Wednesday, January 24, 2007

Thanks, MLB...

Dear Major League Baseball,

It has been a genuine pleasure to watch baseball games from all over the league on your MLB Extra Innings package, which we ordered via our Dish Network subscription. Even though it cost us $150 for the year, we thoroughly enjoyed it, given the sheer amount of material the payment entitled us to receive. So, thank you, for a few years of excellent coverage.

So then, you will understand my relative discontent with the announcement that the Extra Innings package will likely be relocated exclusively to DirecTV this year, meaning that I and thousands of other fans who would have otherwise re-upped our subscriptions are now no longer able to.

You have decided to sell me and fans like me out. Why? More money, naturally. It seems Dish Network is offering an exclusivity deal to you for the price of $100 million per year. The current provider, In Demand, is upping its own offer to compete, but at best their offer will reach only $70 million per year.

Now, let us do some simple mathematics, based upon the available facts in the aforelinked article:

Best estimate states that MLB Extra Innings had approximately 750,000 subscribers.

At 150 bucks each, that equals $112.5 million dollars earned by the service.

BUT, DirecTV is only in 15% of American households. So, let us hypothesize that only 15% of those 750,000 subscribers ordered it through DirecTV. That means only 112,500 viewers, equaling (if current rates hold, which is probably asking a lot) a mere $16.9 million dollars.

Now, let us assume that a LOT of people will not be angered by MLB's sudden change of heart, and decide to follow MLB to DirecTV. Let's be very generous and say their subscriptions double, to 250,000. And let's say, to compensate for the relative lesser amount of viewers, Extra Innings decides to double its price to 300 bucks, since it's become apparent that greed is not a dissuading factor in this scenario. That still only equals $75 million per year, well below what DirecTV will shell out. So forgive me if I can’t quite see what DirecTV gets out of this deal, besides maybe bragging rights.

For DirecTV, of course, is already in the business of making folks pay through the nose for "exclusive" coverage of a beloved sport. Witness their NFL package, which offers much the same deal as Extra Innings , and has been exclusive to their programming for years. For the low, low cost of $20.82 each month for 11 months (or $229.02), fans get access to every game. And that’s the pre-season “bargain” price. And despite the lure of this, ahem, deal, DirecTV has still only cleared 15% of U.S. homes.

I have been very pleased with my Dish Network service. I have no intention of changing providers, even if my favorite sport is relocating its premium service under the guise of “exclusivity.” So MLB, I must inform you that if the deal in question does indeed go through, you will lose at least one subscriber in the transition. And I have a sneaking suspicion that I am not alone.

Sincerely,
Jeff

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