Media Notebook: On Mergers and Nielsen Numbers

Ian Hitchcock

The two largest cable providers want to join forces, and Neilsen has some interesting numbers on the popularity of football on TV.

A couple of media stories of interest crossed our desk this week, so lets hit the high notes

Comcast Buying Time Warner Cable

The largest cable provider in the U.S is trying to buy the second largest for a cool $45 Billion.

If approved, Comcast will have over 30 million customers, or almost 30% of all the subscription viewers in the U.S. The deal would mean Comcast would be in 19 of the 20 biggest TV markets, as well as being the #1 provider of Internet broadband in the country.

The purchase must get approval from the Justice Department and the FCC, and the process could take up to a year. Comcast will argue that cable is a natural geographic monopoly in many markets and that they face increasing competition from satellite providers as well as telecoms such as AT&T and Verizon.

No doubt cable's competition is increasing across the board, with Google and Apple getting into high-speed broadband delivery. Services like Netflix are also offering new content without subscribing to a cable tier of channels that you have little or no interest in.

The cable industry has seen a drop of over 5 million customers since 2010, as more and more customers are "cutting the cord."

It is internet service that is rising in value at the fastest pace as increasing numbers use mobile devices for video viewing.

The biggest stumbling block to getting approval for Comcast will be the argument that the purchase gives them too much control over programming. You can expect negotiations with content providers over retransmission fees to get even rougher it Comcast has control over 30 million viewers.

Which in a roundabout way brings us to the Longhorn Network.

I got a few emails from people who assumed that since Time Warner now carries the LHN that it would automatically be blended in to Comcast.

Don't bet on it. First remember that most markets are a geographical monopoly where a Comcast or Time Warner dominates. That won't change.

Comcast (& Time Warner) are in the content business themselves. With this acquisition, Comcast would own 7 Regional Sports Networks in the Top 10 markets. Comcast SportsNet Houston is currently under Chapter 11 bankruptcy protection, and its parent company will no doubt be more concerned with protecting its own product than giving the competition a break on carriage fees.

Sports programming is the Holy Grail for all content providers today. Generally seen as "DVR proof," live sports brings an attractive audience to the video screen, while channels like ESPN and the Regional Sports Networks serve as stalking horses for distributors, bringing in subscriptions from hardcore sports fans while getting everyone who "bundles" channels to help pay for it.

According to industry analyst SNL Kagan, ESPN collects $5.50 per month per basic cable subscriber - or over $6.6 Billion a year when you add in ESPN2 (70 cents a month).  That is before they sell a single commercial, which brings in an additional $3.5 Billion in revenue.

It's been an upward arrow financially for the providers, distributors, networks - as well as the professional and college teams. How to keep the upward movement is the question, and everyone involved is trying to hedge their bets on what the future may hold.

Nielsen 2013 Year in Sports Media

Nielsen recently introduced its annual snapshot look at the leading trends among the major sports on TV. They give a clear picture as to why sports programming is so valuable.

NFL

The NFL continues to be ratings juggernaut that shows no sign of slowing down. The Nielsen report looks at the 2012-13 season, and when I looked at the 2013-14 numbers they were even better.

The Seattle-Denver Super Bowl (or as Jon Stewart called it, "Take Denver To Work Day") set a record with over 111 million viewers. But the league dominates sports programming through the entire fall.

The two championship games broke the 50 million-viewer barriers. The AFC contest between Peyton Manning and the Denver Broncos and Tom Brady and the New England Patriots drew 51.3 million viewers.

Seattle's defeat of San Francisco had a viewing audience of 55.9 million. To give you some kind of perspective, the most watched college game of the BCS era was the 2006 Texas-USC championship game, which drew 35.6 million viewers.

College Football

The NFL is the #1 sport on TV, while college football is now a solid #2. And when it comes to a conference breakdown on most viewed games once again it is the SEC! SEC! SEC!

The three top rated regular season games were from the Southeastern Conference: Alabama vs. Auburn (13.8 million), Alabama vs. Texas A&M (13.6 million) and Alabama vs. LSU (11.9 million)

The most-watched Big 12 game was the season finale between OU and Oklahoma State, which with 7.3 million viewers wouldn't crack the Top 5 in the SEC.

According to Nielsen, the Top 10 nationally televised games involving an SEC team averaged 9.7 million viewers. Here is how other leagues compared:

SEC                 9.7 million viewers

Big 10              7.0 million viewers

ACC                 5.3 million viewers

Big 12              4.2 million viewers

Notre Dame     4.0 million viewers

Pac 12             3.9 million viewers

Dig a little deeper and Johnny Manziel had a positive affect for the Aggies and the SEC, while Texas was trending down. I will go into more detail on that in a later post.

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