Price premium for time sensitive video

I don’t watch a lot of television.  When I say that I really mean I don’t watch programmed channels; I have two televisions and they often have something on the screen, it’s just that it doesn’t come from a television tuner, cable box, or sattelite receiver.  Instead it comes from a DVD or Blu-Ray player, from a game console, or from the Internet through a PC.

I’ve happily watched on demand programming that I would have previously watched as programmed channel content for about five years now.  That content is mostly free, making it the equivalent to over-the-air broadcast television, though some of it is via paid subscriptions like Netflix or Amazon Prime.  I’m happy to pay for high quality, commercial-free content.  Paying for the priviledge of watching commercials is, however, a non-starter.  Interruption marketing is so 20th Century.  Five years of no programmed channels makes it pretty clear that there are two kinds of video content – stuff that only is valuable when it is live and everything else.  Into the first category I generally place breaking news, live entertainment, and sports.  Every. Single. Other. Piece. of video retains its value when timeshifted in exactly the same way that digital objects can be costlessly replicated.  If you don’t understand how one works, then you probably don’t understand how the other works, and vice versa.

The free and rational market would respond to this kind of phenomenon by creating and monetizing distribution vectors that allow them to capitalize on the timeless nature of non-live content, as well as the ephemeral value of live content.  Unfortunately we don’t have free or rational markets for video content, we have monopolies, tyranies, and mafias.  What follows is my personal tale of woe.

  • I like NFL football.
  • I root for the reigning Superbowl champion Seattle Seahawks.
  • I live in Orange County, New York.
  • You cannot receive broadcast television here, because no television re-transmitters were ever built in the analog television era as analog signals from the Empire State Building (70 miles away) traveled far and wide.  In the digital television era, building re-transmitters isn’t a good capital investment, since (nearly) everyone has cable.
  • The NFL has an anti-trust exemption which permits it to engage in monopolistic practices.
  • The NFL licensed the local broadcast of its games to national broadcast networks (FOX and CBS).
  • Which games are shown is determined by “home team viewing area” which reflects analog broadcast reach.
  • The NFL licensed the nationwide broadcast of its regular season weekend day games to a satellite provider (DirecTV).
  • Games that conflict with the local game broadcast are blacked out on satellite, because they are available on the local broadcast channel.
  • The NFL licensed the broadcast of its Sunday night games to a national broadcast network (NBC).
  • The NFL licensed the broadcast of its Monday night games to a cable-only network (ESPN).
  • The NFL licensed the broadcast of its Thursday night games to itself (NFL Network).
  • The NFL licenses the broadcast of Thanksgiving Day games, playoff games, and the Superbowl to national broadcast networks.
  • To have the opportunity to watch “local broadcast area” games on the national broadcast networks (CBS, NBC, FOX), one must live in a place where there are local digital broadcast stations, or subscribe to cable TV or satellite TV.
  • Prior to them being sued out of existence by the content owners and national broadcast networks, I used to subscribe to Aereo, which solved the problem of not actually having a broadcast signal to receive.  It cost $7/month.
  • Time-Warner Cable charges something for “basic cable” but I can’t tell you what that is because their website is such an abomination that it can’t actually quote me prices before I get tired of waiting.
  • To have the opportunity to watch every NFL game in your local broadcast area, one must be able to view five channels (CBS, NBC, FOX, ESPN, NFLN), which requires you to be either a cable TV subscriber or satellite TV subscriber.
  • To get ESPN DirecTV requires their “Entertainment” package; 140 channels for 24 months @$58/month ($1392.00)
  • To get NFLN Time-Warner Cable requires their “PreferredTV” package; 200 channels for 12 months @$62/month ($744.00)
  • To get NFLN DirecTV requies their “Choice” package; 150 channels for 24 months @$67/month ($1608)
  • To have the opportunity to watch every NFL game every weekend (which is the only option if you are a fan of a team not in your local broadcast area), you must buy NFL Sunday Ticket, which is only available through DirecTV.
  • For the past three years I have been able to pay about $350 to stream games over the Internet without having a satellite TV subscription, an option that mimics the availability of NFL games outside the USA.  That option is no longer available if DirecTV has decided you live in a structure that is capable of having a satellite dish installed to receive the signal over the air instead of through the Internet.  They have made that decision in my case.
  • Despite compelling their customers into a 24 month contract, DirecTV can only offer NFL Sunday Ticket on a per-season basis.

So, my best option to watch live games is to subscribe to DirecTV at the Choice package level, add on the NFL Sunday Ticket option (twice) and pay at least $2600 to get three national broadcast channels that should be free and were previously available for $168, two cable channels, and a sports package that was previously available for $350.  That is a 500% increase in cost just to watch football.  (In fairness, DirecTV has massive discounts, including a free year of Sunday Ticket for new customers, but they vary and have lots of caveats and I’m not sure I’m actually a new customer because I’ve been getting Sunday Ticket from them for three years, so I’m ignoring them.)

For the NFL that means that each of the televised regular season and playoff games over two seasons costs me about $5 to watch, but if I only want to watch the 16 games that my team is actually playing, it costs me about $80 dollars per game.

For DirecTV that means that each of those five channels I actually want to watch costs me about $380 dollars across two years or about $16 per month.

I’m a fan, and I can afford it, so it is quite likely I will do this, but that doesn’t make it right.

Particularly since the alternative is to be patient, pay the NFL $70 directly and watch HD streams of games after the last game is played (usually Monday night), which is an excellent example of the difference in value between a live sporting event and one that is not live.  That means that works out to be $0.26 per game if I wait two to four days to watch them.

Watching NFL games live on television incurs a 1912% price premium over the same game time-shifted from Sunday to Tuesday.