There was more news in the CSN Houston debacle last week. And for users of U-verse, that news wasn't good -- for what it's worth, it's probably not very good news for anyone who doesn't have Comcast.
David Barron's got the story up over at the Chronicle, but in essence, the story goes like this: Jim Crane, Les Alexander and Comcast badly misjudged the market when they set their price for the network. And they so misjudged the market that the good folks at AT&T crunched the numbers and discovered just how few people really care about the Astros and Rockets:
"We're not carrying certain regional sports networks in one of our biggest markets," a AT&T spokesman's quoted as saying. "We're not carrying it, and we knew we didn't need to because the data was crystal clear about how intense those viewers were.
"We looked at not just viewership. Everybody can have access to that. We looked at how many of our customers watched zero of those games, one, two, all the way through 150 games for baseball and 80 games for the basketball team that we're talking about, and you could see that if a customer watched 30 games, pick a number, that's a pretty intense viewer, and they are really passionate and the likelihood that they are going to churn goes up.
"We could compare that against a bunch of other teams, and it was very clear that the viewership intensity in that particular market was low, and therefore we didn't need to pay the rates that were asked, and we're not."
The major stumbling block to getting the TV deal done has been the Astros, the party that purportedly set the $3.40 price point that has been the issue. The biggest issue being that this has been a number comparable to what other, higher-profile baseball teams have been getting for their regional networks. But these other networks, primarily the New York Yankees' YES Network, have been able to offer up a few things that CSN Houston has not: an in-demand team that draws big viewership numbers; a winning team with a history of high viewership; a team with a huge national following; and a programming partnership with Fox Sports Net.
CSN Houston offers none of that. There is no in-demand team that historically delivers high numbers. The Astros are not currently a winning team with a huge local, state or national following, and the team is making it known that it won't be competitive for several seasons. And the Rockets offered up a nice season, but when they don't pack the arena on a nightly basis, it's hard to argue that they're must-see TV.
The U-verse folks know this. So do the folks at DirecTV, Dish Network, Time-Warner, etc. They've seen the viewership numbers. They know that there's no number that currently exists supporting what CSN Houston has been requesting. And while it may seem ridiculous that the SEC Network already has a deal worked out with AT&T, it needs to be repeated that the SEC Network will draw huge numbers in the South and in Texas. Numbers that even a World Series Astros team would not approach because the SEC is selling its football games and football sells. Football always sells.
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SHOW ME HOW
Jim Crane stated a few weeks ago that CSN Houston is having financial difficulties. That certainly won't help the net's bargaining power. But maybe this is a good thing. Maybe it will wake up all of the folks involved in this debacle. The bargaining position's further harmed by CSN Houston not offering up a strong product. There's just no huge demand.
It's easy to make AT&T the bad guy. But the numbers support the decision it made. There's apparently been no mass defection of U-verse users to Comcast or else U-verse might have been a bit more conciliatory, and until people start leaving U-verse in droves for Comcast, U-verse will have no reason to revisit this position.
There could be an easy solution: Maybe CSN Houston just needs to lower its cost demands, request some short-term contract that gives it a chance to prove it can deliver numbers, and hope that in a few years the Astros will actually be competitive and people will be demanding to watch the games.
But there's nothing out there indicating that AT&T is softening its stance, which means no one else is either. That leaves the ever-dwindling number of Astros fans with few options. They can switch to Comcast; then can listen to the amateur-hour radio broadcast; they can find ways to illegally view the games; or they can just do like the rest of Texas is doing -- they can become Rangers fans. And much like the Astros, none of those options is much of a verdict.