Now more than ever, MLB must strongly consider retooling their broadcasting blackout agreements. These blackouts whether they are regional (based on national TV agreements) or local (related to Regional Sports Networks) prevent fans from viewing select teams. These blackout “maps” are primarily based on an individual's viewing zip code and proximity to “local” teams. One misconception is that the League is at fault for these blackouts which only is true of National TV deals. Regional Sports Networks are bilateral agreements between local media networks and individual teams for exclusive regional broadcasting rights. In order to remedy the current situation, MLB may need to make some concessions in order to incentivize teams to relax these exclusive deals and reduce blackouts. Historically, the two workarounds centered around paying for cable subscriptions which included the RSN’s or illegally manipulating one’s IP address to stream “in-market” games. “As we all know, millions of Americans are cutting cable and turning to streaming services. In fact, according to FastCompany, from February ’19 to February ’20, paid TV subscriptions dropped by 2.7 million.” This trend is likely to continue as consumers are becoming more comfortable cutting traditional cable packages in favor of a more diverse streaming package from several providers. With this trend, more consumers will be without the ability to watch their local teams and MLB will need to react and create a strategy going forward to sustain viewership.
The most egregious example of the blackout issues is for the unlucky fans in Iowa. Based on their specific geography and zip code they are blacked out from viewing 6 teams!
These rules also affect Canada’s sole team, the Toronto Blue Jays, and their fans across The Great White North. Rogers's “regional” sports network deal spans to blackout all of Canada from streaming on the league-owned platform MLB.TV. For fans across Canada, their only option to stream the Blue Jays comes from purchasing a Rogers Cable subscription.
These issues will persist and cannot be ignored by MLB for much longer if they hope to gain viewership and hopefully lifelong fans. “If a team or sport makes watching its games more difficult (or expensive, when it comes to signing up for two streaming services), fans will more than likely move on to something else. There are too many entertainment options available now. Leisure time seems increasingly at a premium.”
MLB has two courses of action going forward:
- Keep current blackout rules in force and protect RSN’s
- Most advantageous short term profit decision but the trend of fans leaving cable subscriptions will negatively impact long term viewership
- Negotiate with MLB teams and RSN’s to gradually lift exclusive in-market streaming rights
- Concessions by all parties will need to be made as RSN’s main source of revenue is derived from exclusive in market access
- Most beneficial long term decision for MLB to remove barriers to entry for viewership