SBJ/June 20-26, 2011/Media

NBA-Turner’s Nielsen move pays off

Now rated, NBA TV beats expectations for ad revenue, viewership

Turner’s David Levy was sitting in NBA Commissioner David Stern’s office last spring when he delivered a simple message: NBA TV needed to be rated by Nielsen in order to increase ad sales around the NBA’s digital properties.

Since Turner started to operate the NBA’s digital properties in the fall of 2008, it was finding it difficult to attract big-time advertisers that weren’t already the league’s official partners to the network. Those advertisers were not interested in NBA TV unless it had official ratings from Nielsen that would show the audience size potentially watching its ads.

Stern wanted to make sure the league’s network would have enough distribution before making NBA TV’s numbers public.
Levy also stressed that rating the network would help identify the strengths and weaknesses of the channel based on viewership patterns. But his main point: Nielsen ratings would lead to more advertising.

Stern agreed and, later, he gathered NBA Digital executives in a room at the NBA’s Manhattan offices and asked who thought it was a bad idea to make NBA TV a Nielsen-rated network.
  HOOP TRENDS

The following lists the prime-time viewership of NBA TV during the weeks of March 28 through May 30.


  March 28                              152,000
  April 4                                   166,000
  April 11                                   93,000
  April 18                                 188,000
  April 25                                 271,000
  May 2                                     41,000
  May 9                                     55,000
  May 16                                   60,000
  May 23                                   49,000
  May 30                                   49,000

What stands out:
    Though NBA TV averaged 253,000 viewers over 96 regular-season games, prime-time viewership from the end of March through the end of May was down from the network’s regular-season game average as the bulk of postseason games were aired on TNT, ESPN and ABC.
    Viewership spiked during the first round of the playoffs during the last two weeks of April, as it carried several live games. After NBA TV’s live game programming ended in April, however, prime-time viewership declined sharply.

Source: Austin Karp, SportsBusiness Daily


Nobody raised a hand, and Stern went with it.

Turner sat down to negotiate financial terms of having NBA TV become a rated network with Nielsen, and it was able to leverage its other networks, like TNT and TBS, into a deal with Nielsen. It’s not known how much the Nielsen deal was worth, but cost was an issue. A league official said it was not an insignificant amount.

The network officially became rated last November. And after a staggeringly successful NBA 2010-11 season capped off by the Dallas Mavericks defeating the Miami Heat for their first NBA title, NBA TV’s decision to avail itself to Nielsen’s rating system is paying off with advertising revenue and viewership exceeding leaguewide expectations.

“The number of viewers was higher than frankly we had expected,” said Bill Koenig, executive vice president of business affairs and general counsel for the NBA. “We thought we could really get to the next level in terms of ad sales and were absolutely right. We appeal to a much broader array [of advertisers] than we expected.”

Viewer numbers aren’t breaking any records and are small by broadcast standards. But Turner and league executives are happy with the 253,000 viewers that NBA TV averaged over 96 regular-season games this season, believing the viewing patterns have been steady.

But executives are more pleased by the channel’s viewer numbers on Tuesday nights, when fans vote on the game NBA TV will show. Those “Fan Night” games averaged 401,000 viewers for 22 games, a 58 percent increase from its other nights and frequently outdrawing competition on better distributed channels like ESPN2 and Versus.

The Tuesday night numbers showed Turner and NBA executives that fans were able to find games on NBA TV.

But the numbers also show that viewership plummeted when NBA TV stopped carrying live games during the playoffs. In the week of April 25, for example, it averaged 271,000 viewers in prime time, paced by an April 27 Grizzlies-Spurs game that averaged 835,000 viewers. The next week, NBA TV had no live game programming and its prime-time average fell to 41,000 viewers. The channel’s most viewed prime-time show that week: a May 5 edition of “NBA Action” that drew 137,000 viewers.

For the month of May, when NBA TV stopped showing live games, its prime-time viewing average fell below 100,000 viewers to 96,000. During the week of June 6, the last week of the postseason, NBA TV’s prime-time numbers fell even further: Its prime-time average fell to just 56,000, despite an NBA Finals postgame show on June 12 that drew 373,000 viewers after the Mavericks clinched the series against the Heat.

Where they stand:

A look at league-owned networks


NFL NETWORK
Launch Date: November 2003
Distribution: 56,846,000 homes*
Faces of the Network: Rich Eisen, Steve Mariucci, Warren Sapp
Room for Growth: NFL Network does not have carriage deals with three of the biggest cable operators: Time Warner Cable, Charter and Cablevision.
Red Alert: NFL Network carries eight regular-season games, which is its most viewed programming. The NFL in September 2009 launched a companion channel, the heavily praised NFL RedZone, which shows all the scoring plays during weekend games.
 
MLB NETWORK
Launch Date: January 2009
Distribution: 56,231,000 homes*
Faces of the network: Bob Costas, Matt Vasgersian, Harold Reynolds
Leadoff Batter: MLB Network engineered the most successful launch in cable history, going out to 50 million homes initially. MLB was the first league to successfully tie network carriage to its out-of-market package, Extra Innings.
First Class Package: MLB Network’s on-air and executive talent pool is particularly deep. The league poached well-respected TV industry veteran Tony Petitti from CBS to run the channel. The channel has won six Sports Emmy awards in its two years.
 
NBA TV
Launch Date: November 1999
Distribution: 55,567,000 homes*
Faces of the Network: Ernie Johnson, Kevin McHale, Chris Webber
Turn the Tables: As part of its rights deal in 2008, Turner took over the management of NBA TV and moved its operations from New Jersey to Atlanta. Several of TNT’s well-known NBA talent now appear on NBA TV.
Don’t Tier Me: Taking a page from MLB Network, NBA TV engineered a move off of cable’s sports tiers by tying better carriage terms to the league’s out-of-market package. The move helped NBA TV’s distribution nearly quadruple.
 
NHL NETWORK
Launch Date: October 2007
Distribution: Not known**
Faces of the Network: Kevin Weekes, Mike Johnson
Blue Liner: As part of the league’s most recent media rights deal, NBC Sports Group has agreed to build a new studio for NHL Network in Stamford, Conn. The new studio should help improve the on-air quality of the network and give the channel that started in Canada a more distinctly American feel.
Rushing the Zone: The NHL seems committed to improving the network’s quality and position in the cable industry. The league hired David Proper late last year to help drive distribution of the channel. Two months earlier it hired Charles Coplin to oversee content. In January, it hired Mark Preisler from ESPN as executive producer.


* Source: The Nielsen Co.
** NFL Network, MLB Network and NBA TV are rated by Nielsen; NHL Network is not.
Compiled by John Ourand and John Lombardo

Generally, NBA TV has found that game programming and studio programming — which uses a lot of Turner on-air talent — has drawn good ratings. During the playoffs, NBA TV aired 1,500 hours of pregame and postgame programming, up slightly from the 2009-10 season.

But outside of studio or live game programming, including lifestyle shows and game replays, the network rarely attracts more than 100,000 viewers. That’s where Turner executives say there’s further opportunity to increase viewership.

Still, the average ratings are steady and have translated into more ad dollars. Turner says ad revenue doubled this season, though NBA Digital executives refused to disclose specific revenue figures.

NBA TV added 75 new advertisers this season, widening its list far beyond the league’s corporate partners.

The top five advertising categories this season on NBA TV were motion pictures/film studios, computer/electronics, auto, beer and wine, and video games.

“It was a good time for this call [to rate the network] and we hope the momentum will continue,” said Jon Diament, executive vice president of advertising sales and marketing for Turner Sports.

Now that it is Nielsen-rated, Diament says he’s better able to package NBA TV with NBA.com and TNT’s NBA telecasts, which also has helped sales on the channel.

“[Getting NBA TV rated] was the final piece of the puzzle,” said Bryan Perez, senior vice president and general manager of NBA Digital. “We were able to deliver metrics to advertisers on the Internet and mobile. But [getting rated] powers the cross-platform advertising message.”

The rating also gave ad buyers data to negotiate rates.

“What the rating does for them is to give them legitimacy,” said Hank Cohen, chief executive officer of KSL Media. “They produce a good program and ad buyers need a measurement tool to negotiate.”

The first league-owned network, NBA TV launched in 1999 as NBA.com TV, looking to marry the elements of television with the promise of the Internet. Its programming lineup mirrored its name: The channel had the look and feel of the Internet on TV.

But from studios in Secaucus, N.J., NBA TV’s production values and programming lineup were underwhelming and the network failed to gain traction with audiences or distributors.

Distributors noticed an immediate change when Turner took over NBA TV’s operations and moved them to Atlanta in 2008.

“We think NBA TV continues to improve and appeal to the part of our customer base that are true basketball fans,” said DirecTV’s Derek Chang.

Distribution growth since Turner took over has been impressive. Two years ago, when Turner started operating the NBA’s digital businesses, NBA TV was in just 15 million homes. Today, that number has skyrocketed to 56 million, just below NFL Network and MLB Network.

Fueling NBA TV’s distribution increase was the league’s decision in 2009 to move the channel from sports tiers onto basic tiers. Taking a page from MLB, the league started tying carriage of its out-of-market League Pass package with the move to basic tiers.

While it has deals with the top three cable operators and both satellite platforms, a hole still exists in NBA TV’s distribution structure. It has yet to strike a deal with the fourth-biggest cable operator Charter, which has 4.5 million subscribers.

“There is room on the basic tier to grow,” said Koenig, who leads NBA Digital’s distribution negotiations. “There are smaller distributors that you have to pound the pavement to hit. We are growing over time.”

But the growth and momentum of NBA TV could come to a screeching halt should the NBA lose games to a lockout after the current collective-bargaining agreement expires June 30. Network executives are finalizing contingency plans for any games lost next season to a lockout, but refused to disclose specifics.

“We are focused on bargaining and it is a little too early to tell what we will do next fall if there are any games missed,” Koenig said. “Right now, the focus is on getting a deal done.”

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