Interesting article I found while I had a drink.
Thereās a lot of pessimism facing Jazz fans for wanting a specialized streaming service for the Jazz but we break down how reality is on their side
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Thereās a lot of pessimism facing Jazz fans for wanting a specialized streaming service for the Jazz but we break down how reality is on their side
By
adambushman1 Oct 11, 2021, 11:43am MDT
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Despite the arguments against a streaming service, thereās enough evidence supporting the practicality of Jazz fan requests for alternative viewing methods Photo by David Sherman/NBAE via Getty Images
Every so often our social media-verse is upended by various viral topics eliciting our attention. Be it milk crates, games about squids, or the next 007, youāre bound to have your phone blow up eventually.
The
Utah Jazz fanbase experienced a similar phenomenon mid-last week on the subject of mediums with which to watch the team. Who knew the biggest frustration for fans would be impediments to consume the product?
After reports of
Dish Network dropping ATTSNhit the news cycles, the beehive state was a buzz (I just had to okay) with fans clamoring for alternative methods to watch their team.
Fans were met with some disdain, primarily being accused of wanting the games for free. You can imagine how that was received.
Generally speaking, fans have been discouraged by most media personnel about alternative methods to watch their team. Today, weāll debunk some of those arguments and explain a service that follows a model seen across other entertainment industries and
Important Context
Itās important to note how the Jazz make money from their games.
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The Utah Jazz collect revenue from the league as part of the NBAās āsharingā of revenue generated from NBA League Pass (available to out of market fans) and National TV games. Whatever is done with the Jazz local broadcast wonāt affect these options. So weāll factor them out for this discussion.
Local TV related revenue streams for the Utah Jazz Adam Bushman, SLC Dunk
The Utah Jazz then collect revenue from advertisements, those announced during the broadcast (i.e. āJiffy Lube Team Timeoutā or āFord Dunkā) as well as ads that run during commercial breaks.
Per a source within the Jazz organization, the Utah Jazz coordinate and sell these advertisement spots directly with local businesses. Therefore, any ad revenue currently collected will continue in a streaming service.
That leaves local TV rights revenue from their current partner AT&T SportsNet. The topics and math below related to a TV deal (or replacing such with a streaming service) are designed to replace this revenue.
The Service
Early last week a
proposal was made via Twitter thread for an in-house streaming service. Following additional research and thanks to a more appropriate medium, Iād like to detail the service.
Imagine a service that has live and pre-recorded content. This service is accessible from any internet browser, but also features a channel on the various casting apps like Roku, Fire Stick, and Apple TV, as well as apps from your phoneās app store.
Imagine a service thatās paid via a monthly subscription or, for a small discount, paid on an annual basis. There are varying levels of subscriptions, unlocking additional content and removing certain advertisements.
Imagine this service creates catered, unique content and series that cannot be found elsewhere.
You probably donāt have to imagine for too long before settling on a service that actually exists: Hulu. While following a similar model, the service actually being described is a Utah Jazz streaming service.
ESPN+ is a similar model concentrated in the sports industry. Again, widely available, live and pre-recorded content, subscription-based, unique series, and access to premium features.
While such services are increasingly more abundant, itās not without its difficulties. Thereās infrastructure, physical and virtual, to setup in addition to content teams to assemble.
The point is such services are out there and are the future (more on these topics later).
āJazz are Leaving A Lot of Money on the Tableā
Many have pointed to the fact that the Jazz are likely to command $30-$40M in TV rights revenue with a new deal given the excellent local ratings and recently signed deals from other teams.
If the Utah Jazz sole goal is to maximize their TV rights revenue and grab every cent available to them, a direct-to-consumer streaming service will not get that done.
Such a goal comes at a cost, specifically pricing out. $85 per month (your average TV packaging including local sports) and all of its red tape has
proven to turn away customers, and Jazz fans are no exception.
Fortunately, the Utah Jazz are giving indications that maximizing TV rights revenue IS NOT their only goal:
āStreaming is absolutely our top priority... There are gonna be better options in the future.ā -
Jim Olson, ESPN700
āBetter access to broadcasts remains a top priority for future seasons, and we are pursuing ways to improve viewing options of Jazz games for fans.ā - Jazz Senior Vice President of Communications Frank Zang commented
to the Salt Lake Tribune.
Ryan Smith and Dwyane Wade take in the Jazz-Clippers series in Salt Lake City Photo by David Sherman/NBAE via Getty Images
āI do believe that we can do better at not just the one size fits all... Iām excited for that challenge and this is right in our wheelhouse.ā - Jazz Majority Owner Ryan Smith commented
to the Salt Lake Tribune.
My interpretation here is that giving consumers an excellent experience is as much of a priority as securing a lucrative TV deal.
āThe Math is Hardā
Some math is hard, but as long as we keep our facts straight, anyone could do fine with this subject matter.
In fairness, what is actually meant with this argument against streaming is that the balance between volume (# of subscribers) and efficiency (per month subscription cost) is difficult to equate the current and future TV deal approximations.
This argument generally comes in response to ideas such as matching the league pass cost with 20K subscribers. That math is hard, but if we use what real numbers we have, we can get there.
As a stipulation, we donāt have all the numbers. In fact, Jazz President Jim Olson on
ESPN700ās Friday afternoon drive show admitted that no one knows the real breakdown of Utah TV households whose focus with their TV package is the Utah Jazz.
However, we can get a good idea with the numbers we do have. Letās go over those (watch the video if math is intimidating):
*NOTE: this is an average rating and is not indicative of how many TV households are consuming Jazz games; that number will be higher
Based on the above numbers, we can deduce that the average number of households tuning into Jazz games via local TV is approximately 70,800 (0.059 * 1.2M).
But remember, thatās an average. The REAL % of TV households consuming Jazz games is likely in the 8-10% range. People pay and donāt watch all the time, or they record the game, or go to the game.
Such human behavior affects the public TV rating, but TV providers are still cashing in and so would the Jazz.
At 8%, the Jazz have approximately 96,000 TV households tuning in via local TV. At 10%, the Jazz have approximately 120,000 TV households. These numbers also donāt count cord cutters who have opted to hunt for free streams every game.
In order to replace a new TV deal worth $30-$40 million, subscribers would need to pay between $20 and $35 monthly for the streaming service outlined above.
($30M / 120K / 12 = $20.83 and $40M / 100K / 12 = $33.33)
If Jazz are rolling out their own subscription service, thereās no TV deal which means thereās no traditional cable channel where you can watch the games. The TV household volume mentioned above would have to move over.
Good news is the math still works.
If you want to keep cable, $70 (basic) + $35 (Jazz) = $105, a $20 increase from what TV providers charge now. Cable loyalists will pay, just like many Jazz loyalists have overpaid for years.
If you want 100% streaming + cable, $65 (Hulu TV) + $35 (Jazz) = $90, only $5 more than what TV providers charge now. Theyāll do it in a heartbeat.
If youāve only ever wanted the Jazz, suddenly your bill is reduced +60% or if youāve cut the cord, youāre only paying 40% of what you once paid.
As imperfect a poll as you can imagine, thereās something to a $20-$35 per month option being viable.
Again, there are still problems to work out but thereās clearly a path to this working.
āThere Just Arenāt Any Precedentsā
This is a multi-layered argument. In a general sense, itās incorrect. Sports are entertainment and the entertainment industry is actively bucking the old model sports is still stuck in.
For example, NBC continues to land TV rights revenue to TV networks but are also streaming live and catered content through Peacock, their in-house streaming service.
We already talked about ESPN+, which is another model like NBC in the sports verse.
But when pundits bring up precedents, theyāre really referring to a streaming service specializing in regional sports. Theyāre not referring to FuboTV,
which was announced today as the 2nd streaming option for ATTSN.
There is a model forthcoming that is an over-the-counter, regional specialized streaming service from Sinclair Broadcast Group.
Sinclair, through their subsidiary Bally Sports,
Sinclair owns the regional sports rights to āmore than half of all MLB, NHL and NBA teams based in the United States.ā You may remember
Sinclair looking to buy out ATTSNās rights to the Utah Jazz back in 2019.
Sinclair is an RSN rights powerhouse and using their widespread reach to implement
an over the counter option for fans beginning for next yearās baseball season upon reaching their funding goals. Itās reported that their target monthly subscription fee would be $23 for customers in market.
What does this mean for Jazz fans?
Suppose the Utah Jazz and Sinclair strike a TV deal for the 2022-23 season. Jazz fans would have the option, through Sinclairās streaming service, to pay $23/month and gain access to all games currently and historically distributed through ATTSN.
Not only is this model in the final stages of development as a real trailblazer, it validates our math of $20-$35 per month.
Thereās disruption happening all over the entertainment industry. Even Jim Olsen mentioned in the aforementioned ESPN700 interview that, āThe current model isnāt working... Weāre considering everything.ā While the sports industry is lagging a bit behind, thereās evidence they are about to embark on a new era.
Given the Jazz desire to innovate and blaze new trails like with the practice facility, itās disingenuous to argue against a streaming service because there are no active precedents.
Donāt buy the narrative circulating the Utah airwaves that a specialized streaming service for the Utah Jazz is impossible and outlandish.
Such claims are ignorant of the entertainment industry setting a precedent for sports and ignores forthcoming models backed by regional sports network powerhouses like Sinclair Broadcasting Group.
Itās also disingenuous to praise Ryan Smith and the Jazz for their innovative nature and at the same time cast aside such an idea as āunprecedentedā and ānot how things are doneā.
Ryan Smith is out to challenge everything; why is the TV deal an exception? Photo by Adam Pantozzi/NBAE via Getty Images
The counterarguments also fight what they call āhard mathā with flawed math of their own, when in reality there is enough volume to command the TV deal money the Jazz could get typically via an exclusive streaming service.
Furthermore, such a service priced as outlined above leaves enough room for cable loyalists to continue to subscribe to basic services distributing national content while regaining a significant portion of the fanbase cut off from the team due to a multitude of factors.
The reality, as explained here, paints an optimistic future for Jazz fans following the conclusion of the ATTSN deal this season.