MLB Keeps Its Postseason Thrills from the Millennial Fans It Covets
Major League Baseball's postseason is mostly on pay TV, but that could be costing the sport its future fans: cord-cutting Millennials.
Denny Medley-USA TODAY Sports
October in America means Major League Baseball's playoffs, the grand drama of the national pastime working toward its thrilling conclusion. It means fans huddling around televisions to watch Jose Bautista do stuff like this—that is, assuming those fans have subscriptions and authentications from participating pay TV providers.
This year, every single MLB postseason game from the Wild Card and Divisional Series were on pay TV, and only one game of the championship series round, last Friday's ALCS Game 1, was broadcast over the air. Ever since TBS won the rights to both league's divisional rounds in 2007, the division series round has been a cable affair, and with the emergence of Fox Sports 1 two years ago, a majority of championship series games have followed suit.
In the long run, this may not be a good idea.
MLB and its commissioner, Rob Manfred, have made grand statements about expanding from baseball's predominantly white, male, and aging fan base to reach younger and more diverse viewers. Yet by restricting the playoffs almost exclusively to pay TV, the sport is putting its best product where those young and more diverse viewers are least likely to find it. Rather than connect with a new generation of fans—who are more likely to be cable cord-cutters—the league appears to value its existing business relationships with cable companies and sports networks.
In MLB's defense, the league is not making the playoffs broadly inaccessible. About 83 percent of households still subscribe to cable TV; over 70 percent of American households with televisions receive both Fox Sports 1 and TBS; and just over 60 percent receive MLB Network as of February 2015.
Dig deeper into the numbers, however, and something else becomes clear: cable is slowly dying. Over the past two years, roughly two million people have dropped pay TV; in the second quarter of this year alone, cable lost 600,000 subscribers, the biggest drop of any three-month period in industry history. Executives of pay TV providers like AT&T (owner of DirecTV) and Dish Network expect cord-cutting to continue at its current pace for the foreseeable future, as USA TODAY reported in August.
Leading the charge? Millennials, particularly "cord-nevers": young people and families who are starting households without pay TV and never intend to subscribe, thanks to Netflix, HBO Go, and other streaming options. "New households are being formed precisely by the Millennials that least likely subscribe to Pay TV," analysts at MoffettNathanson reported to investors earlier this year. According to Nielsen, nearly four million fewer young adults—in the vaunted 18-to-34 demographic—are watching live television than they were in 2011, and usage rates dropped 10.6 percent among young adults between last September and this January. Millennials are 1.8 times more likely to belong to the "cord-never" categories than the average person and 1.7 times more likely to be a cord-cutter.
Back to Manfred. When he took over as commissioner from Bud Selig, he wrote in a letter to fans that "this notion that baseball is the game of children is central to my core goals as Commissioner," and, "My top priority is to bring more people into our game—at all levels and from all communities." And there's the problem. Leaning into pay TV potentially restricts baseball's audience—which already has a median age of 55—to older and richer viewers at the expense of the very people Manfred wants to bring under MLB's tent.
What gives? In the short term, MLB is following the money. Rights fees have become a massive revenue stream for teams who have recently renewed contracts with regional sports networks like the Dodgers (25 years, $8.35 billion from Time Warner), Rangers (20 years, $3 billion from FOX Sports Southwest), and Angels (20 years, $3 billion from FOX Sports West). Dave Warner, of WhatYouPayForSports.com, told VICE Sports an in email, "This year alone, Fox agreed to a 15-year, $1 billion deal with the St. Louis Cardinals and a 20-year, $1.5 billion deal with the Arizona Diamondbacks. Thanks to MLB's revenue-sharing model, 34 percent of that money goes into a pool shared by every team in the league. So you would imagine MLB having a certain loyalty to FOX."
"The media agreements between MLB and FOX, Turner and ESPN determine which networks air the postseason games," Matt Bourne, the league's vice-president of business public relations, wrote in an email. Bourne also denied that MLB's playoff broadcasts are arranged, as some have alleged, to induce fans to subscribe to pay TV in general or regional sports networks specifically. "We have reached agreements with the networks that have the most robust sports offerings and have shown the greatest interest in airing postseason games. This arrangement is very similar to how professional sports leagues and major college sports handle their playoffs."
As for cord cutters?
"While the media landscape is evolving rapidly," Bourne wrote, "I expect cord cutters understand that their choice means they won't receive all of the same content that is available to cable or satellite television subscribers."
This much is true. There are few (legal) options for cord cutters who want to watch the MLB playoffs. Streaming options can help, but Dish Network's streaming service Sling TV (priced at $20 per month) lacks a contract with FOX, and there is no other over-the-internet option carrying FOX Sports 1. Contracts among various programming providers can complicate matters even more. During the division series round of the playoffs, for example, Los Angeles native Seth Victor tweeted, "I am a Comcast subscriber to MLBN, but I couldn't watch the MLBN games because they don't have a contract to stream on mobile." He that added his building is pre-wired for Comcast, which holds a virtual monopoly in Victor's area. "I believe AT&T is available, but everyone uses Comcast," he said.
Even for baseball fans who do have the credentials to access the streams—like young pay TV subscribers who watch games on their phones and tablets, because they're, you know, young—issues of poor quality, skipping streams, and an inability to log in have inadvertently blacked out some viewers and have pushed others to use pirate streaming sites. "FSGo [Fox Sports's streaming service] has been utter crap for me," Washington, DC, resident Craig Goldstein tweeted last Monday. "Constantly cutting out and falling minutes behind."
A knowledgeable employee at a major broadcast company, who spoke to VICE Sports on the condition of anonymity, said that the technical problems aren't easy to overcome. Take lag, which can resulting in delays of a minute or two between the television feed—an eternity for anybody watching a game with Twitter open, or in apartment buildings where screams from the cable subscribers down the hall can spoil the game for streamers. The process of repurposing a television broadcast for the internet is relatively new. "It's not easy to do," the employee said. "You take a TV signal and encode it into digital, that takes time."
Moreover, while broadcast networks own game streams, "the pay TV provider has the customer data, we don't." So if an authentication issue occurs at either side, or with a middleman like Adobe Pass, the user is left with a dead stream. Ty Hildenbrandt, a subscriber to Eastern Pennsylvania cable company Service Electric, said he had problems getting his perfectly acceptable credentials recognized. "The login mechanism also seems to have a hard time figuring out my location," Hildenbrandt told VICE Sports over email. "So, sometimes I'll login and it'll work, but other times I'll login and nothing will happen at all, or it will tell me I'm ineligible. Again, very frustrating."
Thing is, frustration isn't inevitable. Baseball could provide better playoff streaming options right now, if it chose to do so. After all, MLB Advanced Media (MLBAM), the league's digital arm, is widely recognized as the best in the industry at what they do. "Their technical chops are the best, bar none," streaming industry analyst Dan Rayburn told the Verge in August. "They set the standard." For proof, just look at all the media companies turning to MLBAM to run their streaming services: Sony, ESPN, WWE, Glenn Beck's The Blaze, and, most notably, HBONow.
"MLB isn't exactly a luddite organization. They have popular mobile phone apps. They have a streaming service," Warner wrote. "They support Roku, Fire TV, Apple TV and Chromecast. If there's a future without cable, MLB is probably better prepared for it than some other leagues. On the other hand, that future probably won't get here before the 2021 World Series, when the current national TV deals expire. The TV market might look a lot different then, but it has to get there first."
Therein lies the rub: current postseason streaming services are meant as complements to a cable TV subscription, not replacements. They simply aren't a priority. "The whole point is it allows you to watch while you're away from a 50-inch screen," the broadcast company employee said. Until MLB's current pay TV contracts expire—or unless cord-cutting reaches a critical mass and pops the sports world's bubble of ever-escalating television contracts in favor of streaming and over-the-top distribution—cord-cutting baseball fans and cable subscribers who want to catch the ALCS on their iPad will remain a second-class spectating citizen.
For now, that may make economic sense. Baseball's revenues have never been healthier, and pay TV is where the current big money is. Still, it's hard not to wonder if the sport is shortsightedly devouring its seed corn. By placing its most thrilling moments out of sight—at least to the very people it most seeks to court, the young people who presumably will one day be its future fan base—baseball is placing itself out of mind. For everyone who saw it, Bautista's epic series-winning home run and bat flip was a moment they won't soon forget; for everyone without a pay TV subscription or stuck with a busted stream—or everyone who never had a chance to stumble across baseball at its best and perhaps become a fan—it was something they may have missed while watching Game of Thrones or House of Cards.
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