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Godfather
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A couple of thoughts on this…

1. A couple of MLS teams (FC Cincinnati and DC United I know of) ca. 2019/20 used Flo Sports as their in-market streamer. They had a monthly price $20. Everyone was mad. FC Cincinnati in particular has an OTA broadcaster, so it was people in the 25-75 mile range whose only option was Flo. Did I mention nobody liked it, particularly the price. Both FC Cincinnati and DC United ended up canceling the deal because of fan outrage. Currently, FC Cincinnati streams the games through the team web site. I’m not sure what DC United does.

2. When does the local rights agreement between Ballys and the teams end? Someone mentioned the carriage agreements with cable cos. ending in 2023. Those rights are essential to Bally’s business model.


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When does the local rights agreement between Ballys and the teams end?
Not for a long time. Be it Bally’s (Sinclair) or the others. Most run into the mid-30, some well into the 40.

That is the issue. Until a few years ago, MLBEI was a supplement. The customer already bought a basic package, and thus paid for the local RSN. Now the cheap price of MLB.TV, without the local teams, threaten to damage the sport the same way the Braves and Cubs did two decades ago. Something must be worked out where it is not possible to access other people’s teams without first paying for your own.
 

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Godfather
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That is the issue. Until a few years ago, MLBEI was a supplement. The customer already bought a basic package, and thus paid for the local RSN. Now the cheap price of MLB.TV, without the local teams…
FC Cincinnati’s and DC United’s experience with Flo Sports leads me to believe that this will not go well for the teams or Sinclair. The whole episode brought outrage from the fan bases over pricing. I have a tough time seeing baseball fans acting differently.

The teams need to get real familiar with the termination clauses in these local agreements. I expect a few may be exercised.


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Beware the Attack Basset
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During baseball season, I mostly only watch baseball.I don't care about the NBA or NHL. I could really cut my bill down if I could get Braves' games for $20 per month.
What do you do with the other 12 waking hours of your day?
 
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At least on the MLS side of things the league basically told teams not to sign their local TV rights past this current season. That has lead many to believe that the new forthcoming MLS TV deal will be some kind of all in package that includes the local regional broadcasts and likely each game will only have one broadcast on those instead of each team doing their own. But until the new TV deal is announce it's hard to say if this will happen or not.
 

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The one issue I have with these streaming networks for sports is this. It's going to retard growth of these sports. When you have your RSN as part of a cable/sat/OTT (like DTV Stream) package, the casual fan, who might be flipping around channels, might stay to watch a game. Maybe they do this for more than one game. Maybe you might watch 20-30 games out of 140 or so televised baseball games. But to buy a network like Bally, or even a dedicated channel like Marquee (to the Cubs), more than likely to shell out the money, you are most likely more than a casual fan. So rather than have millions of potential viewers in a large metro area, you now are down to the core 200k or so. That's not a great way to promote your sport. And since I firmly believe that RSNs as we know them the ones that come with your cable / sat package will go the way of the dodo bird without 10 years, it's going to hurt interest in those sports they show. If I'm a causal fan, would I spend $20 a month to watch the games? Probably not. I'll just forget the sport and move on to something else.
 

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The one issue I have with these streaming networks for sports is this. It's going to retard growth of these sports. When you have your RSN as part of a cable/sat/OTT (like DTV Stream) package, the casual fan, who might be flipping around channels, might stay to watch a game. Maybe they do this for more than one game. Maybe you might watch 20-30 games out of 140 or so televised baseball games. But to buy a network like Bally, or even a dedicated channel like Marquee (to the Cubs), more than likely to shell out the money, you are most likely more than a casual fan. So rather than have millions of potential viewers in a large metro area, you now are down to the core 200k or so. That's not a great way to promote your sport. And since I firmly believe that RSNs as we know them the ones that come with your cable / sat package will go the way of the dodo bird without 10 years, it's going to hurt interest in those sports they show. If I'm a causal fan, would I spend $20 a month to watch the games? Probably not. I'll just forget the sport and move on to something else.
This is the problem that ESPN and RSNs and the likes all face.

Instead of looking at actual viewership, they looked at subscriber numbers. They saw that they had millions and millions of subscribers so they bought out broadcast rights to various teams and leagues for millions and millions of dollars.

Now they're finding out that people subscribed to these services - basically because they had to, but they didn't actually watch them. As consumer prices sky rocketed and skinny bundles became more and more popular, those subscriber numbers dwindled... fast.

Now these sports broadcast companies are bleeding money because they paid money for broadcast rights and they no longer have the capital to back them up.

The ESPN and RSN model has basically always been dependent on the "casual fan" paying for the service so the total cost can be distributed out among several customers at a lower price per customer fee. And now those "casual fans" are deciding that they don't want to pay for it.
 

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This is the problem that ESPN and RSNs and the likes all face.

Instead of looking at actual viewership, they looked at subscriber numbers. They saw that they had millions and millions of subscribers so they bought out broadcast rights to various teams and leagues for millions and millions of dollars.

Now they're finding out that people subscribed to these services - basically because they had to, but they didn't actually watch them. As consumer prices sky rocketed and skinny bundles became more and more popular, those subscriber numbers dwindled... fast.

Now these sports broadcast companies are bleeding money because they paid money for broadcast rights and they no longer have the capital to back them up.

The ESPN and RSN model has basically always been dependent on the "casual fan" paying for the service so the total cost can be distributed out among several customers at a lower price per customer fee. And now those "casual fans" are deciding that they don't want to pay for it.
I think it's a little different with RSNs and ESPN (and other sports channels) than with dedicated streaming RSNs. SO with channels, people like the idea of watching sports, even if they don't watch all the time. I don't watch ESPN that often, but as a sports fan, I'd pay to have it so I can watch when I want to or need to, like any other channel I might not watch all the time. RSNs, which show the local team I root for, I would definitely pay for. But, here's the thing. I live in NY Metro area. We have THREE major RSNs. We have YES Network which broadcasts the Yankees and the Nets. We have SNY which broadcasts the Mets and MSG (and it's subnetworks) that broadcasts all the NHL teams in the area and the Knicks). And while I watch the Yankees and NY Rangers avidly, I do watch the other teams on occasion and like having the option to watch them. But, if I had to pay for them separately (i.e. as a streaming service), I'd DEFINITELY not want to pay for SNY. And if I'm just a casual fan of any of them, I'd definitely want them as a channel that I might watch on occasion and I am glad that I don't have to pay for each separately, but if I had to, same thing, I wouldn't pay for what I only occasionally watch (and it would be MUCH more expensive. I'd pay to have ESPN, I'd pay to have YES Network, I'd probably pay for MLB, NHL and NFL Networks. But I would not pay for some of the smaller network and definitely not for SNY. But it's casual fans that sometimes turn into avid fans or at very least, might go to a game or two during the season. But of those games are no longer available, what would even give someone the notion to go to a game? So by killing off easy access to game and making you have to pay extra to watch, you are killing off the casual fan. You'll have die hards who will pay to watch and you'll have the uninterested who will never watch and it will take the sport out of their consciousness. That's NOT good for the sport at all.
 

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The one issue I have with these streaming networks for sports is this. It's going to retard growth of these sports. When you have your RSN as part of a cable/sat/OTT (like DTV Stream) package, the casual fan, who might be flipping around channels, might stay to watch a game. Maybe they do this for more than one game. Maybe you might watch 20-30 games out of 140 or so televised baseball games. But to buy a network like Bally, or even a dedicated channel like Marquee (to the Cubs), more than likely to shell out the money, you are most likely more than a casual fan. So rather than have millions of potential viewers in a large metro area, you now are down to the core 200k or so. That's not a great way to promote your sport. And since I firmly believe that RSNs as we know them the ones that come with your cable / sat package will go the way of the dodo bird without 10 years, it's going to hurt interest in those sports they show. If I'm a causal fan, would I spend $20 a month to watch the games? Probably not. I'll just forget the sport and move on to something else.
Yeah, the RSNs clearly aren't for casual fans. And that's a big reason why casual sports fans (and total non-sports fans) have been leaving cable TV in droves for a decade now. They don't want to pay for those RSNs. (And in the case of non-sports fans, they don't want to pay for the ESPN channels either.)

Casual sports viewers like me are fine with just being able to watch the playoff/championship games, plus a smattering of nationally-featured regular season games, on major general-interest broadcast and cable channels (e.g. CBS, ESPN, TBS) and/or major SVODs (e.g. Apple TV+, Paramount+, Peacock). Of course, the NFL is the exception to that; given how few regular season games they play, combined with the popularity of the sport, all of their games air/stream on those same major general-interest outlets too. Even casual NFL fans will tune into some of those regular season games (at least if their local team is half-decent that season).

But for the other 95% of your local MLB, NBA and NHL teams' regular season games (i.e. the ones that aren't featured on a national broadcast from Fox, Apple TV+, etc.), you need your RSN. And if you're watching lots of those games, well, you're not a casual fan, you're a serious fan. So you're gonna have to pay up for that. Everyone needs a hobby, I guess, and hobbies cost money.
 

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The ESPN and RSN model has basically always been dependent on the "casual fan" paying for the service so the total cost can be distributed out among several customers at a lower price per customer fee. And now those "casual fans" are deciding that they don't want to pay for it.
Yep. And the more I've thought about it lately, the more I think that ESPN as we've known it will never really work as a standalone DTC streaming service. It's kind of caught in the middle between the general entertainment outlets that will get big popular games (e.g. popular sports' playoffs/championships + any NFL game) versus the RSNs, which cater to serious fans with the vast majority of popular sports' regular season games. I don't know why those won't eventually go DTC too, with the league/conference or individual team selling the service directly to fans as opposed to using a middle-man like Bally Sports. (In fact, this is what the MLB is trying to figure out right now.)

Furthermore, I don't know why major NCAA Div. I conferences won't also do DTC streaming too. There's already a precedent there with the Pac-12 doing their own dedicated cable channel. Why shouldn't the SEC, Big Ten, ACC, Pac-12 and Big 12 all join together to do the same thing for streaming? And if those guys all do it, I don't know why it wouldn't just end up being an entire NCAA app. Maybe you pay different prices for individual conferences or a higher price to get all the conferences. Anyhow, as I say, I don't know why they wouldn't do this rather than go through a middle-man, like ESPN, for a streaming service. (Currently, ESPN owns the SEC Network and ACC Network on cable while Fox owns the Big Ten Network. As I said, the Pac-12 owns their own Pac-12 Network.)

So where would this leave a streaming DTC ESPN service? Seems like it would just be a grab-bag of less popular sports, plus out-of-market games, plus maybe a mix of a few national games from major sports, e.g. Tues. night NBA, Monday Night NFL, U.S. Open tennis, etc. Along, of course, with a whole bunch of SportsCenter. So in other words, a lot like what ESPN+ currently is.
 

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Both ESPN and the RSNs currently have the economy of scale. Get 100 million (or your market's share of subscribers) and be happy with $8 per subscriber per month for the ESPNs or $3 per subscriber per month for an RSN. The income is there to pay the expenses and since subscribers don't have a choice which specific channels they pay for their only choice if they don't want to pay for ESPN or an RSN is to find a package that does not have the unwanted channel(s) - and usually is missing many other channels - or find a provider that doesn't have the unwanted channels.

The difference between ESPN and the RSNs is that ESPN is popular enough and can tie required subscription of ESPN with the the availability of all the other ABC/Disney channels. If a provider does not require their subscribers to subscribe to ESPN then that provider is unlikely to be able to offer any other ABC/Disney channels to their subscribers. Most RSNs don't have that leverage and even when Sinclair tried to use their popular local broadcast channels as leverage to force delivery of RSNs they failed.

I look at the current situation as a cold war between ESPN and the MVPDs they partner with. A hostile relationship to a certain extent. The MVPD is willing to bow to the pressure of putting ESPN in the base tiers knowing that they only have to compete with other MVPDs who are under the same restriction. The RSNs are currently offered the same way.

Sinclair wants to break that and give people the option of paying $20 per month or less to get their RSN content while not paying for the rest of the MVPD's content. If I were an MVPD my response would be "if you are going to let people pay for your channels without the rest of ours then you are going to let us sell our other channels without yours". The RSNs will be dropped at the earliest possible moment if the RSN launches a competitive service.

So now back to the math. When the RSN loses subscribers they still have to pay their multi-decade agreed rates to the teams. With less subscribers they need to charge more per subscriber. The thought of paying an RSN $3 or $6 goes away quickly as they start asking for $10 or $20 to break even.

Sinclair is taking a risk by offering their channels for $20 separate of a MVPD. DISH has already successfully walked away from Sinclair. Other MVPDs have also passed on the RSNs. They could find themselves with closer to zero subscribers.
 
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Both ESPN and the RSNs currently have the economy of scale. Get 100 million (or your market's share of subscribers) and be happy with $8 per subscriber per month for the ESPNs or $3 per subscriber per month for an RSN. The income is there to pay the expenses and since subscribers don't have a choice which specific channels they pay for their only choice if they don't want to pay for ESPN or an RSN is to find a package that does not have the unwanted channel(s) - and usually is missing many other channels - or find a provider that doesn't have the unwanted channels.

The difference between ESPN and the RSNs is that ESPN is popular enough and can tie required subscription of ESPN with the the availability of all the other ABC/Disney channels. If a provider does not require their subscribers to subscribe to ESPN then that provider is unlikely to be able to offer any other ABC/Disney channels to their subscribers. Most RSNs don't have that leverage and even when Sinclair tried to use their popular local broadcast channels as leverage to force delivery of RSNs they failed.

I look at the current situation as a cold war between ESPN and the MVPDs they partner with. A hostile relationship to a certain extent. The MVPD is willing to bow to the pressure of putting ESPN in the base tiers knowing that they only have to compete with other MVPDs who are under the same restriction. The RSNs are currently offered the same way.

Sinclair wants to break that and give people the option of paying $20 per month or less to get their RSN content while not paying for the rest of the MVPD's content. If I were an MVPD my response would be "if you are going to let people pay for your channels without the rest of ours then you are going to let us sell our other channels without yours". The RSNs will be dropped at the earliest possible moment if the RSN launches a competitive service.

So now back to the math. When the RSN loses subscribers they still have to pay their multi-decade agreed rates to the teams. With less subscribers they need to charge more per subscriber. The thought of paying an RSN $3 or $6 goes away quickly as they start asking for $10 or $20 to break even.

Sinclair is taking a risk by offering their channels for $20 separate of a MVPD. DISH has already successfully walked away from Sinclair. Other MVPDs have also passed on the RSNs. They could find themselves with closer to zero subscribers.
Yep, pretty much agree with all of what you're saying. Which is why I can't see ESPN ever making sense as a standalone DTC service. The RSNs, yes. They're catering to a certain kind of consumer: big fans of specific major-league teams. Those folks may well be fine with paying $20/mo (or less if they buy it by the year). But if ESPN didn't have the benefit of all those basic cable subs subsidizing it, then obviously they have to hike the price as a standalone service. And who are they catering to? People who are really into a grab-bag of a little of this sport, a little of that sport, a lot of niche sports, plus SportsCenter (which, let's face it, talk is cheap -- CBS Sports HQ offers that kind of content for free).

And, yes, the exact thing I've been saying will happen the next time MVPDs have to renew their distribution contract with Bally Sports is that they will insist on just selling it a la carte, as an optional add-on to any base package, the same way they already sell HBO/HBO Max. It'll probably work the same way, where you pay the same price either way you get it; if you buy it through the MVPD, you get the live RSN(s) in your channel guide plus you get access to the separate Bally Sports app. If you buy it DTC (not through an MVPD), you just get the app. Once that happens, then yeah, the total number of RSN subs can only decrease because there are still a good number of folks on Comcast and Charter who pay for their RSN even though they don't watch it. Neither MVPD has a mainstream channel package like DTV's Entertainment that excludes the RSNs. So once the overall sub number goes down, we might well see the price for Bally Sports jump from $20 to $25 or even $30. Pro sports seems like a bubble ripe for bursting. We'll see...
 

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Godfather
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The ESPN and RSN model has basically always been dependent on the "casual fan" paying for the service so the total cost can be distributed out among several customers at a lower price per customer fee. And now those "casual fans" are deciding that they don't want to pay for it.
So much for being at a wine tasting (Blackbird Vineyards)…

How is this any different than the model for most other cable networks? Maybe 1/2 of the networks in my guide are hidden. Another block is moved down to the bottom of the guide and I rarely scroll down that far. Frankly, I could live with only a handful of channels from maybe two or three companies. I’d definitely drop MVPDs for the right business model in a heartbeat.

I’m something of what you’d consider a casual fan… I may watch 3 or 4 soccer games a week. I have been watching the NHL playoffs because of one team. I know of people that watch just about every soccer game across multiple leagues (those are super fans, I guess). I can’t imagine a casual fan that doesn’t watch a few games a week.

If you are a casual MLS or NHL fan, ESPN+ is worth its weight in gold for out-of-market. For EPL casual fans, $5 per month for Peacock is a bargain.

I mentioned above, $20/market for in-market MLS teams and the rancor it raised. I don’t expect Sinclair to be successful, but that isn’t because fans won’t support thier team. It’s because the business model sucks.


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Godfather
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I look at the current situation as a cold war between ESPN and the MVPDs they partner with. A hostile relationship to a certain extent.
I think MVPDs lose this war. Not because I think ESPN is going to win… I think the MVPD business model is outdated and is losing to a bigger trend of streaming. ESPN (well Disney) will emerge successful in the end, because they have money to ride out the storm. But, we are in for a decade of flux as this market figures itself out.

Yet, I can’t help think the the future will look like a lot like the present.


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Godfather
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So now back to the math. When the RSN loses subscribers they still have to pay their multi-decade agreed rates to the teams. …

Sinclair is taking a risk by offering their channels for $20 separate of a MVPD. DISH has already successfully walked away from Sinclair.
I think this ends in bankruptcy. I’m just not sure whose, or whether it won’t be both…

The one thing I expect is that someone will be playing baseball at the end of the day. Hopefully, it isn’t just Benjamin Sisko.


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How is this any different than the model for most other cable networks?
Most other cable networks are cheap. 50c per month would be considered expensive for a non-sports channel. While the dimes add up to dollars, $3.60 per year for a channel you "never watch" slips under the radar a lot easier than $36.00 per year. If you look at vMVPD services offering the linear channels one can get on cable/satellite they are carrying the same groupings of less expensive non-sports channels.

I think MVPDs lose this war. Not because I think ESPN is going to win… I think the MVPD business model is outdated and is losing to a bigger trend of streaming. ESPN (well Disney) will emerge successful in the end, because they have money to ride out the storm. But, we are in for a decade of flux as this market figures itself out.

Yet, I can’t help think the the future will look like a lot like the present.
The subscribers will lose. If you look at the 200+ channel subscription packages MVPDs provide it is easy to list 100 channels that you never watch. Drop them all and theoretically you could reduce bills by up to $50. But the "never watch" channels vary by subscriber. There is a good chance that when the MVPD model dies it will take several channels you do watch with it.

The present still has solid support for the MVPD model. We are starting to see expensive streaming packages that provide access to a second tier of popular programming but most channels are relying on the MVPD model to provide them with 80 or 100 million subscribers paying a few dollars a year instead of super fans willing to pay a few dollars per month.

On the current path the future will certainly be different with less channels and more libraries. Subscribe and watch 20 years of old content along with a few popular shows. Add a second service to watch their 20 years of old content and their handful of popular shows. $5 per month for each service works today because the content owners are underwritten by their MVPD source of income. Take away the MVPDs and the content owners will need to rely only on their super fans willing to pay for their content. So expect to be paying $10 or $15 per month for each service and subscribe to multiple services to get all the popular content. Spend $100 per month and end up with less available new content than you have through the MVPD model (but you'll get the 20 year library of stuff you will never watch).

I think this ends in bankruptcy. I’m just not sure whose, or whether it won’t be both…
Sinclair has their broadcast stations to fall back on. if the RSN investment doesn't work out they will get it off of their books somehow. DISH is still doing well without RSNs ... and if RSNs leave the MVPD model then there is no longer any stigma to being an MVPD without RSNs.

I have two expectations of Sinclair's offering. The first is that Sinclair will lose required tier MVPD distribution if they don't provide a deep discount to MVPDs that put their channels in a required tier. The second expectation (more of a hope) is that Sinclair will partner with the MVPDs to bundle their new OTT service with the MVPD service.

Add Bally Sports to your DISH subscription for $16 per month - the same price you would pay if buying direct but no streaming needed to watch linear content (and no streaming delays). DIRECTV could drop Bally Sports from their required subscription tiers. This would match the HBO model NashGuy mentioned above. DISH publicly made this offer to Altitude Sports (offering to carry the channel with no markup to any subscriber willing to pay the price the channel wanted - Altitude sets the price and only willing subscribers pay).
 

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I think we are in the biggest broadcast upheaval since the early 1980s and the advent of the cable channel and everyone is trying to figure out how to best monetize everything right now. First, up until 10 years ago or so, the leverage was all with the cable/sat companies. For your network to be seen, you needed them to carry you. Sure, some REALLY popular networks, ESPN, HBO, some very popular RSNs would fight them because people had the option to leave if they cannot see those channels, but mostly the held most of the cards. Streaming changed all of that. Streaming originally had a couple of major players, but in reality they were just another content provider, like a Sat or cable company. To me CBS (Viacom) changed the whole landscape when they decided to go there own way and create their own streaming service. Now they ALL have their own. That killed the leverage these cable companies had, because these networks could now say, screw it, you don't want to carry our channel, we'll just stream the content. And that's what has started to happen. Peacock, Disney/Hulu/ESPN, HBO and others have since followed suit and people have realized, we don't even NEED cable/Sat anymore, we can skip it and watch what we want when we want. And not these streamers have realized, that advertisers will pay too. AND we are now seeing new players who are entering the same purvue that the cable companies have had a stranglehold on, YouTube TV, Fubo and Hulu Live are prime examples (DirecTV was smart to see this early on, but have had issues with pricing the service correctly). So, now we see Comcast getting into the game, and others will follow. In ten years, streaming will look a lot like cable, and I imagine, like any mature business there will be a LOT of consolidation.

But with all of this, the cable/sat model that we've had since the 1980s is dying, and soon to be dead. I know a lot of folks here are die hards, and want to hold on to what they got. Heck, I still use DirecTV as my primary service, but I'm also not naive enough to realize that it's likely not a long term solution (and my hope is that when my contract ends, the streamers will give more or what I want). Yes, I know about internet issues and outlying areas where streaming is not feasible, but that's today. There was a time when electricity wasn't pervasive either. Times change.

Getting back to the topic, the natural progressinon will be, for sports and RSNs especially to sell DTC for a fee, and that will be the end of RSNs on cable/sat eventually. It might not be in the next 2-3 years, but I think in 10, that will be it. We already are seeing lots of forays into streaming by the major sports leagues. They are testing the waters, and once they find that people are watching that way, it will be all over. I remember people getting really angry when MNF moved to ESPN...to CABLE!! Now? Nobody cares. And nobody will care that it moved to streaming either, eventually, especially as old codgers like myself die off (or more accurately are no longer in the core demo advertisers want to sell to).
 

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On the current path the future will certainly be different with less channels and more libraries. Subscribe and watch 20 years of old content along with a few popular shows. Add a second service to watch their 20 years of old content and their handful of popular shows. $5 per month for each service works today because the content owners are underwritten by their MVPD source of income. Take away the MVPDs and the content owners will need to rely only on their super fans willing to pay for their content. So expect to be paying $10 or $15 per month for each service and subscribe to multiple services to get all the popular content. Spend $100 per month and end up with less available new content than you have through the MVPD model (but you'll get the 20 year library of stuff you will never watch).
Uh, have you watched cable TV in the past few years? Because pretty much all those channels do is endlessly air reruns (i.e. library content + repeats of recent premiers) with very little of their schedules devoted to fresh premier content. Among the new never-before-seen stuff they do air, the vast majority of those hours fall into one of two categories: news/talk or live sports. So all that to say, I'm not sure we see any less new content on a weekly basis once the entire system (including news/talk and sports) has fully migrated from MVPD to DTC. Maybe a little less, but not drastically so.

Once this migration has finally played out, each DTC SVOD will basically be like buying just that media group's set of cable channels. Disney+ will contain all the content from ABC, Disney Channel, Disney XD, FX, FXX, Freeform, Nat Geo, etc. (For reasons I've expounded above, I don't see all the ESPN content making its way into the DTC model; maybe a sprinkling of the most popular, or most affordable, goes into Disney+ and the rest gets absorbed into team/league/conference-specific DTC services?)

Likewise, HBO Max will contain all the content (including sports and news) from those Warner Bros. Discovery nets: HBO, TBS, TNT, CNN, Discovery, HGTV, Food, TLC, Cartoon, TCM, etc. Same for Paramount+ and Peacock (should they survive). The little AMC group of cable nets is already making all their content available through their ad-free DTC SVOD called AMC+. That one is definitely not big enough to survive long-term, which is why everyone knows AMC is aiming to get acquired by a bigger group. Same fate awaits other little channel groups like Hallmark/Crown Media and A+E Networks. (Well, it's also possible that, after the MVPD system dies in the 30s, those small media groups like Hallmark -- or even mid-sizers like Paramount -- continue to exist solo and simply make and license their content out to multiple third-party SVODs, with a couple series on Netflix, another series on Disney+, holiday movies on HBO Max, etc.)

Of course, there's a good amount of new original content that each media group reserves just for their DTC SVOD and isn't putting on any of their linear channels. For WBD, it's their Max Originals on HBO Max. (Note WBD just announced that TBS and TNT will see no new scripted series going forward. Makes sense, as those resources are going into Max Originals.) For Disney, it's their Disney+ Originals and Hulu Originals.

In his recent quarterly earnings call, Ergen had to admit and explain some surprisingly poor numbers for Dish and Sling. And he chalked those up, at least in part, to broader problems that exist with the current MVPD content model. "We think we can make our product better with the help of our content providers," he said. Not really sure what he has in mind there but I do know that Dish has been a leader in the past in terms of trying to offer more flexible, cheaper channel bundles, e.g. Flex Pack (a move later emulated by the likes of Charter Spectrum TV, Comcast Xfinity TV, and Verizon FiOS TV).

Perhaps we'll see him ask the content providers to allow Dish to just sell bundles of their own cable channels (which would unavoidably also include any broadcast network O&Os the provider owns in select major markets). For Disney, that would definitely include the ESPN channels, making their channel pack the most expensive -- in my mind, they might be the most resistant to this idea. But what if each channel pack also included the relevant DTC? Buy the package of Disney-owned channels and also get the Disney Bundle with ads (normally $14/mo for Disney+, Hulu and ESPN+). Buy the package of Paramount-owned channels and also get Paramount+ with ads (normally $5/mo). Buy the WBD bundle of channels -- which would unavoidably include HBO -- and get HBO Max with ads (normally $10/mo). Any of those apps could be upgraded to ad-free for an up-charge. And as Dish already offers, you could buy a package of just your locals separately for (IIRC) $12/mo. (or instead integrate them via OTA antenna for free). Let each content owner set their own price with Dish adding a standard % on top for distribution and support costs plus profit. Of course the total price, if you purchased all those channel packs, would cost more than the current system. But the consumer would also be getting more total content (all that stuff exclusive to the DTC apps, e.g. Disney+ Originals, the ESPN+ content, etc.). And, critically, there would be greater choice.

Doesn't it seem like that scenario is the logical next step as the MVPD system evolves into the DTC system? The lines between linear and SVOD will increasingly blur, I think, as the latter swallows the former.
 
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