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Message: [QUOTE="nzm136, post: 3497042, member: 2531"] I get what you’re saying. I just disagree with what I think is your basic premise, which is that being in NYC/DMV is a goldmine for the BTN because of the huge amount of cable boxes. Most people see the huge populations and argue that Price x Quantity = Revenue. Therefore adding those schools skyrockets revenue, as the Q part of the equation goes through the roof. My belief is that the above is only simplistic. Prices are set through supply and demand. The per school supply of content is reasonably fixed. (I think per school supply is the relevant variable, as the end revenue will be equally divided up by the schools in the conference.) RU athletics, however, doesn’t generate demand. That combination of stable per unit supply and decreased per unit demand means the price decreases. Then the calculation becomes lower carriage fee x more subscribers = new revenue The carriage rate is really a weighted average of expected demand. The cable company has to agree to pay the network the rate, but the cable company is just the middle man. It will only agree to pay the network if it thinks that it can pass the cost on to consumers. Otherwise it would be willingly agreeing to lose money, which isn’t likely in an arm’s length transaction. Given that RU was coming from a conference with a very low TV payout, there’s a very strong reason to believe that my suspicious are correct that they do not inspire a strong demand for their product in NYC. Otherwise, the BIG EAST/AAC would have been able to cash in on it (and their attendance wouldn’t be terrible). The other way networks make money is through advertising, but again, advertisers will only pay what the exposure is worth to them. That amount is more or less “viewers * increased likelihood of purchase * margin.” “Increases likelihood of purchase“ and “margin“ are mostly in the advertiser’s hands, but the “viewers” variable is the responsibility of the network. Since few people watch RU athletics, they don’t generate much revenue on that front, either. Hopefully the above debunks the myth that RU was a good add for growing BTN revenue. It wasn’t. It was a good add for protecting BTN revenue because it kept Penn State in the conference. [/QUOTE]

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