In Demand and cable operators have scored a major coup in their battle with DirecTV Inc. for sports content, acquiring a groundbreaking multichannel pay-per-view package from the National Association for Stock Car Auto Racing (NASCAR).
The "NASCAR In Car on In Demand" package — set to be announced this week — will offer motorsports fans seven dedicated PPV channels that feature in-car cameras, live team communications and real-time race car statistics displayed on animated dashboards.
Unlike other high-profile sports pay-per-view packages, which have been the purview of direct-broadcast satellite provider DirecTV, the NASCAR service will be exclusive to 12.5 million digital-cable subscribers beginning in June, In Demand executive vice president Rob Jacobson said.
"The package helps cable affiliates in their quest to compete with satellite, drive digital-cable boxes and eradicate digital churn," Jacobson said.
The three-year deal is a major breakthrough for cable. Since the mid-1990s, the industry has watched from the sidelines as DirecTV siphoned sports fans away through out-of-market packages from the National Football League, Major League Baseball, the National Basketball Association and the National Hockey League.
While In Demand also acquired the rights to "NBA League Pass," "MLB Extra Innings" and "NHL Center Ice" for its digital-cable subscribers, it has yet to generate the same revenue returns from those packages as DirecTV has enjoyed.
And cable has yet to secure rights to "NFL Sunday Ticket" — arguably the most popular package — which generated an estimated 232 million in 2001, according to Carmel Group.
But with the NASCAR In Car on In Demand package, cable aligns itself with one of the hottest sports properties in the country. NASCAR boasts that it's the second-most popular sport on television, behind pro football, and that it attracts more than 75 million adult fans.
The sport's growing popularity was reflected in a six-year, $2.8 billion rights deal signed in 2000 that includes telecasts on the Fox broadcast network, FX, Fox Sports Net, NBC and Turner Network Television.
It's one of the few sports that has experienced a year-to-year increase in TV ratings. For example, last month FX set a network NASCAR ratings record with a 2.0 mark for its March 3 coverage of the Busch Series 300 from Las Vegas.
The race beat FX's inaugural Busch coverage from Rockingham, N.C., on Feb. 24, 2001 (which scored a 1.8 household rating) by 11 percent.
"There's a phenomenon associated with NASCAR, and given the passion for the sport — illustrated by the television audience and the live attendance — we think the enthusiasm for the package will be terrific," Jacobson said.
The stock-car circuit talked to both major DBS providers — DirecTV and EchoStar Communications Corp. — about distributing the package, said NASCAR vice president of broadcasting Paul Brooks, "but [we] were not able to work out an agreement." He would not provide specific details.
Interactive-media provider ACTV Inc. will produce NASCAR In Car on In Demand each week, beginning with the Michigan 400 race on June 16.
DOVETAILS CABLE NETS
In Demand and NASCAR Digital Entertainment will serve as executive producers, while another firm, Sportsvision, will provide on-screen enhancements, Jacobson said.
The package will complement weekly live NASCAR coverage on broadcast networks Fox and NBC and cable networks FX and TNT.
In fact, one of the seven PPV channels dedicated to the package will offer a simulcast of the televised race, including commercials.
"The network partners have been very supportive," said Brooks. "Their core broadcast is integrated in the package. The package is structured so that it enhances their coverage and allows the fan to move around as they desire."
Five additional channels will display images from dedicated in-car cameras, including a real-time animated dashboard that shows needles, gauges and information such as the driver's name, his car's position in the race and the vehicle's engine revolutions per minute (RPMs).
Each in-car channel will include a mix of the driver's voice and team communications. The seventh channel will feature additional event information and in-car camera perspectives, said In Demand.
"It will offer a terrific viewing experience for the viewer who purchases the package — it's almost like you're in a video game," Jacobson said. "For a NASCAR enthusiast, it's a must-have."
Added Brooks, "Our fans have asked us for more access to in-car cameras, so this package is the ultimate for NASCAR fans, because they can augment the free coverage on cable or network TV."
OPS TO POCKET 30%
Neither Jacobson nor Brooks would disclose revenue-split figures, but sources close to the situation said operators would pocket 30 percent of each package buy. NASCAR would garner the lion's share, at 50 percent.
In Demand and ACTV would split the remaining 20 percent.
NASCAR — which wouldn't confirm the 50 percent take — will keep 10 percent of its revenues, kicking 65 percent back to racetrack operators and 25 percent to the racing teams, said Brooks.
NASCAR's broadcast and cable-network partners won't receive revenue directly from the package, but Brooks said the networks would benefit through a decrease in per-race production costs.
The package will retail for a suggested price of $99 for 22 races, well below the $139 to $159 price tag for other out-of-market PPV sports packages. The price will likely increase next year, when In Demand can offer all 36 NASCAR races, Jacobson said.
The channels will likely appear on the network's fourth movie transponder. "Operators will not have to allocate any incremental bandwidth, and they already have placed the necessary equipment at the headend," Jacobson said.
WIN FOR IN DEMAND
The deal is also a milestone for In Demand, which has struggled to establish itself as the pre-eminent distributor of PPV and video-on-demand programming to the cable industry.
In Demand has competed with other content aggregators, such as Intertainer Inc. and TVN Entertainment Corp., for valuable VOD rights to Hollywood films. But it dominates cable PPV sports.
"To have an initiative where our brand is in a logo lockup with one of the most powerful and recognizable brands in sports television is very significant," Jacobson said.
Both Jacobson and Brooks said it's difficult to estimate how many buys the package could generate.
"We're very optimistic," said Brooks. "There's a real focus on creating a quality product that will be a value to the fans. If we create a compelling product, we think the fans will respond."
NASCAR will promote the package on its broadcast and basic-cable telecasts, and will educate fans about the offering through various NASCAR-related media, including its Web site (www.nascar.com). But no on-site signage for the package is planned.
"We will raise the awareness to make sure all fans know it's out there, but local cable-operator promotion through In Demand will ultimately be the best way to reach the fan who would like to have this," Brooks said.