As the start of the baseball season approaches, the current impasse between the Padres content provider, Fox Sports San Diego, and Time Warner Cable is still woefully stalled. Public outrage has been constant, although somewhat muted. This dispute has been a carry over from the 2012 season, when Padres games were conspicuously missing from the Time Warner Cable telecasts. It seems disheartening that yet another season can be lost due to business issues, but that is a real possibility in a dispute without any true leverage to force a solution. It happened last year, it can happen again. San Diegans are in general, easy going due to the fine weather. Perhaps it time to put on the rally caps and get some momentum and hard emotions going here.
The cause however, has not fallen upon deaf ears, as several City Council members, including Sherri Lightner as well as San Diego Mayor Bob Filner have played a role in trying to help sort out the mess. Although the City’s power is limited in terms of what they can directly do – they can apply pressure and bring attention to the issues in a public forum. The Mayor has sent up an e-mail account, for any type of outreach desired – constructive, inquisitive, and even the vent frustration type at firstname.lastname@example.org.
So what are some of the issues at hand, and what is publicly known about the matter? As stated before, one company, Fox Sports San Diego, is the content provider that has rights to the Padres games. It is similar to any other media company having the rights to content or a show like Dancing with the Stars, or Survivor. The cable company, or Time Warner, is the distributor and has the direct relationship with the end customer. Time Warner has deals with various content providers and can package and the sell the content to the end user.
Time Warner services about 22 percent of San Diego exclusively in San Diego North County area, which is another way to say monopoly. Satellite providers are an option for homes, but there are transactions costs involved, and in business it is well known that the status quo has momentum. It takes a lot to force a change at the customer level. A story about Netflix, for example that demonstrates the power of the status quo, was that they had a lot of “shadow” customers that were continuing to pay the monthly subscription fees without or barely using the service. Basically, people were continuing to pay money for something they didn’t need or use, simply because they had started doing it at one point. However, when Netflix made an unpopular attempt to split the company between the streaming and dvd services, that woke up a lot of these customers, made them realize they didn’t want to keep paying, and triggered them to cancel service. Essentially, people keep going with what they have unless something important comes up that causes a change. It is only human.
Through the mediation of the City, Fox Sports San Diego has been able to establish that it has given the same deal to four out of the five major TV providers in San Diego. It has offered the same deal to Time Warner, which has countered that this offer is higher than the previous deal with Channel 4 Padres, and thus is not in the best interests of the company to accept. Time Warner Cable is also countering with market research that implies that San Diegans are not willing to pay extra to watch the Padres on top of their existing cable packages. In the game of baseball, Time Warner wants to play hardball.
July 21, 2012; San Diego, CA, USA; Fox TV analyst Mark Grant (right) interviews San Diego Padres right fielder Chris Denorfia (left) before a game against the Colorado Rockies at PETCO Park. Mandatory Credit: Jake Roth-USA TODAY Sports
At this current time, it is the dollars that is pushing Time Warner’s hand. It just doesn’t have any incentive, to agree to pay Fox Sports San Diego extra money to show the Padres. It would rather not pay Fox Sports San Diego, not show the Padres, and collect the existing fees it has from its customer base. This course of action, maximizes money from Time Warner’s perspective, which is rationally optimal. However, it is playing a dangerous game of creating frustration and slowly destroying good will. People are now starting to ask, well can we take away this monopoly? Ironically, before this dispute, Time Warner was probably flying under the radar over this extremely advantageous situation. The question I’m interested in asking now, is if this exclusive North County provider status can be changed. I mean, why not? Add a little bit of heat to the Time Warner party line.
As for the end users, and the customers that have been dragged into this situation, there are other options available. It is possible, although at extra cost, to use the internet to sign up for streaming content, such as MLB TV, to watch the games. It is a choice that is available for those that feel deeply upset over the sense of helplessness that the impasse is causing and need to do something. Another socially inclined option, would be to go a local restaurant or sports bar and catch the games you want to see. Personally, I hate being left without options, which is why I prefer to think about other pathways to pursue.
However, for the long-term, a solution has to be made. As a blogger, and as a concerned North County resident within the Time Warner jurisdiction, all I can do is also just bring attention to the issue. Don’t let people forget if there is some wrong that is being done. Time Warner, we are watching you.