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 Message Boards » » ESPN A LA CARTE? Page [1]  
V0LC0M
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http://www.wralsportsfan.com/unbundling-how-much-would-you-pay-for-espn-/14735352/

They are on some serious drugs if they think I am paying $30 a month for ESPN.

and

Quote :
"These percentages echo a recent Reuters poll, which found 77 percent of respondents saying they'd like a la carte pricing and 54 percent saying they wouldn't pay a dime for ESPN."






[Edited on June 25, 2015 at 12:32 PM. Reason : LOL]

6/25/2015 12:29:44 PM

RattlerRyan
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Sling is only $20 and includes espn and espn2

6/25/2015 12:41:44 PM

Lionheart
I'm Eggscellent
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Yeah, I mean I get that they non sports people are subsidizing the sports fans here but even if you say that ESPN is costing ~$6.50 a month per subscriber and only 50% want ESPN you just double that amount and the price they would need to cover the difference would be around $15 a month.

Even accounting for other things I don't see how in the hell you make it to $30 unless I'm just missing something completely.

6/25/2015 12:52:24 PM

Sweden
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I'll continue to not pay it and just use somebody else's watchESPN login.

6/25/2015 12:54:18 PM

ncsuallday
Sink the Flagship
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Sling looks pretty good actually.

All I really watch is ESPN (1, 2, U), Food Network, HGTV, Cooking Channel, Travel Channel, Discovery, AMC, TBS, ABC, NBC and HBO.

6/25/2015 2:07:25 PM

Flyin Ryan
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This is why I think sports are heading into a recession. The business models for pro sports leagues and college sports are all built on ever larger and increasing TV rights fees. They're not getting the money they've been getting with any combination of less cable subscribers, unbundling, and online streaming.

They may find some desperate idiots that are willing to pay more but good luck on that channel not going out of business because they can't pay their bills. ESPN I think also is a bit of a special case because Disney counts on ESPN for a very significant amount of their overall revenues, to the point where if ESPN collapsed so would Disney.

[Edited on June 25, 2015 at 2:48 PM. Reason : .]

6/25/2015 2:43:40 PM

dmspack
oh we back
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Quote :
"They are on some serious drugs if they think I am paying $30 a month for ESPN."


the problem with that is, you're hardly saving any money if you do that. if you want to cut the cord, it's because you wanna save money. but if you cut the cord and then pay $30 for ESPN, $10 for Netflix, and maybe $10 for HBO you're already up to $50/month. if i were in that situation, i'd just dish out a little more and get like 500 channels plus DVR, etc for $75/month or whatever it costs.

i'm gonna move into a new place soon. probably won't get cable immediately. i'll wait until at least the fall (football season) to even consider it.

[Edited on June 25, 2015 at 5:04 PM. Reason : i realize the point i'm making isn't anything groundbreaking though]

6/25/2015 4:50:49 PM

Wolfpackman
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I have debated getting rid of cable numerous times over the past few years. Problem is I'm a huge sports fan and basically ESPN has me by the balls. My only issue with these online streaming services is the quality. I have several friends who have awesome 60 inch tv's but it looks like ass to watch sports due to internet streaming quality. Maybe it has come a long way since then.

I also have witnessed several of my coworkers make the switch from cable/satellite only to end up paying more in other bills each month. Basically they'll go to the bar once or twice a week to watch Pack games and pay for beer/food, which ends up being more than just paying a cable bill at the end of the month.

6/26/2015 8:43:54 AM

Flyin Ryan
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Quote :
"My only issue with these online streaming services is the quality. I have several friends who have awesome 60 inch tv's but it looks like ass to watch sports due to internet streaming quality. Maybe it has come a long way since then."


It's hit or miss. And as far as crashing, doesn't matter if it's a big event or small event, corporate stream or some illegal stream, they all do at some point.

[Edited on June 26, 2015 at 11:32 AM. Reason : .]

6/26/2015 11:31:38 AM

Jeepin4x4
#Pack9
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WatchESPN through my FireTV Stick and 15 Mbps Down internet service streams full 1080 with hardly any hiccups. it's come a long way for sure.

6/26/2015 11:49:09 AM

Big4Country
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Quote :
"the problem with that is, you're hardly saving any money if you do that. if you want to cut the cord, it's because you wanna save money. but if you cut the cord and then pay $30 for ESPN, $10 for Netflix, and maybe $10 for HBO you're already up to $50/month. if i were in that situation, i'd just dish out a little more and get like 500 channels plus DVR, etc for $75/month or whatever it costs."


Plus you would still have to pay for a high speed internet server.

6/26/2015 4:25:04 PM

V0LC0M
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Yeah don't forget about that pesky server!

[Edited on June 26, 2015 at 4:42 PM. Reason : ]

6/26/2015 4:41:39 PM

dmspack
oh we back
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^^right - at some point it really isn't economical to cut the cord when you start paying $10-15 here and there for various standalone programming your bill can start to add up pretty quickly. and i assume most people have decent internet even if they still have cable...but a lot of those companies will bundle the two together for a slightly better monthly price. you wouldn't get that advantage without cable. obviously it all depends on what you want out of your TV experience. do you really only watch a handful of network shows that you can find easily online? or do you like to just channel surf? or do you need to be able to watch every single sports event on fox sports, nfl network, cbssports network, all the espns, etc?

[Edited on June 26, 2015 at 5:07 PM. Reason : f]

6/26/2015 5:05:55 PM

wolfpack2105
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i was seriously thinking about cutting the cord until nascar moved to NBCSN and directv started carrying that channel in my package.

6/27/2015 6:03:14 AM

Big4Country
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^FS1 is using tactics like that too with NASCAR, to try to improve their status and hopefully get added to some of the base packages.


Quote :
"These percentages echo a recent Reuters poll, which found 77 percent of respondents saying they'd like a la carte pricing and 54 percent saying they wouldn't pay a dime for ESPN."


Actually 46% willing to pay for ESPN is probably pretty good when compared to other networks. I'm guessing Fox News, or CNN could maybe get the same numbers, but I doubt anything else would. Would 46+ percent buy TLC, Comedy Central, Home Shopping Network, HGTV, BET, MTV, Smithsonian, Cartoon Network, Nat Geo Wild, etc?

6/27/2015 1:24:04 PM

ViolentMAW
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I just did a 7 day free trial with Sling. Streaming quality is absolute poo. I guess I'll wait until Apple delivers their service.

6/28/2015 3:58:16 PM

stowaway
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^^ depends entirely on what they'd charge. The ESPN family of networks is by far the most expensive for cable providers to carry. Outside of the networks, ESPN family, and Discovery family, there's only a handful of channels I actually watch regularly.

6/28/2015 5:05:56 PM

Big4Country
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^If they gave me HSN, BET, DIY, HGTV, and Fuse for free I would pass. Even though less than 50% of people want ESPN, their percentages are still probably better than most networks. I'm guessing pure A La Carte would kill most networks.

[Edited on June 28, 2015 at 7:47 PM. Reason : .]

6/28/2015 7:46:04 PM

tower
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just started using plex and it solved my only problem with old tv shows - autoplaying episodes back to back from my computer to the tv on chromecast

im ditching cable this week and this fix might be good enough to ditch netflix with it. only thing im really worried about is the games state plays on like Fox Sports Midwest 3. can bum an espn3 account off a friend no problem

6/28/2015 7:57:03 PM

Flyin Ryan
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With the disclaimer of this was posted on foxsports.com:

http://www.foxsports.com/college-football/outkick-the-coverage/is-espn-a-giant-bubble-about-to-burst-071215

Quote :
"Is ESPN A Giant Bubble About To Burst?

Big news came out last week that might have gotten lost in the shuffle of the slowest sports week of the year -- according to the Wall Street Journal the number of cable subscribers is beginning to contract in a more rapid fashion. In particular, ESPN has lost 7.2 million subscribers in the past four years, over three million since last year. That could have a seismic impact in sports media since if the cable bundle is one large bubble -- as some have been suggesting for years -- then the sports universe may be in for a cruel tumble. I'll explain why that could be, but first let's spend some time with a refresher on the cable and satellite industry.

You pay for every single channel you receive on your cable or satellite package. Most people don't realize this because the cable bill is one large number, but if you break your bill down every single channel has a monthly cost. Here are the 15 most expensive national sports networks along with what they cost a month and the number of homes they're in. (Numbers courtesy of SNL Kagan).

1. ESPN $6.61 x 94.5 million homes = $7.5 billion
2. NFL Network $1.31 x 73.6 million homes = $1.16 billion
3. FS1 .99 x 91.2 million homes = $1.08 billion
4. ESPN2 .83 x 94.5 million homes = $941.2 million
5. SEC Network .66 x 69.1 million homes = $547.3 million
6. Golf Channel .35 x 79.4 million homes = $332.2 million
7. NBC Sports Network .30 x 83.1 million homes = $299 million
8. Big Ten Network .39 x 62 million homes = $290.2 million
9. MLB Network .26 x 71.3 million homes = $222.5 million
10. FS2 .28 x 64 million homes = $215 million
11. NBA TV .29 x 57.2 million homes = $199 million
12. ESPNU .22 x 74.9 million homes = $198 million
13. CBS Sports Network .26 x 61 million homes = $190.3 million
14. NHL Network .32 x 37.4 million homes = $143.6 million
15. Pac 12 Network .39 x 12.3 million homes = $57.6 million

While you probably receive in excess of 100 channels, most of us watch only 16 or 17 channels in a given month. If you're a single girl without kids, you probably don't watch Sprout and if you're a single guy you probably don't watch Lifetime, but you pay for every channel you receive. In practice this leads to much better television, because channels can go after small audiences with powerful and compelling programming that might not otherwise be financially feasible. For instance, hardly anyone watches "Mad Men," in the grand scheme of ratings. It's a very smart, slow-paced, intellectual program that appeals to a relatively small audience. On average less than four million people watch each episode of "Mad Men." That leaves over 90 million people who receive the channel and the show but don't watch. Yet these non-viewers subsidize "Mad Men," by paying for AMC. Since most of us receive over 100 stations yet watch only 16 or 17, we all pay for in excess of 80 stations that we don't watch. One positive result of the cable bundle has been a tremendous amount of money rolling into television programming and the flourishing of great shows that wouldn't necessarily work if ten million or more people had to watch. That's why I've written before that I support the idea of cable television bundles, everyone subsidizes everything meaning that the quality of programming is stellar across the television landscape. We may not all like the same shows, but all of us have never had better options. We've been in the midst of the golden age of television.


But there's trouble on the horizon. In particular, cable and satellite subscriber numbers are contracting, leading to declining revenues for cable networks. Even more alarmingly, it appears that the number of cord cutters -- the term for people who don't subscribe to cable or satellite at all -- is accelerating and that companies are fighting this acceleration by going "over the top" and allowing consumers to buy their channels without requiring a cable or satellite subscription. That is, we're entering a choose your own entertainment era when consumers are demanding the right to pay for the content that they consume and not what they don't watch. That's bad for the cable and satellite bundles.

So how does this rapidly changing environment impact sports? I'll explain.

Most channels don't cost very much, but ESPN does, it's the single most expensive cable channel, costing roughly $6.61 a month according to SNL Kagan, nearly $5 more per month than its next closest competitor.

Here are the ten most expensive cable channels according to SNL Kagan:

1. ESPN $6.61
2. TNT $1.65
3. Disney Channel $1.34
4. NFL Network $1.31
5. Fox News $1.12
6. USA Network $1.00
7. FS1 $0.99
8. TBS $0.85
9. ESPN2 $0.83
10. Nickelodeon $0.73

So if people start cord cutting -- the catch all term for individuals who decide they'd rather not pay for a cable or satellite subscription -- ESPN has by far the most to lose of any channel in the country. ESPN has become the most powerful sports company in the world because just about every single cable and satellite subscriber in the country pays in excess of $6 a month for ESPN. That's despite the fact that only 20% of cable and satellite subscribers would be willing to pay for standalone ESPN according to a 2013 Needham and Company report. As a result, four years ago ESPN netted somewhere in the neighborhood of $7.2 billion a year in subscriber fees when the network boasted 100 million cable and satellite subscribers. But something alarming has taken place in the past four years, the Wall Street Journal reported last week that ESPN has lost over 7 million subscribers. Even more alarmingly, the pace of cord cutting is accelerating, the past year alone has seen ESPN lose over 3 million subscribers. That means in the past four years ESPN's subscriber numbers have declined by 10%, driving down revenue projections.

What has ESPN been doing with all this revenue? It's been buying up sports rights. Since these sports rights are the top ratings driver, the working consensus has been that you can never have too many live sporting events. After all, there are only so many games to go around. If you have them, your competitor can't. So buying up rights seems like the safest and most conservative way to protect and grow your business. It's hard to beat ESPN without great live sports programming because most people don't watch sports channels otherwise. (ESPN's top original program is "Pardon the Interruption," which receives around 900,000 viewers a day. That's a tremendously successful program for sports, but it's nothing when you consider that HBO's top program, for instance, "Game of Thrones," receives twenty million viewers. Put simply, ESPN doesn't have much original programming that very many people other than live sporting events. To be fair, no one does. Sports networks have never developed must watch programming other than the games themselves.)

ESPN has been on a buying spree of late pledging $1.9 billion a year to the NFL for Monday Night Football, $1.47 billion to the NBA, $700 million to Major League baseball, $608 million for the College Football Playoff, and hundreds of millions more to the SEC, the ACC, the Big 12 and the Pac 12. At an absolute minimum it would appear that ESPN presently pays out nearly $6 billion a year to sports leagues just in rights fees. The money from those rights fees comes from our cable bills. And, significantly, from tens of millions of people who will never watch a single game on ESPN.

So before it can make a dollar, ESPN has to pay out roughly $6 billion a year to sports leagues. That's every year for a decade or more. When cable and satellite subscriber numbers were staying constant, that was certainly doable, but what happens if those subscriber numbers start to decline? Right now ESPN has 92 million subscribers. What we don't know is this, what would happen if cord cutting eventually drove that number down to, say, sixty million subscribers? Then ESPN would bring in $4.75 billion and owe the sports leagues six billion. (Advertising would also decline in concert with overall revenues. Right now ESPN gets about 25% of its revenue from ad sales. But those ad sales are predicated on being in nearly 100 million homes. As ESPN's reach declines, so does its ad revenue. I haven't spent much time on ad sales because I haven't spent much time on the fixed costs associated with putting all this programming on television either. That ain't cheap. Those numbers roughly cancel each other out. The same issues that would face ESPN would also face ESPN2 and ESPNU, but those channels are much smaller so the comparative loss would be much less significant, but no less calamitous.)

Which brings us to a trillion dollar question that is suddenly making cable executives nervous across the country: Is the cable bundle an unsustainable bubble that's poised to pop or not? Of course, bubbles are notoriously hard to predict -- even for genius economists -- until they suddenly explode. We've witnessed two massive bubbles in the last fifteen years, each of a different nature. First, the tech stock craze that imploded the American stock market. This was a bubble fueled by frenzied exuberance, the quest to get rich quick off companies with no earnings or revenue. The more recent bubble was the subprime mortgage crisis that threatened to submarine our entire economy. Put simply, people were receiving mortgages for homes that they couldn't afford if real estate prices didn't keep going higher."


[Edited on July 14, 2015 at 1:59 PM. Reason : .]

7/14/2015 1:58:04 PM

Flyin Ryan
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continued:

Quote :
"

So is the cable bundle a bubble? It certainly has several of the traits that characterized our last two bubbles. Namely, an irrational belief that things would continue to exist as they had existed and built in costs that are unsustainable if the business model rapidly changes. The cable and satellite industry has been growing for forty years, no one wants to believe anything could change. That's why it's possible this is more accurately described as a paradigm shift in the way people consume their entertainment. Instead of a cable or satellite subscription, younger people will subscribe to Netflix or Hulu or HBO's over the top offering and save substantial money in the process. Regardless, the number one argument that people use to combat the idea that a bubble might be at hand is by denying that a bubble may actually be at hand. Indeed, many of you probably recall reading articles from economists before the tech bubble or the subprime mortgage bubble popped explaining why it was impossible for there to actually be a bubble. (Economists are great at explaining why things happen after they happen. But forecasting? Forget it.) It's also important to point out that I'm not saying there is a sports rights bubble, I'm saying that there could well be a cable bundle bubble, which has allowed sports rights to rise so rapidly.

Why does any of this matter? Let's say ESPN nets $7 billion in subscriber revenue and let's also be generous and say that one quarter of all cable and satellite subscribers are watching the channel in any given month. If that's the case then ESPN is making $5.25 billion a year off people who wouldn't pay for ESPN without the bundle. Think about how crazy this is. Does any other business -- besides insurance, which you buy as protection hoping never to need -- make 75% of its money off people who wouldn't choose to consume the product? (That's why if you're a sports fan the cable bundle is a great deal. Sports are the most expensive part of cable and satellite packages and sports fans are only paying for about a quarter of the overall cost.) What would ESPN have to charge the 25% of fans who would actually pay for ESPN in order to produce the same revenue?

Stand alone ESPN seeking to produce the same revenue would cost at least $30 a month, or twice what HBO costs and three times what Netflix costs a month. Some sports fans would still consider ESPN to be a bargain at that price, but keep in mind you'd also have to pay for ESPN2 and ESPNU and the SEC Network and FS1 and NBC Sports Network and whatever additional regional cable channels carry your favorite local team's games. The net result would be most sports fans would pay over $100 a month just for sports channels. If you're a dad, like I am, you'd have to pay additionally for kid's channels. Your wife probably watches different channels than you do too, add on those costs too. Pretty soon you're paying more for less. That's why a la carte isn't a great deal for sports fans. In fact, it's a worse deal.

And how many sports fans can afford those kind of monthly costs for standalone ESPN and additional sports programming? As if that wasn't enough, keep in mind that fewer ESPN subscribers means less viewers, which means less advertising dollars as well. Now, the likely result for the entertainment channels would probably be scaled back offerings. More reruns, less risky original programming. Is AMC going to green light a show about a chemist who becomes a drug lord? Maybe, maybe not. With less risk taking, there's a lower chance of hit shows like "Breaking Bad" ever being made. Does a show I love, like "The Americans," make sense for FX without over 90 million people who aren't watching helping to defray the cost of original programming? Maybe, maybe not. But that's all for original programming, cutbacks, while painful for those of us who love this era of television, are relatively easy there.

But ESPN doesn't have that option. It has substantial yearly fixed costs of around six billion over the next generation. Remember, ESPN has guaranteed payments to the NFL, the NBA, Major League Baseball, the college football playoff, the SEC, the ACC, the Pac 12 and the Big 12. Those rights fees, which have been soaring of late, are all predicated on the bundle's revenue. That is, ESPN's using money from the majority of people who don't watch their channel to buy programming for the minority of people who are watching. (This isn't unique to ESPN, by the way, it's the entire business model of cable). Sure, some of that cost can be defrayed and recouped by "free" programming on ABC -- the NBA Finals are on ABC for instance -- but most of ESPN's revenue is based on subscriber fees because people demand the channel for games they can't see elsewhere. If those fees plummet because of reduced subscribers ESPN is suddenly in a world of trouble. Same too if ESPN starts to put popular programming -- the college football playoff, for instance, on ABC instead of ESPN. The entire justification for why those fees are so high is because you can't get those games anywhere else. In fact, ESPN is probably contractually forbidden from putting those games on ABC. (It's important to note that the cable bundle popping would also hit sports stations like FS1 and NBCSN as well, but nowhere near as much. Primarily because those stations aren't very expensive compared to ESPN and most of their highest-rated sports programming -- the Triple Crown, the U.S.'s biggest World Cup matches, the World Series, the Olympics, the U.S. Open, and the NFL's NFC package -- already air for free on Fox or NBC).

If the cable bundle bubble pops, ESPN -- and Disney -- stand to lose far more than any company in America.

But it's not just my theory. ESPN is starting to behave like a company that bought a ton of sub prime mortgages and just realized the danger on its books. Bill Simmons and his high salary is gone, Keith Olbermann and his salary is gone as well, so too is the fancy New York City TV studio. Remember the much ballyhooed announcement of Mike and Mike's radio station move to New York City? Canceled just a couple of months after it was officially announced. That suggests the drop in revenue has caught ESPN by surprise. Reports are that ESPN has to cut $400 million out of the budget over the next two years. Why do you have to cut your budget? When planned revenues aren't materializing. That revenue isn't coming because ESPN has lost over seven million subscribers in the past four years. But what if this is just the start of cord cutting and it will continue to grow? What if three million leaving this year is five million next year, and seven million the year after? How much can you cut when the vast majority of your budget isn't people and places and their salaries and rent, it's sports programming costs locked in for the next twenty years? Those sports programming rights were supposed to be the moat that protected ESPN from competitors, but what if instead it drowns the company?

Companies rise and fall with amazing rapidity today and there's a quiet panic in place at ESPN that most fans haven't realized yet. Neither have the sports leagues. Where do you think, for instance, most of the money is coming from to pay these sky high new NBA salaries? The NBA's new television deal. Player salaries in pro sports are directly connected to the potential bubble of television rights. What happens if television rights fees, which may well have been artificially inflated by ESPN's artificially inflated bubble of rights purchases, stagnate? Player salaries won't increase much, if at all. What about team revenue for the channels they own? How many teams could survive in pro sports if their television money suddenly declined by 25%? What happens if ESPN, currently responsible for roughly a quarter of Disney's overall profits, starts to lose money over the next ten years because the revenue produced by the cable bundle isn't adequate to support the expensive rights fee obligations over the next twenty years?

Uh oh.

That money has to come from somewhere, right? Disney better sell a ton of light sabers and princess uniforms to pay for ESPN's losses.

But here's where things get even more dicey for ESPN, the Wall Street Journal reported that ESPN can't begin to offer a direct to consumer product without giving up the contractual right that it be carried in virtually every cable and satellite subscription offering. (Seriously, go find a cable and satellite package without ESPN, it's almost impossible. ESPN is also zealously protecting this right, recently suing Verizon over cable bundles). That means that if ESPN starts chasing direct to consumer cord cutters with an over the top offering it risks losing the free riders it already has on cable and satellite. And forget about the low cost option, ESPN has already lost enough subscribers, according to the Wall Street Journal, to end its Dish Network partnership for low rate $20 a month cable subscriptions.

So here's the trillion dollar question -- how many cord cutters are there and how rapidly are they going to abandon their cable and satellite subscriptions? How many non sports fans are going to realize they don't watch sports and shouldn't be paying for those of us who do watch sports?Because if cord cutting continues to accelerate, pretty soon ESPN is going to be the biggest media bubble since AOL merged with Time Warner.

The worldwide leader in red ink."


[Edited on July 14, 2015 at 2:00 PM. Reason : .]

7/14/2015 1:59:13 PM

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