Three industries provided connectable dots today. First, the FCC announced that the blackout rule — which has prevented the broadcast of NFL games in a team’s home market unless the stadium is sold out —
“has become outdated,” and will repeal it to eliminate unnecessary regulation and leave the question “to private solutions negotiated by the interested parties.” The New York Times article points out that when the rule was created, ticket sales were a large contributor to a team’s income, but today most revenue comes from television. And in 2013, only two of 256 NFL games were blacked out. Note that this doesn’t require the teams to broadcast the games that don’t sell out.
Nonetheless, the NFL “is fighting desperately to keep the FCC rule intact", filling terrifying briefs to the Commission saying “the eventual result likely would be a decrease in the amount of professional sports on broadcast television.” Meanwhile, the National Cable Television Association sensibly points out that ticket prices have a lot more to do with whether fans go to the stadium. (You’d think temperatures would matter, but half the games blacked out in 2011 were in San Diego and Tampa Bay.)
In a second skirmish, Netflix announced a deal with the Weinstein Company and IMAX Theaters to open its first original movie, the sequel to Crouching Tiger, Hidden Dragon, simultaneously on Netflix and in IMAX theaters. The Weinstein Company has already agreed to make Netflix it’s exclusive U.S. subscription TV service for its first-run films stating in 2016. These moves attack the “windowing” paradigm of studios releasing films to theaters exclusively for three months. Netflix, of course, already challenged television’s release model when it offered the entire season of House of Cards at once, arguing that their approach fit consumers’ wishes to binge. “What I am hoping is that it will be a proof point that the sky doesn’t fall,” said Netflix Content Officer TED Sarandos. “These are two different experiences, like going to a football game and watching a football game on TV.” Hmmn.
In this performance, the role of the monopolist will be played by the three dominant theater chains. Regal Entertainment, AMC Entertainment, and Cinemark, “have aggressively opposed any encroachment on their release window, maintaing that any shortening would encourage consumers to stay home,” according to one report. “Regal..has wasted no time in slamming” the deal, and AMC will “boycott” the movie, and its “parent company Wanda may not carry it in China,” according to The Hollywood Reporter. “‘No one has approached us to license this made-for-video sequel in the US or China, so one must assume the screens Imax committed are in science centers and aquariums,' AMC said in a terse statement.” Terse doesn’t quite cover referring to a movie with a budget of ten times the original Crouching Tiger’s $23 million as “made for video.” And, umm, Imax. The Reporterheadline was “Major Blow for Netflix, Imax,” by the way, apparently taking little interest in the customers or industry evolution.
Today's final threat to life as we know it is United Airlines’ decision to include the ability to book Uber through it’s smartphone app. The marketing director for the Greater Orlando Aviation Authority told United’s VP for Marketing that “a lot of airports…are against Uber, because the drivers are not vetted and not regulated,” displaying more faith in the local Hack Bureau than crowdsourced reviews. United “want[s] to provide functionality. Our customers want it. They told us they like it and they’re using the product.” Weird, right?
So, the answer to “Who’s More Progressive” is none of them — in each case the owners of the “bottleneck facility,” as we used to call the RBOCs back in the day, are protecting their ability to collect economic rents, while United, Weinstein, Netflix and the FCC have the customer's back. The NFL, theater moguls, and airports seem unconcerned with whether they are actually creating value for anyone but themselves. How many times do we have to see this movie? Oh, I mean video. – CAM