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The good news is we only have a few more months to look. The final DIRECTV exclusive season starts soon. I expect an answer before the end of the season.
Yep. I expect DirecTV will once again this summer/fall do at least limited advertising for the service tied to the free, exclusive NFLST offer. It's quite possible that that will be the last marketing campaign ever done for a DirecTV-branded residential satellite TV service. We'll see...
 

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Beware the Attack Basset
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It doesn't seem reasonable to view NFLST as a loss leader for Apple as it was with DIRECTV.

Not having auditioned AppleTV+, I have to wonder if their "trick play" implementation is up to the task.
 

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From the article ---
At Kagan, the media research unit of S&P Global Market Intelligence, research director Deana Myers believes the subscriber tally for Sunday Ticket is “well below” 2 million, and while she sees the package having some benefit to streamers, don’t count on it being too dramatic.

“I think getting Sunday Ticket would likely put Apple TV Plus on the map, but not to the degree that it did for DirecTV,” Myers wrote in an email message. “Sunday Ticket’s value for DirecTV was that it drew a lot of really high-end subscribers who would sign up for the top packages. In the old, successful pay TV world that worked, but it loses a lot of money today for them. Apple could gain subs, they have the cash for such a deal, they have been buying a lot of sports rights and it could help them with their main goal of selling more devices.”
 

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It doesn't seem reasonable to view NFLST as a loss leader for Apple as it was with DIRECTV.

Not having auditioned AppleTV+, I have to wonder if their "trick play" implementation is up to the task.
No slow-mo in the Apple TV app (or in streaming apps generally). But otherwise, trick play in live streaming apps can be pretty great. Peacock has it down pat. I haven't watched enough live MLB on Apple TV+ to recall how well they handle it yet...
 

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Looks like Disney is rethinking plans to bring the entirety of ESPN direct-to-consumers via a standalone streaming service.


Doesn't surprise me. For one, everyone is still (wrongly, IMO) freaking out a bit over Netflix's recent stumble seeing a net loss in global subs. But second -- and this very much is a real problem for Disney -- there's the question of how they could package and price all that ESPN content in a way that it could ever come close to bringing in as much profit as it has historically enjoyed by being part of the traditional cable bundle, where every cable TV sub in the nation pays for ESPN whether they want it or not. Once you break it out and make it optional, obviously a whole lot of Americans will choose not to pay for it.

But, sooner or later, direct-to-consumer streaming WILL fully replace and kill off the old commingled cable bundle system. It's just a question of how long it takes. I suspect that the best hand Disney has to play may be to either sell/spin off ESPN completely.

Second option would be to incorporate their most popular sport rights (e.g. NFL/Monday Night Football, College Football Championship, PGA Championship, Wimbledon, US Open, plus some or all of their national regular season MLB, NBA and NHL games) into a super-sized Disney+ which would at that point have swallowed Hulu to become Disney's full-on replacement for their core basic cable bundle with a variety of popular content aimed at young kids to adults.

But that would still leave a lot of their current sports rights outside of Disney+, mainly college sports. So they would offer one or more NCAA sports standalone DTC apps focused on SEC, ACC, Big 12, etc. football and whatever other college sports they hold the rights to. And then whatever other sports they have that don't go into either of those (e.g. a lot of the stuff currently in ESPN+) becomes a DTC "hodge-podge" standalone DTC sports app (probably still called ESPN+). And obviously, any of those separate sports services could be added to Disney+ at a discount with all that content integrated into that one app if the consumer chooses.

If Disney goes this route, they will need to think carefully about which sports contracts they bid on going forward and perhaps even whether they might sell off some of their current rights to try to slim down their portfolio. Maybe they decide they want to put all their national MLB games in Disney+ but try to sell their rights for national NBA and NHL games back to those leagues or to other companies (e.g. Apple, Amazon, Netflix, etc.). I'd also point out that they might retain traditional broadcast rights for a particular sport so that it can still air on their traditional ESPN and ABC linear channels while not holding the streaming rights for it.

The bottom line, I suspect, is that ESPN's most profitable "glory days" are behind them. It's going to take awhile for that fact to sink in for Disney leadership and shareholders. The same, I'd say, is true (for somewhat different reasons) of CNN. And it's not coincidental that ESPN and CNN are the two original core pillars of the cable channel bundle which is now unraveling.
 

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Beware the Attack Basset
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Deanna Myers said:
Apple could gain subs, they have the cash for such a deal, they have been buying a lot of sports rights and it could help them with their main goal of selling more devices.”
I'm not convinced that selling AppleTVs is the main goal of Apple's sports efforts. If, as used to be the case, they didn't offer apps for third party devices and TVs, this reasoning may hold but given that they do offer apps on most platforms, I don't see this as a tool for selling Apple hardware. I think Apple wants to be a contender in the sport streaming marketplace -- a market that they may be ill-prepared to serve.
 

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Beware the Attack Basset
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Looks like Disney is rethinking plans to bring the entirety of ESPN direct-to-consumers via a standalone streaming service.
I think Disney is all too aware that sports can be a very seasonal thing and streaming is very sensitive to such things. They need something that is going to keep subscribers on the teat year-round.
 

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I think Disney is all too aware that sports can be a very seasonal thing and streaming is very sensitive to such things. They need something that is going to keep subscribers on the teat year-round.
That's the problem with all content on streaming services, though. There's zero friction to drop and add any streaming service on a monthly basis. The only viable solutions, I think, are to have a variety of compelling content (including select popular sports) year-round, and spread it out week-by-week rather than doing Netflix-style full-season dumps that can be binged in a weekend. And second, offer discounts for subscribers who pre-pay the provider directly for a full year of service. Can't leave at that point, plus they're not having to give a cut of the fee to an app store middle-man biller like Apple, Google, etc.
 

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The bottom line, I suspect, is that ESPN's most profitable "glory days" are behind them. It's going to take awhile for that fact to sink in for Disney leadership and shareholders. The same, I'd say, is true (for somewhat different reasons) of CNN. And it's not coincidental that ESPN and CNN are the two original core pillars of the cable channel bundle which is now unraveling.
Sports are still immensely popular, and people will pay to watch them. I wouldn’t worry too much about ESPN.

I think Disney is all too aware that sports can be a very seasonal thing and streaming is very sensitive to such things. They need something that is going to keep subscribers on the teat year-round.
Seasonality is a feature, not a bug. People who grow up playing sports are well aware of seasonality… football in the fall, basketball in winter, and on to baseball for the spring/summer.


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Beware the Attack Basset
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Seasonality is a feature, not a bug. People who grow up playing sports are well aware of seasonality… football in the fall, basketball in winter, and on to baseball for the spring/summer.
That's great for the consumer but the content providers need a steady income and streaming is just too easy to drop.
 

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Sports are still immensely popular, and people will pay to watch them. I wouldn’t worry too much about ESPN.
Yes but will they pay the full price now that charging people that don't watch sports is going away?
Consumers are going to get sticker shock when ESPN unbundles from the MVPDs. ESPN gets a lot of income from non-viewers who are forced to buy ESPN as part of their basic package. Once only the people who want ESPN have to pay for the channels ESPN will need to figure out how to collect enough revenue to break even or cut costs to match their income. ESPN will stay in a MVPD bundle as long as possible.

That's great for the consumer but the content providers need a steady income and streaming is just too easy to drop.
They simply need to get enough sports so there is something on their channel in every season. The other streamers probably should do the same. Fight the binge by not dumping entire seasons of a show at the same time and expiring off content. Encourage subscribers to stay by not having months that could be skipped and made up later (with the streamer losing income for months not subscribed).

Apple (or another provider) could use regular priced Sunday Ticket to get viewers comfortable with streaming. Since there is no $2000+ commitment to signing up for streaming I do not expect ST to be given away for free like DIRECTV did.
 

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Consumers are going to get sticker shock when ESPN unbundles from the MVPDs. ESPN gets a lot of income from non-viewers who are forced to buy ESPN as part of their basic package. Once only the people who want ESPN have to pay for the channels ESPN will need to figure out how to collect enough revenue to break even or cut costs to match their income. ESPN will stay in a MVPD bundle as long as possible.
Or ESPN (and others) could do something unheard of, and that would be to bid lower for content. If the true cost of a service is so high that they can't attract enough customers, then they have to cut costs somewhere. I don't think that Sinclair can get enough subscribers to their stand alone RSNs to make money. And I don't see ESPN or Fox Sports being able to charge that kind of money and be successful either. The ever rising payouts for sports (or all entertainment) will have to plateau if people balk at the prices. That's why people are leaving cable in the first place.
 

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Godfather
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Consumers are going to get sticker shock when ESPN unbundles from the MVPDs. ESPN gets a lot of income from non-viewers who are forced to buy ESPN as part of their basic package. Once only the people who want ESPN have to pay for the channels ESPN will need to figure out how to collect enough revenue to break even or cut costs to match their income. ESPN will stay in a MVPD bundle as long as possible.
This is an old trope. It really isn’t true.

ESPN in the bundle is important to Disney, but it’s more important to the MVPD. Over 1/3 of MVPD subscribers watch ESPN at least once a week. It is also the most watched channel in prime time for 18-49 year olds, and second most watched cable channel overall. What happens to cable if they drop ESPN?

ESPN isn’t the problem with the bundle, and ESPN will do fine if MVPDs decide to drop them. For ESPN, they probably need a fee of $20 per month to match revenue lost from cable to total DTC model. A significant number (maybe 1/3?) of MVPD subscribers could drop the MVPD subscription, get ESPN DTC and save a lot of money.

The problem with the bundle is the 80+ channels that cost $0.10 to $0.50 per month that get watched by well less than 5% of the subscriber base. Most customers won’t miss these channels, yet they are still around. The cost of those channels that I never watch is more than twice the cost of ESPN.

Those are also the channels that wouldn’t survive outside the bundle. I doubt a stand alone Hallmark channel (around top 10) could survive in a DTC model. Imagine how IFC, Logo, or BET would fare?


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Beware the Attack Basset
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Over 1/3 of MVPD subscribers watch ESPN at least once a week. It is also the most watched channel in prime time for 18-49 year olds, and second most watched cable channel overall.
While there may be statistics that show this, I'm not buying it. The first problem is that the sample set is those who subscribe to MVPDs which is less reflective of the reality of modern TV viewing with every passing month. If 67% of those who "subscribe" aren't watching, that supports the idea that people probably wouldn't otherwise subscribe.
 

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Godfather
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While there may be statistics that show this, I'm not buying it. The first problem is that the sample set is those who subscribe to MVPDs which is less reflective of the reality of modern TV viewing with every passing month. If 67% of those who "subscribe" aren't watching, that supports the idea that people probably wouldn't otherwise subscribe.
The big statistic is that people watch fewer than 20 of the 65/85/100/130/140+ channels in their cable package. This is the underlying problem. People don’t see the value of these packages. They use very little of them.

Right now, there are over 20 million ESPN+ subscribers. That’s just under 1/3 the current pay TV subscriber count.

It’s hard to drop cable if you watch ESPN on a regular basis. All of the games on ESPN require authentication to watch in the ESPN app.

ESPN is one of the reasons people are keeping MVPD subscriptions, for now. What other network on an MVPD can the same be said of?


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