Industry Voices—Ring: Can regional sports networks pivot to direct-to-consumer?

While RSN fees were hidden for decades, operators have increasingly been forced to disclose the fees and provide packages without RSNs. (SportsTime Ohio)
Brian Ring Industry Voices

“Non-sports viewers are subsidizing the bundle!”

It’s a tough statement to argue with. For decades, regional sports network (RSN) fees were literally hidden in pay TV operator packages, or bundles. Even if you never watched exclusive MLB, NBA and NHL games, your monthly bill reflected a $6 to $8 per month fee paid to your local RSN.

The truth is, I’m a fan of my local baseball team, and so I’m a beneficiary of this arrangement. I’d easily pay at least double that price for my RSN, if I had to.

But content bundles provide economic utility that’s hard to quantify. We scoff at "fair weather" fans, but TV ratings prove that most of us are -- and having the option to watch a team when they get hot is an example of that hidden utility.

The statement is also a bit of semantics. We all "subsidize" channels we don’t watch. Nielsen says we watch about 17 of the hundreds provided. MSNBC viewers would be shocked to learn how much of their bill goes to FOX News.

Most importantly, while RSN fees were hidden for decades, operators have increasingly been forced to disclose the fees and provide packages without RSNs. (You may have to call for these options, so it’s still the dark pattern UX we expect from operators, but it’s progress.)

Despite these counterpoints, I’m hereby officially conceding. As I wrote in my October column, TV is pivoting from wholesale to direct-to-consumer streaming, and the Regional Sports Networks need to retool fast.

DTC streaming: Will branding matter?

I'm afraid branding will matter for DTC streaming. And flexible, uber-freemium DTC models are bonkers to build and optimize. But all the best streamers will do it.

Building a channel and app brand in alignment with teams and leagues that license the rights will be a difficult endeavor and not all RSNs are equally equipped.

How many people regularly watch local sports? Sometimes? How many never do?

For that matter, how many loyal viewers of the RSN can even properly name the channel or find its webpage?

RELATED: YouTube TV-Sinclair fight proves regional sports need a la carte model: analyst

There’s a dearth of data on this topic. One datapoint comes from Dish chairman Charlie Ergen’s statement: “The vast, vast majority of our customers do not watch a single second of regional sports content.” OK. But that could still mean, what: 70%? 80%? 95%? That’s a huge difference that impacts go-forward strategies for RSNs.

That knowledge gap inspired me to run a simple quick-take survey on this topic. (Consider the results highly qualitative and in need of further research. Samples over 305 were taken from within each RSN’s respective state. Survey samples, instrument and methodology details are in the report.)

The bottom line? Not all RSNs are equal

NESN and SportsTime Ohio came out on top, but it’s far more interesting to look at the data included in this chart and posit your own explanations for the variations. I’ve also included DMA and state populations for further context. Like any data model, a consumer survey is never exactly right. But it can be useful.

Here in visual form are a few results from part 2 of my DTC #FutureOfTV survey, What Fate, RSNs? The full, free report, including an infographic on the size of the sports betting market, is available here.

Thirty-eight percent of internet users in Massachusetts reported watching NESN regularly or sometimes in the past year, with only 49% of the population reporting that they “never watched” the channel. (In Texas, a whopping 79% of the population reported “never watching” AT&T SportsNet Houston.) Another top performer? SportsTime Ohio, with 32% of internet users reporting they sometimes or regularly watched the channel.

We already knew that every RSN needs to invest in consumer branding and product innovation in a post-bundle world.

Now add COVID-19 to that equation. RSNs, teams and leagues are going to be walking multiple tightropes at once here. They’ll need to blend TV with super-fan activities, social streaming with zoom-casting in ways they’ve only brainstormed about in the off-season.

Teams, brands and TV crews at the best RSNs will successfully merge in-venue with at-home, betting with gamification, and social with TV.

Some have more work to do than others.

For the full report, sign up for our free quarterly research letter here

Brian Ring is a media tech nerd and go-to-market hired-gun with two decades of experience designing, marketing and selling video & streaming TV tech to operators, publishers, networks, studios and broadcasters around the world. He's also a passionate researcher, analyst and writer that has contributed extensively to our industry's discussion about TV's evolution from free to pay, OTA to OTT, and from the big screen to all screens. Feel free to propose topics on Twitter: @BrianLRing

Industry Voices are opinion columns written by outside contributors—often industry experts or analysts—who are invited to the conversation by FierceVideo staff. They do not represent the opinions of FierceVideo.