The economics of "premium" entertainment can be analyzed in the cost recovery system for the "big" stars.
A $10+ million payment to a movie star for an appearance in a movie is recovered from voluntary theater ticket sales to fans, then from dvd and on-demand video voluntary sales, then from a premium channel like HBO from voluntary subscribers, and finally, years later, from ad supported cable/broadcast airings.
A $10+ million salary to an NFL star is recovered from voluntary stadium ticket sales to sports fans and simultaneously from
taxing the huddled masses charging almost all American TV viewers for ESPN and from ad supported cable/broadcast airings, then from sports packages from voluntary subscribers.
Yes, I recognize that we all pay general fees for cable and broadcast channels, but my guess is that ad revenue supports airing live sports like NBC Sunday night football and old movies, not our fees.
But you don't have to share the cost for my seeing expensive stars in HBO shows and movies.
And I know that Charlie shares my view on this one, but like me is trapped by a system that creates a truth, justice and The American Way natural right for all Americans to receive a tax subsidy to watch expensive NFL stars beating their brains out.
As noted by the Wall Street Cheat Sheet:
The high cost of sports has long been an issue that Dish Chairman Charlie Ergen has vocally addressed. Walt Disney Co.’s (NYSE:DIS) ESPN is the most expensive of the national sports channels, and it also offers its channels as a packaged deal, which has frustrated Dish and instigated contractual disputes.
Though the pay-TV operator has yet to officially threaten Disney with a contract cut, it has expressed its willingness to drop Disney’s channels if need be, with Ergen maintaining, “We’re prepared to go either way.”
...But according to The Wall Street Journal, Dish challenges that argument by explaining that its ESPN programming charges account for more than 40 percent of its cost but add up to less than 20 percent of its viewing minutes. Therefore, Ergen believes Dish could potentially drop ESPN with insignificant backlash in the long run. But analysts like Barton Crockett disagree, saying, “No one is going to be a meaningful player in this industry without carrying ESPN.”
If Ergen dropped the Disney package of channels tomorrow with a clear statement that he will not allow it back without putting ESPN into the AT120+ and above tiers and the Disney channels in the AT200 and above tiers, I'd pay for a second full service connection in my house to help out. And I don't need my local ABC O&O.
Edited by phrelin, 07 September 2013 - 01:12 PM.