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Would Dish Network Really Consider Dropping ESPN?


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#181 OFFLINE   FTA Michael

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Posted 18 October 2013 - 10:27 AM

I see no change in the basic economic principles that gave birth to bundling, so this business model will continue for the foreseeable future.

Just sayin', twasn't economics that created bundling, twas technology. When cable TV was born, you subscribed or you didn't. A real physical filter on each subscriber's line was required for every premium channel (to block or unblock, the technology varied). The world of nigh-infinite channel permutations came at least a decade later.

 

Mind you, the business model that grew up around this bundling is the primary force to block any attempts to change it. But it's not like ESPN had that model in mind when it went on the air.


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#182 OFFLINE   Stewart Vernon

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Posted 18 October 2013 - 02:47 PM

Just sayin', twasn't economics that created bundling, twas technology. When cable TV was born, you subscribed or you didn't. A real physical filter on each subscriber's line was required for every premium channel (to block or unblock, the technology varied). The world of nigh-infinite channel permutations came at least a decade later.

 

Mind you, the business model that grew up around this bundling is the primary force to block any attempts to change it. But it's not like ESPN had that model in mind when it went on the air.

 

Not sure what you mean....  the technology used to block channels was definitely different in the beginning than now... but in the beginning it wasn't an "all or nothing" choice for consumers subscribing to cable.

 

Before the tiers, people had choices...  then people were increasingly presented with a choice of pay-per-channel offering OR get a discount on a tier/bulk purchase of channels... and more people chose the bundled deal to save money... and eventually the cable companies just made the tiers the norm and slowly walked away from the individual offerings on most channels... and the channels themselves mostly liked this scenario too.

 

So... technology evolved to allow them to do what they wanted to do to serve what the customers were wanting them to do... it is hard to separate one from the other.


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#183 OFFLINE   James Long

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Posted 18 October 2013 - 04:22 PM

Not sure what you mean....  the technology used to block channels was definitely different in the beginning than now... but in the beginning it wasn't an "all or nothing" choice for consumers subscribing to cable.


It was if you're old enough. :) I had cable back when the only channels carried were locals. The weather channel was a black and white security camera that was set to pan left then right across a circle of dials. Advertisements were placed on cards between the weather dials. The cable company did not own a satellite dish. Everything was received via an array of antennas or via microwave link to another array of antennas in the next town over.

At that point it was all or nothing.

Then one day cable got their satellite dish and they introduced The Weather Channel, TBS and (at an extra cost) Showtime or HBO. It was as Michael reported ... everything for one price with physical adapters used to block signals for non subscribers. (Some areas would install a block at non-subscriber's homes ... other areas would feed a noise signal close to the Showtime and HBO feeds and install a block that would kill the noise at subscriber's homes.)

At that point it was all or nothing except those two channels. The local cable company didn't want to fool around blocking individual channels other than the one's where they could make a lot of money unblocking them.

Technology advanced ... the original cable boxes that were used to adapt a non-cable ready TV to pick up the new channels between VHF channels 6 and 7 and between VHF 13 and UHF 14 eventually became descramblers (too many people figured out how to watch the subscription channels without a subscription). But until those descramblers were common any cable ready TV could pick up any cable channel ... all one tier unless it was a specifically blocked channel. An all or nothing situation.

When technology allowed the tier system started and some channels became a higher tier. Satellite got there first as their channels were nearly all scrambled. They could sell channels "a la carte" ... but people used to buying cable in tiers quickly became used to buying satellite in tiers - and more importantly programmers insisted on selling their channels in tiers and not a la carte.

ESPN is not interested in selling their primary channels to 14 million individual DISH subscribers. They want them all in one fell swoop - or at least all the English package subscribers.
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#184 OFFLINE   Stewart Vernon

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Posted 21 October 2013 - 08:46 PM

For fun... expectations of new channels whenever this deal gets done...

 

Channels Dish currently carries in SD, but we expect HD feeds to come with the new agreement:

 

ABC Family
Disney East
Disney West
Disney XD
ESPNNews
ESPNU

 

We may or may not get East/West HD feeds for Disney.  They didn't have West in HD before... and Dish doesn't have HD West feeds for all channels it carries in SD.

 

Channels that Dish doesn't carry in SD or HD currently:

 

Disney Jr.
Fusion
Longhorn Network
SEC Network

 

Fusion launches on 10/28 I believe... so doesn't exist just yet, but at this point it would be amazing if it were not part of these negotiations.

 

SEC Network doesn't exist yet either... I think it launches in 2014... but I would be surprised if Disney isn't pushing it in this negotiation since it would be 5-10 years before the next one IF they sign a long term agreement like they did last time.

 

Depending on how they handle things... Longhorn Network could be a full-time SD, part-time "game only" HD feed... same could ultimately be true for SEC Network.

 

ALSO...  we would be expecting possible access to ESPN3 internet-delivered programming and access via the WatchESPN app on mobile devices.

 

Am I missing anything?


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#185 OFFLINE   James Long

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Posted 21 October 2013 - 11:40 PM

Your list seems reasonable ...

I would not expect Disney West but that would be a nice bonus for the west coast viewers. DirecTV doesn't have it and DISH doesn't have a lot of bandwidth to give to duplicate/time delay programming.

ESPN is advertising SEC as August 2014. I saw an ad during the NASCAR race on Sunday. A generic "call your provider" ad not targeted at DISH customers - but obviously they are working deals. SD with HD games for both Longhorn and SEC seems to be a fair assumption - if only to use as leverage with DirecTV when their contract is up. But at some point DISH needs to get in to the 24/7 RSN game.

WatchESPN / ESPN3 is a natural for DISH. I would not mind seeing them as receiver based "on demand" channels streamed via the Internet to the Hopper along with the PC/cellphone distribution. Offering more content with zero satellite bandwidth is not a bad thing.
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#186 OFFLINE   sregener

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Posted 22 October 2013 - 04:34 AM

WatchESPN / ESPN3 is a natural for DISH. I would not mind seeing them as receiver based "on demand" channels streamed via the Internet to the Hopper along with the PC/cellphone distribution. Offering more content with zero satellite bandwidth is not a bad thing.

 

I'd love to see this added.  My preferred Internet provider doesn't have ESPN3.  And integrating it into the Hopper would be awesome. 



#187 OFFLINE   TBoneit

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Posted 22 October 2013 - 02:09 PM

Your list seems reasonable ...

I would not expect Disney West but that would be a nice bonus for the west coast viewers. DirecTV doesn't have it and DISH doesn't have a lot of bandwidth to give to duplicate/time delay programming.

I wonder if Dish would/could do Disney West for WA subscribers and Regular Disney for EA subs?


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#188 OFFLINE   James Long

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Posted 22 October 2013 - 03:31 PM

I wonder if Dish would/could do Disney West for WA subscribers and Regular Disney for EA subs?


Too much of the country is on Western Arc.
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#189 OFFLINE   koralis

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Posted 30 October 2013 - 07:17 AM

Unbinding ESPN and Disney contracts won't happen VOLUNTARILY.   The government could get serious with its anti-monopoly laws and step in to fix the marketplace though.   It will take consumer complaints to congress and/or the executive to get them to fight though.

 

At the same time the gov could stipulate that ESPN is virtually a monopoly to itself, and stipulate that ESPN is not allowed to withhold access.  Contract disputes handled with FCC arbitors, etc.    Things COULD change... they probably won't but it's conceptually possible.


Edited by koralis, 30 October 2013 - 07:22 AM.


#190 OFFLINE   tsmacro

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Posted 01 November 2013 - 04:39 PM

Ergen Says Dish-Disney Relationship Strained as Talks Continue

Dish Network Corp. (DISH) Chairman Charlie Ergen said his company’s relationship with Walt Disney Co. “has not been our best” as the two sides try to hammer out a renewal of their contract, more than a month after the last one expired.

While Ergen is “cautiously optimistic” that the satellite-TV provider will be able to reach an agreement with Disney, nothing is final yet, he said in an interview on Bloomberg Television’s “Political Capital with Al Hunt.”

 

See the rest here: http://www.bloomberg...mpid=msnmoney#2




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#191 OFFLINE   Stewart Vernon

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Posted 01 November 2013 - 11:12 PM

I don't know how much you can read into statements made in an interview.  Charlie isn't likely to say "yes, everything is awesome" because it undercuts his company's negotiations... so he kind of has to be a little pessimistic when asked about it I think.


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#192 OFFLINE   sregener

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Posted 02 November 2013 - 04:27 AM

Unbinding ESPN and Disney contracts won't happen VOLUNTARILY.   The government could get serious with its anti-monopoly laws and step in to fix the marketplace though.   It will take consumer complaints to congress and/or the executive to get them to fight though.

I don't think the government really wants to get into the business of running entertainment companies.  They've had enough troubles trying to regulate and control the broadcast world to want to take on more with the pay-TV stuff.  Historically, when the government "fixes" a market, prices go up or availability goes down.  Market prices are controlled by the laws of supply and demand and you can't change the prices arbitrarily (i.e. by government edict) without impacting either the supply or the demand.

 

ESPN is not a monopoly.  They are a copyright holder, and they hold the copyrights to some sports programming.  But with the growth of college-conference networks like BTN, Pac12 and the like, it is getting harder and harder to argue that you must have ESPN if you want to watch sports.  In fact, less than half the major sports programming in any week is on ESPN.  If you want to argue that ESPN is a monopoly, then you have to argue that every copyright holder is a monopoly and thus all of them should be stripped of their ownership rights.



#193 OFFLINE   tsmacro

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Posted 02 November 2013 - 07:54 AM

I don't know how much you can read into statements made in an interview.  Charlie isn't likely to say "yes, everything is awesome" because it undercuts his company's negotiations... so he kind of has to be a little pessimistic when asked about it I think.

I'm just impressed that everyone seems to be acting like mature adults in this negotiation even though it's this far overdue.




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#194 OFFLINE   koralis

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Posted 02 November 2013 - 09:36 AM

Prices can't go up.   They're already as high as the market will allow at any given point in time, and they keep pushing it higher every negotiation.

 

Prices for Pro Sports are not controlled by the laws of supply and demand... they WOULD be if an individual consumer were allowed to not buy ESPN, then when they raise rates their viewership drops.   ESPN has monopoly pricing power, in that they get to dictate a contract and the other side has no other choice but to accept it or go out of business.  EPSN, with that sort of power, doesn't allow the consumer a choice as to whether a price hike is justified or not.   So to claim that ESPN follows the law of supply and demand is ridiculous unless you're asserting that going without TV in its entirety is how people vote with their feet for the actions of one company?

 

 

ESPN is not "merely" a copyright holder either.  They use their entrenched position in the market to guarantee that no one can outbid them in that market.   As a result, they're the only game in town and there will be no usurpers.   This is pretty much the definition of a broken market, and exactly the kind of thing that the Consitution authorizes the government to intervene with... regulating commerce.

 

 

The exact fix could be one of many things... for example, ESPN could be barred from buying more than X number of exclusives in any given sport, meaning that the NFL, NHL, etc, etc would have to sell to other channels also.   With more options, ESPN's power is degraded significantly.    (Or alternatively, you bar NFL, etc, from negotiating the exclusive contracts.   Amounts to the same thing, ultimately.)


Edited by koralis, 02 November 2013 - 09:45 AM.


#195 ONLINE   inkahauts

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Posted 02 November 2013 - 01:28 PM

But prices can and will go up. That's a sad fact.

#196 OFFLINE   Stewart Vernon

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Posted 02 November 2013 - 04:57 PM

That doomsday scenario has limits, though...  Ok, say Dish says "bye" and ESPN goes dark on Dish... guarantee the next DirecTV price negotiation will go rougher for ESPN.  ESPN needs to be on a bunch of providers (Dish, DirecTV, cable, etc.) so that they can pit them all against each other.

 

We've talked about this before...  People/viewers mistakenly think they are the customer.  We are not the customer.  We are the product!

 

Dish sells us to ESPN and says "IF you take this, we give you access to our customers"...  while simultaneously ESPN says "Carry our channel, and these customers will subscribe to Dish"...  They have a symbiotic relationship selling us, the viewer, to themselves.

 

We think we are the customer... but in many ways we are not.  That's why our choice has largely evolved to play or not play...  we gave up our negotiating power willingly over the course of the evolution of pay TV when we kept saying "more channels and hurry" and "gimme more for a discount"...  there went our power to negotiate packages vs individual channels...  we gave that up and became the product.


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#197 OFFLINE   sregener

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Posted 03 November 2013 - 04:27 AM

We've talked about this before...  People/viewers mistakenly think they are the customer.  We are not the customer.  We are the product!

 

Well, yes and no.  We are actually both.

 

Consider ESPN.  They get monthly revenue from each subscriber.  In that sense, we are the customer.  But they also get advertising revenue based on viewing numbers, and in that sense, we are the product (eyeballs) that is being sold.

 

Now consider your programming provider.  In every real sense, you are the customer.  You either choose to buy their product or not.  Dish negotiates to try to get the best deal from programming providers like ESPN, and their negotiating power is very much related to their current subscriber numbers.  Much like WalMart tries to get the lowest price from Heinz Ketchip so they can get more customers to shop at their store.  It isn't because Dish wants to save us money, though. It's to get more subscribers than their competition by offering more product (channels) for less money.  As far as Dish is concerned, you are the customer because they don't get any money from ESPN for delivering viewers to them.  Just as WalMart doesn't get paid for delivering more customers to Heinz.

 

If the day comes when Dish believes that they could make more money by not offering ESPN, they will do it.  They have no obligation to their customers to continue to provide a specific channel.  But if they want to keep their customers, they have to provide the best cost/benefit solution to those customers, or we'll end up shopping elsewhere.  And at least thus far, ESPN has not charged enough to convince any programming provider that they'd be better off without them.



#198 OFFLINE   JoeTheDragon

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Posted 03 November 2013 - 10:48 AM

For fun... expectations of new channels whenever this deal gets done...

 

Channels Dish currently carries in SD, but we expect HD feeds to come with the new agreement:

 

ABC Family
Disney East
Disney West
Disney XD
ESPNNews
ESPNU

 

We may or may not get East/West HD feeds for Disney.  They didn't have West in HD before... and Dish doesn't have HD West feeds for all channels it carries in SD.

 

Channels that Dish doesn't carry in SD or HD currently:

 

Disney Jr.
Fusion
Longhorn Network
SEC Network

 

Fusion launches on 10/28 I believe... so doesn't exist just yet, but at this point it would be amazing if it were not part of these negotiations.

 

SEC Network doesn't exist yet either... I think it launches in 2014... but I would be surprised if Disney isn't pushing it in this negotiation since it would be 5-10 years before the next one IF they sign a long term agreement like they did last time.

 

Depending on how they handle things... Longhorn Network could be a full-time SD, part-time "game only" HD feed... same could ultimately be true for SEC Network.

 

ALSO...  we would be expecting possible access to ESPN3 internet-delivered programming and access via the WatchESPN app on mobile devices.

 

Am I missing anything?

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#199 OFFLINE   mwdxer

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Posted 03 November 2013 - 11:41 AM

One thing I do not understand is why Dish moved ESPN Classic into the Sports package only, as the other ESPN channels are with the regular fare. I am not a big sports fan, but I do like some of the old stuff they have on ESPN Classic, but it is not worth the cost of the sport package just for that one channel. With Dish dropping so many other channels like Cloo, G4, and KBS World, it would be nice to get ESPN back in the regular package.

 

Patrick


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#200 OFFLINE   Paul Secic

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Posted 07 December 2013 - 10:57 AM

Anything  new with Disney and ESPN?


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