Industry Voices—Ring: The TV bundle is fracturing. Are RSNs on the fault line?

SportsNet LA
Almost 65% of Californian’s surveyed said they never watched their local RSN, and only 10% claimed to watch it regularly.(Charter)
Brian Ring Industry Voices

As the traditional pay TV channel bundle fragments into disparate streaming services, regional sports networks could be at risk of falling through the cracks.

On March 20, 2017, the Wall Street Journal published a seminal report on the economics of legacy cable and satellite TV bundles. You know the story: Sports channels cost a lot for MVPDs to carry -- at least, when judged by the Nielsen viewership numbers used for WSJ’s reporting.

As an example, take Fox Sports 2, listed at the right in the figure below. Nielsen viewership, plotted by the light blue axis on the left, is low relative to the other listed channels. On that basis, the revenue FS2 receives per viewer is high. This does not mean it’s not the correct market price set by informed buyers and sellers. Indeed, I assume that it is. But it does highlight the fact that revenue per subscriber doesn’t always correlate to Nielsen’s viewership metrics.

RSNs were excluded from the analysis. But here’s what the Journal said about them in this series:

“Regional sports networks are known to be among the most relatively costly networks, though they argue that their passionate local fan bases make their price worth it.”

Full disclosure: I’m one of those passionate local fans! Indeed, here’s a love letter I wrote to my local RSN Broadcast team in a widely read sports video newsletter. My $8 monthly RSN fee? I’d easily pay double. But how many of me are out there?

It’s been three years since I wrote that post. In 2019, direct-to-consumer streaming continues to weaken the legacy pay TV bundle. Live sports channels, especially RSNs, are right on the fault line of TV as it shifts from a legacy wholesale model to streaming OTT directly to consumers.

With the average cost of pay TV in the U.S. sky-high compared to every other nation on the planet, I decided it was time to field an admittedly a simplistic, experimental survey. There’s scant public data on this subject, and I wanted to see if I could add a bit of color. As with all my research, it was completely curiosity-driven with zero ulterior motives or vendors dictating the survey design or analysis.

To get it done, I had to restrict the survey to California only, as this enabled me to prime respondents with the channel names of the most popular RSNs in Northern and Southern California. I kept the question simple.

My goal was to find out if I could quantify the value of these channels not only in terms of those passionate local fans, but also to others that appreciate the convenience and access they have just in case things get interesting for the local team.

Think of it as insurance against TV FOMO. A casual fan that might have no interest in the regular season might also never want to miss a playoff game or an exciting new player. Both can be true. Uncertainty in sports is what drives excitement and emotion -- and the TV bundle ensures ultimate viewing satisfaction.

Finally, I wondered if I could find insights at the other end of the RSN fandom spectrum? How many would say that they “Never” watched that channel? A high number might be an indicator of low relevance, which would presumably translate into a decision when shopping for the right skinny bundle.

Well, my survey result is laid out below and, spoiler alert, it’s not a positive story. At least, not in comparison to the news networks tested. (I plan to expand the list of tested channels in my next quarterly report.)

The bottom line? Almost 65% of Californian’s surveyed said they never watched their local RSN and only 10% claimed to watch it regularly. How does that compare to ESPN, FS1, CNN and Fox News? Only 48% reported that they never watch CNN -- the lowest number of the five channels. And 18.6% reported they regularly watched Fox News, the highest of the five channels tested.

As with any survey, this is meant to be a starting point for conversation, feedback, and more research. I look forward to reactions, insights and comments by email, Twitter or LinkedIn.

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

Brian Ring is a researcher, video innovator & 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 media 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.

Recently, Brian made eighteen original online survey reports free and committed to add four a year. It's available to email subscribers here:

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.