March Madness and Network Neutrality
I spent a chunk of yesterday afternoon doing field research. Law professors do much too little of this, so I wanted to step up to do my part.
This means that I watched the end of the Boston College/Pacific game in the first round of the annual NCAA Men’s Basketball tournament, known around the world as March Madness. Of course, I watched the game over the Internet as part of MMOD: March Madness on Demand. No TV set required: just my computer and the bandwidth of the Law School’s network. That makes it research, and not just TV watching.
What did I learn in my visit to the field? (Oh, by the way, Boston College, predicted by some to win the tournament, won, but in double overtime.)
Two hot issues in the Picker house are March Madness and network neutrality. Start with MMOD. The basic idea is simple: online access to all of the live games. Actual implementation is more complicated. According to a background story this week in the New York Times, the system is only set up to serve 200,000 customers simultaneously. Unlike a broadcast TV signal which reaches anyone within a particular distance—independent of the number of people reached—content delivered via online bandwidth faces a much more direct constraint. (I should say that I am interested in more details on how the content is delivered, so please comment if you know more.)
To use the system, you need to register by providing some basic information, including a zip code (more on that in a second). If you registered sufficiently early, you get VIP status. Once you log in, you get placed in the online waiting room, and eventually, you get online access to all of the live games.
Not quite all, actually. The point of the required zip code is to channel viewing. You can watch online only those games not currently available in your local broadcast area. I assume that that is determined by the zip code I registered with. As the Wall Street Journal reported in a front-page story yesterday ($), major league baseball imposes the same restriction for games available online through MLB.com.
What is the point of this restriction? We discussed this at dinner the other night—televised sports + institutional design being the perfect dinner topic at my house. My 12-year old son suggested that given the limited number of viewing spots, CBS and the NCAA didn’t want slots wasted by having folks watching a game online that they could be watching instead on TV. Maximize the net value of the net access. Of course, that doesn’t address my problem yesterday: I don’t have a TV set at the office, so how do I watch my local game over the Law School’s network? (Yes, I do understand that maybe the system shouldn’t be designed to make it easy for us to watch at work, though the software does come with a “Boss button.” Click it and a dummy spreadsheet pops up to block the game window.)
My 16-year old suggested that CBS was concerned about diverting viewers from TV ads, though he noted immediately that the online version might create the possibility for even more ads. And indeed it does: not only can they deliver ads at the standard commercial breaks, but you are required to keep open a separate window that contains navigation tools to the games and, of course, ads. They still seem to be working on delivering the ads. Sometimes at TV commercial breaks, I just got a screen telling me that my game would be returning soon, other times I was stuck with a loop of AIG and Coke ads, one right after the other.
And on the ads, as the NYT story makes clear, CBS doesn’t actually expect the online access to divert many viewers from watching on TV. Instead, CBS anticipates that the people using MMOD are sufficiently hard-core that they will watch both simultaneously. And note that I wasn’t a “diverted” viewer yesterday at work either—at least not in the CBS sense!—as absent MMOD, I couldn’t have watched at all.
And the quality of the online viewing is sufficiently junky that no one would watch the local game online rather than over a readily-available TV, which suggests that the restriction isn’t really necessary but may have been put in place to placate local affiliates. Those affiliates increasingly fear that they are being bypassed as more and more content shows up online at iTunes and Google Video. (You can watch March Madness games after the fact on iTunes.)
Step back and focus on what MMOD means. Broadcasting of TV sports has typically meant regional broadcasts: Big Ten games in the Midwest, the Big East in the Northeast, etc. You watch the Bears in Chicago even if you might prefer to watch the Browns or the Jets (Doug Lichtman’s preference for example). Satellite distributors have moved beyond this with offerings such as the NFL Sunday Ticket. This plays to satellite’s advantage as its core technology requires all of the signals to be delivered to every locality, independent of actual viewer interest. MMOD eliminates geographic restrictions by making all games available to everyone, either over the net or over local TV.
MMOD is also an important form of cable bypass, meaning that CBS is able to reach viewers without having to go through the cable system. Broadcasters would very much like to re-establish direct contact with their viewers and not be beholden to the cable companies, a point I make in a prior post.
Actually, that wasn’t quite right, and that gets us to net neutrality. For most of us, we get our broadband either as DSL from the local phone company or as cable broadband from the local cable company. Network broadcasters are frustrated by the fact that their content flows through the cable TV system; the last thing they want is an intermediary. MMOD—and any other content like it that will be accessed over the Internet—faces another intermediary, either the phone company or the cable company.
I confess to not having fully-formed views on network neutrality. I don’t start from the assumption that it is obvious that only one side—consumers—should pay for the relevant pipes. And we are starting to see other ways in which we will chip away at neutrality, as Esther Dyson argues in an op-ed in today’s New York Times on fee email.
What is interesting about MMOD is the way that it quickly implements non-neutrality. I signed up early for MMOD, so I have VIP status. The site tells me that it is good to be a VIP and that has to do with the fact that only 200,000 customers can be on the system at a time. How to decide who goes first? VIPs of course.
I became a VIP by signing up early. Free this year, fee next year?