Monday, December 16, 2019

Why is streaming not economically viable? The fans need an explanation as to WHY.

While streaming services can seem simple from the customer standpoint – just loading content onto the internet – they are a separate business model that differs from the traditional model by which all regional sports networks have historically operated. Consequently, if Altitude were to provide individualized streaming options at this point it would require greatly increased prices for fans. 

Streaming games lacks the scale and efficiency that the current model of delivering content to providers such as DIRECTV provides to consumers.  That’s why the model of working with providers such as Comcast, DISH Network and DIRECTV has stayed in place since the earliest days of sports teams working with regional sports networks. 

The regional sports business was built on broad-based distribution of programming, going to the greatest possible number of households, through distributors such as DIRECTV. That is why we can deliver a streaming product through their system to their customers and our fans.  It’s also why we have in the past been able to deliver streaming to customers of Comcast and Dish Network, which have their own substantial customer bases.

We aren’t oblivious to streaming being a wave of the future. We continue to explore options for providing streaming. However, at this time we cannot provide a service to fans that wouldn’t be extremely expensive.  The current model of distribution through cable and satellite is still the most efficient manner to deliver Altitude programming, including Nuggets, Avalanche, Rapids and Mammoth games.

Why can’t Altitude stream on YouTube TV or Hulu, which have the same model as cable?

We continue to pursue potential options with YouTube TV and Hulu. However, we have been unable to reach an agreement that would provide a sufficiently broad-based distribution to make such arrangements viable.

Why should we, as fans, trust KSE and anything they have to say?

We understand Trust must be earned, and we believe we’ve done so through our record of fighting to keep prices down for our fans throughout our dispute with Comcast, which is abusing its monopoly power in the Denver region trying to prey on Denver households. Here are facts we have presented in our Complaint against Comcast:

  1. Comcast wants to raise prices for Denver sports fans who want to watch their favorite teams.
  2. Comcast continues to charge Denver households a “regional sports fee” every month even though they deny households the ability to watch the teams they’re paying Comcast to watch;
  3. If you switched from Comcast to DIRECTV to watch your teams, Comcast would charge you substantial penalties in an effort to hold you hostage.

DISH has likewise not reduced its prices for Denver households even though it, too, refuses to allow them to watch their favorite teams.

Actions always speak louder than words. Comcast and DISH Network’s actions tell you all you need to know. So do ours.

What was the package Altitude was on for the past 15 years with Comcast and DISH, and how has that changed today?

The same package model you see for a variety of national networks, such as ESPN, TNT, HGTV, Discovery, and History, is the same package model for regional sports channels. They’re distributed to a broad base of homes throughout the regions they serve. In the case of DIRECTV, that is where you will continue to find Altitude.

For our specific package, Altitude has spent the last 15 years being on the basic package for cable and satellite distributors. That is the same model that regional sports networks have operated under since these networks first came to cable and satellite providers. 

What does Comcast want from Altitude?

Comcast is demanding that Altitude be moved to a separately priced tier where consumers will be asked to pay more for the network. They’ve demanded that, even though they already have separate pricing for providing regional sports networks. Furthermore, they’re making a demand of Altitude and the fans throughout this region that they do not make for the regional sports networks that they own and operate throughout the United States. Comcast owns seven regional sports networks that they carry on their basic service in other parts of the country, but they are unwilling to provide that same opportunity to Altitude or our teams’ fans.

What does DISH want from Altitude?

DISH is also demanding that regional sports networks move to a separate tier of pricing. DISH has said these networks are too expensive to carry and that too few of their customers watch their hometown teams. That argument disregards the fact that they carry a variety of national networks that not everyone watches. DISH says it is unwilling to spread out the cost of regional sports to their entire base of customers and yet DISH refuses to let consumers choose the channels they prefer a la carte. It’s not just regional sports networks that require a broad base of distribution but also channels such as ESPN, TNT, HGTV, Discovery, History and many others – all of which require that level of distribution to survive. All of those content providers remain on DISH with the type of distribution Altitude has enjoyed for the last 15 years.

The fans would like to know more about the Comcast/Xfinity sponsorship deal. Did Altitude terminate this?

Comcast had a significant sponsorship arrangement with Pepsi Center, the Denver Nuggets, and Colorado Avalanche for several years. This season, Comcast made the demand that KSE could not promote or advertise about these carriage issues. As a result, we allowed Comcast to exit their contract. 

It’s ironic that the current dispute with Comcast centers around their claim that there isn’t enough of a broad-based audience for Altitude. For the last several years and in contradiction to their current position, Comcast made a significant investment in promoting their goods, services, and products using the arena and these same teams. And, during this period, Altitude’s ratings steadily increased.

What were the dates of our last offers with Comcast and DISH? Are negotiations still happening?

We have contacted them in the last few weeks, and both have said their positions have not changed. Comcast continues to insist on a take-it-or-leave-it deal that would drive us out of business and would make watching Altitude programming much more expensive for consumers. For that reason, we ask fans who are customers of Comcast and DISH to let your voices be heard. We continue to make every effort possible to reach agreements with both providers.

How much more are Comcast and DISH offering their own RSNs over Altitude?

Both Comcast and DISH have demanded that Altitude be moved to a more expensive tier of service as opposed to being on their basic channel lists.  That would drive down the number of households that would receive Denver Nuggets, Colorado Avalanche, Colorado Rapids, and Colorado Mammoth games. 

While DISH does not own or operate any regional sports networks, Comcast owns and operates seven. In every one of those cases, Comcast places their regional sports networks on their basic cable package. In 2017, in sworn testimony to the Federal Communications Commission, Comcast stated that the regional sports networks business model requires broad-based distribution to survive. Yet, Comcast takes the opposite position here in Denver for Altitude, a regional sports network that is not affiliated with Comcast, and for the fans of these teams.

How did we get all three carriage contracts ending at the same time/how are we in this predicament to begin with?

Altitude Sports was founded 15 years ago. At that time, carriage deals were reached in approximately the same time range. DISH Network was the first to carry the network, followed very quickly by DIRECTV and then Comcast. All those contracts were signed near the start of the Denver Nuggets season that year. Going forward, they were all renewed without any issues five years ago. 

It is understandable to wonder if the three carriers exert greater leverage on Altitude if all three contracts expire simultaneously. However, the fact that DIRECTV has reached an agreement and is currently carrying the network also speaks to the fact that Altitude Sports is equitably priced and provides content that is compelling to a great many fans throughout the region. 

The greatest leverage that remains in place is the fact that Comcast controls more than 90% of the households that have cable service in the region. They can make arbitrary decisions about the programming they carry. They can hold their customers to contracts that they have signed, believing that they would have access to their favorite sports teams. If customers wish to change service in order to move to a carrier that shows the games, they charge those customers significant cancellation fees.

What is KSE willing to do to show that they're accommodating the fans? We don't care about a couple billionaires fighting over trivial amounts (for them). Show us that you're doing something for us besides turning us on Comcast.

Here are the steps we have taken to try to help our fans while trying to persuade Comcast not to prey on Denver sports fans:

  1. We have reached an agreement with DIRECTV to continue carrying Altitude;
  2. Before reaching that agreement, Altitude provided a streaming solution to bars and restaurants that allowed fans access to these games while no agreements were in place; and
  3. Altitude bought time on Channel 20 locally to produce and provide early-season Nuggets and Avalanche games for the fans before reaching an agreement with DIRECTV.

It’s important to recognize that this question puts the burden of providing a solution solely on Altitude and KSE. We understand our fans’ frustration, and we’re trying to address the issue as quickly as possible. But hard questions need to be asked of Comcast. If you are a Comcast customer, shouldn’t Comcast honor the contract that provides you with a network and services that you have paid for and no longer receive? Shouldn’t Comcast stop charging you money for games you can’t watch? 

To us, Comcast is making “offers” it knows would put Altitude out of business – just as they would to the regional sports networks Comcast itself owns.  That’s why our Complaint points out that it’s not making the same demands of its own networks.  And that is why we could not accept Comcast’s take-it-or-leave-it offer and are challenging in court Comcast’s abuse of its market power.