-game analysis, etc., not just the 8 regular season games you mention.

99
by Adam T. (not verified) :: Wed, 08/09/2006 - 4:39pm

I just posted a big essay on the subject over on the Technology Liberation Front blog that some of you might be interested in reading (even though most of you will hate it!) Regardless, I've enjoyed the exchange going on this site.

http://www.techliberation.com/archives/040383.php

100
by GlennW (not verified) :: Wed, 08/09/2006 - 4:52pm

> Point being is that you are not honest about your arguements and sound like a TWC cronnie.

Okay, I'm lying about my cable bill. I'm dishonest. I'm a crook. By all means, cancel Time-Warner. The $61.75/mo charge just to get any HD programming at all would be the deal-breaker for me.

I don't give a damn about Time-Warner. The basic point I made is that I believe that an effective $1/mo charge for NFL-N to every typical cable or satellite subscriber in the country is excessive. Be it the charge through T-W, Comcast, DirecTV, whomever...

Here's my last Charter Cable bill, champ ($29.95 for the basics plus HD, like I said). Take it up with your senator:

Monthly Charges
Date Description Amount

07/20- 08/19 Mini Basic 13.01

07/20- 08/19 VOD .00

07/20- 08/19 HD Int. Interactive Serv 3.00

07/20- 08/19 Basic A/O .00

07/20- 08/19 Digital Rec & Access Fee 6.95
Digital Receiver $3.95 Digital Receiver Service $3.00
07/20- 08/19 EFT .00

07/20- 08/19 No Home Wire .00

07/20- 08/19 HDTV Pak With Discovery 3.99

101
by eaglesfan99887 (not verified) :: Wed, 08/09/2006 - 6:16pm

I stopped reading these points in the 30s, but I believe Verizon is going to begin offering a la carte programming in the near future. They are upgrading many areas with fiber lines now - primarily to speed up DSL but also to offer TV programming. You don't think they'd just sit idly while Comcast and other start offering phone services. So they're coming, and their current plan is to offer a la carte. So consumers truly may have a choice between 2 types of plans, and from 2+ companies. Would be a nice change (but then again, look at the 2 companies involved. It will probably still get screwed up).

Also, one more note about why everyone can't get DirectTV. I live in the Philly area and the Phils, Flyers and Sixers are only available on Comcast Sports Channel. Of course they won't let DirectTV carry this channel. So you get screwed. You can pick up some games on the other teams' channels, but it's very sporadic. So as much as I hate Comcast, I'm pretty much stuck with them if I want to watch those 3 teams (I know, they all suck, I should just give them up entirely....)

102
by Mark (not verified) :: Wed, 08/09/2006 - 6:26pm

Adam T: Two comments on your essay:

1. You said the following: "In one of its decisions this week, the agency actually argued that consumers would be 'significantly and irreparably harm[ed]' if they were forced to live with the NFL Network’s coverage of training camps and pre-season games!" That should be "if they were forced to live without the NFL Network's coverage," not "if they were forced to live with the NFL Network's coverage."

2. The "forced speech" argument doesn't work here. This is not akin to a newspaper being told what to print, which is offensive in part because there is no legal barrier to entry in the newspaper market. There is no need to regulate the content of papers because anyone can start a competing paper to express differing viewpoinnts. There is a legal barrier to entry in the cable market, since a cable franchise usually is a monopoly. In this case, since the right for a cable system to exist is given in the first place by the government, and since the cable system also is given the right to be free from direct competition, the government has a justifiable interest in limited regulation of the services provided so that the public interest is served. In that respect, the FCC stepping in here is somewhat akin to the enactment of the "must carry" rules that you reference in your essay.

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by GlennW (not verified) :: Wed, 08/09/2006 - 6:27pm

> Also, one more note about why everyone can’t get DirectTV. I live in the Philly area and the Phils, Flyers and Sixers are only available on Comcast Sports Channel. Of course they won’t let DirectTV carry this channel. So you get screwed.

That sucks. You know, I agreed with about 90% of that Tech Liberation editorial on the cable sports free lunch, but the major omission was any commentary on this kind of pseudo-monopolistic behavior. You should at least be able to buy the lunch in some arrangement, on all or most available broadcast media.

104
by DGL (not verified) :: Wed, 08/09/2006 - 11:37pm

#101: Verizon isn't offering a la carte; their FiOS TV offer is package-based (movies, sports, movie/sports, HBO, Cinemax, Spanish language, HBO/Cinemax, WWE, and Karaoke packages) with individual international-channel add-ons (TV Japan, RAI, CTI, etc.). See link.

Verizon and AT&T have been lobbying for a la carte not because they want to offer it to their customers, but because they want programmers to be required to offer it to them. If they can get Congress or the FCC to require "video service providers" to offer a la carte, they can include in that a requirement that programmers offer channels to service providers on an a la carte basis -- no more being forced to take ESPNews to get ESPN.

Plus, it makes them look like the good guy to the consumers.

105
by witless chum (not verified) :: Thu, 08/10/2006 - 11:19am

Charter in Kalamazoo, MI appears to not have the NFL network at any price either.

Hopefully someone bends by the regular season, I'd flip to it occasionally, although I think I'd watch it most in the off season as a kind of methadone.

106
by Lee in Dallas (not verified) :: Sat, 08/12/2006 - 11:55am

Remember "free TV"? Advertising paid for it.... Cable and satellite, now we pay for advertising.

107
by Fraser in Brooklyn (not verified) :: Sat, 08/12/2006 - 8:15pm

The NFL season starts in 3 weeks. Time Warner and NFL to work this out now. Cut the Crap!

108
by Raider_T (not verified) :: Sun, 08/27/2006 - 7:12pm

I am pissed at the hostle taker over by TWC. It's funny that here it is at the beginning of the football season, there's a hostle taker over by a cable company, threatening to take away a pertinent channel in regards to the football minded customers... Listen at their commercials as they say, "thank you for welcoming us as a guest into your home". I didn't invite them to take over my cable service. If they didn't come in like some type of terrorist I might be enclined to their comments...

If they make good on their promise to take away the NFL-N on 9-3-06, I'm getting rid of them and cable and will turn to DirecTV...

109
by John (not verified) :: Mon, 09/11/2006 - 8:34pm

RE: 108
Were you on Adelphia? You do understand that they went bankrupt because their executive officers were incompetent and stealing money from the company, right?

Comcast and TWC stepped in and split Adelphia in half. Yes, they did it because there was money to be made. If they hadn't, you'd be on satellite or bunny-ears right now.
As a neutral party interested in the dispute, I have to say I'm glad to see mature and well thought-out discussions taking place here. I have to admit I expected to see "DURRR I WANT NFL!!!" and am glad that I was mistaken.

110
by Jeeba (not verified) :: Mon, 10/29/2007 - 1:22am

Well I live in Florida and Direct TV sucks out here because it rains all the friggin time, and first the cable company put out commercials saying it would have "ALL" of the NFL games but now the commercials say "many" NFL games... Time-Warner is the big fat liar in my area.. I want them to keep the friggin promise they plastered on my TV from March to August!

111
by flu (not verified) :: Sun, 11/18/2007 - 12:10am

I have time warner and i have been trying to make another choice but i've got trees all around me and can't get a sat. signal. I would have, long ago, given twc the boot if not for that. Here it is less than a week from Thanksgiving and they still have not worked this thing out. I understand the fight for N.Y. but there are a hell of a lot of cable subscribers/NFL Fans all over the country that are impacted here. I am tempted to cut down a few trees here but i'm sure my neighbors would not appreciate me cutting down their trees just for football. I hope twc looses a lot of customers over this.

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by Rhett (not verified) :: Wed, 11/28/2007 - 12:32am

Screw the NFL. ESPN has stuff EVERY day to watch. The NFL if just being greedy. Why else start their own network just to show an extra few games? I will keep my Time Warner and be happy. I will go to Hooters and watch the game instead.