No Tug of War Between Live and Broadcast

If an event is compelling, it will drive more interest in the live product. If the live product is done well (if the in-stadium experience is good, for example), that will drive interest on the part of ticket buyers to both watch broadcasts and come back to the stadium.

If the live product is done well (if the in-stadium experience is good, for example), fans will both watch broadcasts and come to the stadium. Photo Credit: “Go Giants,” © 2010 Art Siegel, used under a Creative Commons Attribution-NonCommercial license.

I’ve noticed a number of writers and observers falling prey to the understandable but wrong fallacy of seeing live and broadcast versions of the same event as competitive to each other.

Most recently, Miami Attorney and sports blogger Darren Heitner pitches the relationship between live and broadcast sports as “the biggest rivalry of 2014.” He sees a tug of war between the watching of sports on TV and attending it in person. On the surface, it makes sense, in that if you want to witness a game, you have a choice between watching it on TV and going to the event itself. In his defense, this is a mistake that a lot of people make. We’ve even talked about it recently in connection to NFL’s terrible Blackout Rule.

It seems straightforward in concept, but it’s just not true that the two forms are in conflict. Broadcast and live work together when an event is strong, and each of them has strengths and flaws. Broadcast has reach and convenience, but it’s a fairly forgettable, limited experience. Live is inconvenient and expensive (compared to TV viewing), but people enjoy it much, much more and pay more for it. That makes it a tremendous lever for permanent emotional connection between the person who comes to the event and the event or team. Of course, TV has unlimited potential scale, and the rise of ESPN and the other sports networks, more sophisticated revenue models for broadcasting and a general rise in interest in sports have made broadcasting the more important part of the revenue picture for most sports.

Darren’s also right that if the live experience isn’t good and the consumer’s expectations are high, the difference between the two experiences can blur.

But let’s go back a little to the dynamics of each form. The first thing that needs to be stipulated is this: Free and immediately available will ALWAYS win out over expensive, distant and inconvenient as far as the number of people who choose it. It’s called the First Law of Economics. More people will consistently choose a less satisfying thing or an inferior substitute if it’s free and within arm’s reach.

In this case, the live event is the “superior” product, and where no more than tens of thousands can choose to go to a game in person, unlimited millions can choose to watch it on TV. That’s the nature of the two different forms. Of course, the value of the person going to the game is way, way higher. Would you pay $310 to watch a playoff game on your own TV? That was the average price for the Philadelphia Eagles playoff tickets in the first weekend of playoffs this year.

Hell no. Of course you wouldn’t. You might pay $50, like a pay-per-view event, but you’d expect several people to watch with you for that price. You wouldn’t pay $50 per person to watch at home. It’s an “inferior” product, and you know it by how much you’d pay for it. Your preference is for the lower cost and greater convenience, not the experience itself.

Why is Heitner surprised that the Colts hadn’t sold out their playoff game five days before kickoff? Because he expects, rightly, for there to be a LOT of people willing to spend a LOT of money to see it in person. (By the way, his expectation was correct. The game was sold out.)

We assume, confidently,  that many, many people will shell out big money to see a game in person because we know the product is the “deluxe” version of watching it at home.

So when this assumption fails, when ticket sales for some game or show don’t rise to those expectations, this is given as evidence of the struggles of the live medium. Interestingly, lousy TV ratings never get mentioned. Darren points out that the Hawaii Bowl struggled to sell tickets, but it wasn’t exactly lighting up TV sets around the country either. Bowl games, as I have said, outside of the biggies are second-rate product in any medium. Most of the lower-tier bowl games, which really shouldn’t exist, struggle to get a 1.0 TV rating, which makes it barely worth broadcasting.

But it’s easier to see a stadium that isn’t sold out than it is to see people NOT watching something on TV.

Let’s push this further, when TV isn’t just crummy but embarrassing. He mentions the Miami Marlins discounting tickets through Groupon, and  the team’s struggles with attendance are well-documented. This is evidence, in his view, for the decline of the live medium. But let’s look at all the data when declaring broadcast the winner: Sometimes more people buy tickets to the Marlins than watch them on TV. Average attendance for the season was just 19,000 people, which is low for baseball.  TV ratings for the games were not just low, they sometimes actually represented FEWER people watching at home for free than paying to be there. On at least a few occasions, Marlins ratings dipped well below 1.0 in the Miami market, translating into 12,969 televisions tuned in.

We even had an instance of a 0.0 rating for a Houston Astros game, where technically, though probably not in reality, the number would indicate that nobody — NOBODY — was watching the game.

The amount of people who showed up, and paid actual money, to see it in person was 26,168 though. If I applied the same logic to the broadcast of baseball as Darren applies to the sale of tickets, I would be writing about the collapse of broadcast sports!

Here’s how this really works: Broadcasting an event is a multiplier on that event. It increases the exposure of that event to the world. If that event is not interesting, it won’t help much. Many people, if given the choice, will watch the broadcast because it’s easier and cheaper. If, however, the event itself is compelling, it will drive more interest in the live product. If the live product is done well (if the in-stadium experience is good, for example), that will drive interest on the part of ticket buyers to BOTH watch broadcasts AND come back to the stadium.

When an organization neglects the in-stadium experience, as I believe the NFL is doing now, attendance will suffer. If the product itself is lousy, as probably 20 or 25 of these 35 bowl games truly are, attendance will be unimpressive. You’ll see empty seats on TV.

Then again, you probably won’t be watching on TV either.

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