Saturday, June 02, 2007

$7.5 Million is Not Free

The PSU bottle opener is only $8.95

The business page can be dull stories of earnings reports and promotion of Jane Smith to be the Senior Account Executive. Neither of these qualify as page turners but the drama unfolding between Comcast (and other cable providers) and the Big Ten Network (BTN) is one of those situations where the strategy and tactics are the equal of any college football game for entertainment value. Anyone who has ever been involved with introducing a new product can appreciate the tremendous pressure the BTN sales team is under and the challenge of getting that key customer on board.

The Patriot News of Harrisburg ran an excellent article about the situation with Penn State. An interesting quote that put the price per subscriber at even a higher rate than be reported elsewhere.

The Big Ten has ruffled feathers at Comcast and other suppliers by demanding a steep $1.14 per household. That would be the third-highest rate among all cable channels, behind only ESPN ($3) and TNT ($1.26) and ahead of the NFL Network (75 cents).

The interesting choice of the word demanded. That is a strong term which sets the tone for the article which questions the wisdom of the BTN. A note to David Jones, "Follow the moneyto the Big $7.5 Million Each Network ." The BTN is, Mr. Jones points out very nicely, is taking what was once on "free" (or at least significantly less the $12.00 per year), and wringing ever last cent out of the fan and non-fan that the Bigger 10 thinks they can get.

As Fox is involved with this with DirecTV and in production it is easy to imagine the pitch to the Big Ten, "You have a base of devoted fans, have built up a tremendous brand but, what you're getting from ESPN/ABC is just a trifle of your products value. Gentlemen, it is time to form your own network, cut out the middle man and cash in." Is greed still the word?

At what point will they resort to the NFL Channel tactic of holding back games as BTN exclusives. Stay tuned...if you can afford it.

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