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Discussion in 'TV Show Talk' started by Drucifer, Jan 15, 2016.
Most Cable Subscribers Would Dump ESPN to Save $8 a Month
That's a highly misleading survey question. Sure they would, if they don't tell them about the resulting ripple effect first.
As we saw with FS1, many sports contracts have distribution clauses which is why FS1 gave in at the last minute and let all the other providers get it at the rate they were paying for Speed. It's also why ESPN made some mid-contract deals a few years ago to swap ESPN Classic and ESPNU's package placement on many providers.
If ESPN is in less homes and couldn't get the same ad rates anymore, The NFL, MLB, NBA, NASCAR and NCAA would look elsewhere and move the ESPN games to channels like USA, TNT, TBS, FX, Spike, or even channels like AMC or Discovery, and their prices would go up instead. (i.e. Discovery now owns Eurosport, if it meant they can get some worldwide NFL and/or NBA rights as part of a deal, they would bring those resources here and rebrand one of their channels into Discovery Sports) TNT and TBS are already one of the more expensive basic cable channels because of the NBA and MLB rights they have, that price would only go up if they were able to also get the games that currently air on ESPN as well as other sports like the NFL and regular season NCAA games.
Yeah, you might save $8 in the short term, but in the long term after the resulting bidding wars, it will be worse, but this time it will be channels that also have some of the highest rated shows on cable so it won't be as easy to let them go.
A better question would be "Would you drop ESPN to save $8 a month now, even if it meant within the next few years some of your other favorite channels that picked up all those sports doubled or tripled their price?"
I would drop it from December to August, and pick it back up during NFL regular season just for MNF.
I agree that the leagues may try to go elsewhere after their deals are up with ESPN, but it also wouldn't surprise me if they find out that they can't get as much money from the other stations, once those stations see what happened to ESPN.
USA isn't going to pay as much money for the rights to those sports if they think that they will have to raise their price to a point where people are going to start dropping them to save money. They wan't their other shows to survive.
The difference is it won't be one network/company buying all the rights like it is with ESPN. And depending on the contract, the distribution clause could be used as a reason to terminate the current deals early. FS1 would have lost their NASCAR deal if they didn't reach the minimum distribution level they needed, which is why at the last minute they gave in and let the remaining providers get FS1 at the Speed rate.
They would be spread out amongst multiple networks with different owners. Like TNT would pick up more NBA games, TBS would pick up more MLB games, CMT or GAC might split the NASCAR rights, the NCAA rights could be split amongst multiple networks like FX, AMC or USA, and a channel like Spike or Discovery might pick up Monday Night Football, each one of them can also use that as leverage for a worldwide NFL rights deal since Viacom is rapidly expanding the Spike brand internationally, while Discovery has Eurosport.
In a world where ESPN is forced to go premium, ESPN might also put some clauses that force a commitment so they can still sell ads. Ads are sold well in advanced, you can't really set a rate if your subscriber count can change month to month.
As stated I expect most people would drop ESPN for months they don't needed it if it saved them $8.
But you are correct, kyL416, that the deal is not on the table and never will be.
The only people who can drop ESPN and be guaranteed a savings are commercial subscribers who are paying for channel groups a la carte. Fortunately they do not make enough of a dent in the marketplace to hurt ESPN's pricing structure and I suspect that more commercial subscribers are buying the ESPN package and the news package and skipping general entertainment channels (unless they are skipping a la carte and buying the business versions of the residential tiers).
Total entertainment costs are not likely to go down. KyL416 does a great job of explaining several of the issues. Basically the only way to reduce entertainment costs is to cut all the cords--internet and pay TV. And that simply means distributing your part of the total cost to someone else. And as they cut costs, their payments get distributed to you... Unless you totally cut the cords and don't pay for any TV.
Aren't there still some hidden, "family packages" that are hard to get, which do not include ESPN?
Though once the number of people who pick up those packages reaches a certain level, my understanding is cable and satellite still has to pay for the subs or deny more people from taking the packages.
So, you can thank me for your bill going up?
Yes and no. First off, do you get any paid TV: Hulu plus, Netflix, Amazon? And one person's cord cutting is a drop in the ocean of annual price increases the providers look for.
Ye$, but I'm already on a minimum package that doe$ not include E$PN or the Regional $ports Networks.
The one thing I don't understand is why ESPN's rates are so high. It is really the one DVR/Commercial Skipping proof channel out there. Yes some people record games and watch them later, but most watch live and that includes the commercials. So instead of charging the subs via the sat/cablco's, why are they not charging advertisers more?
ESPN is getting the best of both worlds ... subscriptions and advertising. Their rates are high - but they also pay a lot for access to content and production.
ESPN has the same problem as every other cable network ... less viewers than subscribers. Maintaining their subscriber numbers is important to keeping the networks on the air. Viewership is less important although that is what the advertisers are paying for. ESPN is still the most popular cable network ... even after having 10% lower ratings in 2015. (ESPN claims 4% lower ratings adjusted for NASCAR and World Cup - but less viewers is less viewers.)
ESPN is looking toward it's base. While advertisers help pay the bills the base is subscribers. $6 or more depending on report per month per subscriber (whether they watch or not) is a good base income. 63% of their income comes from subscribers.
While some advertisers may be willing to pay more if the rates go up too much they will buy less or move to another network for their ad buys. (An a la carte decision most subscribers do not have.)
I voted but it isn't as simple as implied.
There is a reason Dish's Sling TV starts with a package that includes ESPN.
It also ignores the highly unlikely scenario that dropping ESPN would result in an $8 drop in your bill. Maybe your bill might go down, but I'd bet it wouldn't go down by the whole amount you'd like to think!
People love to jump on the bandwagon and vilify one thing or another... but we are all paying for channels we don't watch. There are 200+ channels... there's no time to watch them all even if that's all you did! So... you're paying for stuff all the time that you never watch. That's how we all get more choice... by all pitching into the pool and letting the channels divide the bounty as they wish. If you kick one of those channels out of the pool, the rest would be foolish to give money back or leave it on the table... so don't expect channels going away to drop your bill.
It's like when people loved Amazon and wished for Circuit City to go under... and then jumped on Best Buy and others... well, as Amazon gets more of the pie they behave like the companies of old... then people wish they hadn't lost the competition and other stores that helped keep them all in check.
That is an entirely different question: "Would dropping ESPN reduce your bill by $8?" The question in the linked poll is more along the lines of "Dropping ESPN will save you $8. Would you drop ESPN to save $8?"
Yeah... it's just that the hypothetical poll question is proposing a highly unlikely scenario. The poll might as well ask "Would you drop ESPN to win a date with a supermodel?"
Or "Would you drop ESPN for the winning Powerball ticket?"
Dropping ESPN would not change anyone's rates. No one is going to automatically lower everyone's rates.
It'll either be spent on other channels or saved for extra profit now and to keep from having to raise rates for maybe one year. One year or maybe even make the rate increase lower for one year. That's all it would do IMHO.
Would You Pay $36 a Month for ESPN? (Re/code)
[...] Last year, for the first time, you could buy HBO on the Web without paying for any other cable TV. That was a really big deal, and something that didn’t seem possible just a few years earlier.
So now lots of people assume that the rest of the TV grid is going to go “a la carte,” too.
Don’t hold your breath. While HBO went off on its own much sooner than most people thought, it will be very hard for the rest of TV to follow suit. That’s because the TV model is based on the bundle — the idea that when you pay for TV, you get the channels you want, and lots of other channels you don’t want.
[...] Here’s a chart, via MoffettNathanson analyst Michael Nathanson, that tells you how much you’d have to pay to get some of the top TV networks on their own — if the networks wanted to replace the money they make selling their stuff wholesale to pay TV providers like Time Warner Cable.
It’s not a coincidence that the two most expensive networks — ESPN and TNT — are the ones that have spent the most on sports programming (you should throw in TNT’s sister network TBS to get a fuller picture, while you’re at it).
Or here’s yet another alternate title: “Is There Any Practical Way to Imagine ESPN Going the HBO Route?”
Full Article (Re/code)