and increased content costs.
http://www.wsj.com/article_email/es...t-mounts-1436485852-lMyQjAxMTA1MjEzMDkxMjAwWj
http://www.wsj.com/article_email/es...t-mounts-1436485852-lMyQjAxMTA1MjEzMDkxMjAwWj
ESPN belt tightening due to cord cutting..........
- Thread starter Ty Webb
- Start date
I truly haven't watched ESPN in years. Except for the random college football game, I never go to that channel. Sports Center is now complete garbage (God, you remember in the 90s and early 2000's going to school and work and everyone talking about, "You see SC this morning!?" I miss a true sport recap channel).
I hope ESPN folds. They destroyed the Big East. It was a fantastic conference.
I hope ESPN folds. They destroyed the Big East. It was a fantastic conference.
I saw that article this morning. Looks more like they're cutting costs around the periphery like talent but I don't expect it to affect content costs short term. I still think there's value in quality content that people want to see, it's the "excess content/minutiae" that gets hit in terms of value.
Sports is the last programming where the viewers really want to see events live. Everything else can be watched later, and it is often more enjoyable to be able to do so because you can skip commercials and watch your shows at your convenience in less time with less interruptions.
I never watch SportsCenter anymore, but do watch live sports programming on ESPN. SportsCenter was awesome in the 90s. Back then, it seemed more like a sports news program rather than just a cheerleading arm for the sports it broadcasts. I never watch Baseball Tonight now, I get all of my MLB coverage from MLB Network.
Interesting item in the article: ESPN used to devote 4 minutes of air time per NBA finals broadcast to promote the ABC fall lineup. This year, that was cut back to 1 minute per game to get more ad revenue from other sources, and apparently ABC executives were very unhappy about that. As a viewer, I hate the cross-programming tie ins. I don't need to see a shot of some actor or actress in the stands and hear the announcers tell me all about his/her upcoming new series to be shown on a sister network.
I never watch SportsCenter anymore, but do watch live sports programming on ESPN. SportsCenter was awesome in the 90s. Back then, it seemed more like a sports news program rather than just a cheerleading arm for the sports it broadcasts. I never watch Baseball Tonight now, I get all of my MLB coverage from MLB Network.
Interesting item in the article: ESPN used to devote 4 minutes of air time per NBA finals broadcast to promote the ABC fall lineup. This year, that was cut back to 1 minute per game to get more ad revenue from other sources, and apparently ABC executives were very unhappy about that. As a viewer, I hate the cross-programming tie ins. I don't need to see a shot of some actor or actress in the stands and hear the announcers tell me all about his/her upcoming new series to be shown on a sister network.
Its going to be very interesting going forward.
Lets assume most pepole dont really care about the non-live sports content. Its nice, but how many people are really tuning in fot Around the Horn or Collgee Football Live as anything but to fill time?
So ESPN will rise or fall based on its live sports (just like all of the other networks.) The the question is - is it better to be an aggregator of content, or an originator. Right now aggregation rules because access is still limited. In the future that might not be the case - each league might have its own online presence that carries most if not all of its live programming. On the other hand, one could imagine that in the pay per channel world - lots ofpeople would pay to have access to the best of all the college football conferences, and not be concerned about losing the 2nd and 3rd tier games.
In other news, their new website kinda blows too. Hard to navigate around that place when looking for particular information.
You guys can certainly speak better on this than I can but wasn't the real goal of the BTN to get to a point where they were on a basic cable package or bundled with other sports stations so you would essentially have people paying for it who want it but also people paying for it that don't necessarily want it or need it?
If people start unbundling and cable companies start going ala carte, how do content specific networks like the SECN, BTN, even places like Golf Channel and ESPNU survive?
The same way HBO does. By charging fewer people lots more money.
But its all relative. The Big Ten and SEC are still the most popular conferences with the biggest footprints. If conference networks have reduced revenue, then it will hurt them some, but not as much as the PAC12 - who is less popular.
Rutgers did luck out though. A decade from now, the model which you talked about might nto be viable, and thus Rutgers wouldnt be a viable addition with our current popularity.
"wasn't the real goal of the BTN to get to a point where they were on a basic cable package or bundled with other sports stations so you would essentially have people paying for it who want it but also people paying for it that don't necessarily want it or need it?"
And there lies the CENTRAL issue. The last decade all these new networks relied on getting grandma and my mom to pay for it even though they never watched.
In the long run - Payout/Earnings/TV Revenue is going to be lower, much lower than right now, IMO. TV money has should peek very soon, again, IMO.
I still think that if channels are unbundled from today's model, it will be by owned families of channels, for example, BTN will still be bundled with FS1, YES, Fox News and any other Fox station. It just wouldn't be tied to also having to subscribe to ESPN, CBS, NBC etc. families/networks. Yes, the consumer will be charged more per family of channels since they can opt out of other content. That is a path toward complete a-la-carte of which some may see as a step in the right direction until such time they want to watcha channel that they don't subscribe to. However, the Cable Providers and Netowrks have full intent of continuing to grow revenue and they'll figure out how to achieve that. Of course, it's all a guess of where this is headed. One day we may have a-la-carte via different distribution methods and wish for the days when all channels were bundled
Here we go
Sanders, Warren want probe into 'ridiculous' cable, Internet prices
http://thehill.com/blogs/floor-acti...ant-probe-on-ridiculous-cable-internet-prices
Sanders, Warren want probe into 'ridiculous' cable, Internet prices
http://thehill.com/blogs/floor-acti...ant-probe-on-ridiculous-cable-internet-prices
The difference is the other channels aren't extorting $6.61/month from subscribers. Based on the 3.2 mm subscribers ESPN lost in the last year, that's $250 mm in lost revenue. Probably a larger amount than the entire budgets of the other sports networks. They'll be able to adapt better because they're not as bloated as ESPN.
I think ESPN lost it's way when they went from reporting sports to personality based reporting.
There was a time when it seemed they couldn't go 5 minutes without mentioning the latest on Favre, Lebron, or Kobe. "The decision" may have been the all time low.
There was a time when it seemed they couldn't go 5 minutes without mentioning the latest on Favre, Lebron, or Kobe. "The decision" may have been the all time low.
The newspapers and magazines couldn't figure it out. Personally, I think cable television will be the next victim of the internet. There's already a growing shift away from cable. Look no further than to your average 10 year old. Give them an iPad with YouTube and sit them in front of the TV. To raise the stakes, put on a TV show they like. It won't take long before they're watching YouTube. There's a reason why a somewhat entertaining YouTube personality made $7M in 2014 (see PewDiePie). Add to that other online content that rivals anything the networks put out (i.e. House of Cards, Orange is the New Black, etc.). As online content continues to get better, the future prospects of cable and the networks get bleaker.
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As a subscriber to Time Warner, I would switch in a nanosecond to something better if I could. But, I don't really hear anyone else around me who is all that happy with what they have either.
I finally blew a gasket after seeing my bill blow up over 70% in seven years without any significant improvement in either quality or programming. So, after going into the local TW office and holding up a DISH ad, they pretty much "re-bundled" me back to what I was paying almost 7 years ago! When I told them I thought their business model was lousy since you just paid more unless you came in and renegotiated your bill, she said that I was not doing that , just rebundling. What a crock!!!!
I am all for just getting and paying for what I want to watch.
I finally blew a gasket after seeing my bill blow up over 70% in seven years without any significant improvement in either quality or programming. So, after going into the local TW office and holding up a DISH ad, they pretty much "re-bundled" me back to what I was paying almost 7 years ago! When I told them I thought their business model was lousy since you just paid more unless you came in and renegotiated your bill, she said that I was not doing that , just rebundling. What a crock!!!!
I am all for just getting and paying for what I want to watch.
Oh they'll continue milking the sports fans until the very last drop and when that's dried up they'll morph into different marketplaces and with different technologies to continue revenue growth. No different than what the telecom companies did when the hard wired telephone business dried up. These Cable Providers are cash rich and have no intention of going the way of the solely newspaper businesses.
Where is there a more progressive organization than Disney? They outsourced their contact centers but made the existing agents train their replacements before they were shown the door..
Hey There! Hi There! Ho There! You're as Welcome as can be!
PTI is one of the highest rated daytime shows on ESPN...averages about 900,000 viewers (believe double that DVR).
PTI's ratings go up once NFL season starts.
PTI even drew larger audiences for ESPN compared to their Live Wimbledon coverage.
Around the Horn usually is in the 600,000 viewer slot...both shows are profitable for ESPN...as they have to show something.
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My prediction is that the providers will soon make you pay for a cable subscription in order to activate internet service, like some are starting to do with phone services. With Verizon, you can't open a new account with internet unless you also pay for their phone service. If they don't make it mandatory, they incentivize paying for the outdated phone service by making the price for only internet higher. The problem is that there is virtually no competition between these companies. Instead of competing with each other, they agree not to invade on each other's turf so that most people have only one choice of cable provider unless they go to satellite. This lack of competition hinders innovation and allows them to force us to buy these outdated technologies in order to get internet since there is virtually no alternative to the cable company's grip. My roommate and I are dropping our DirecTV subscription on Sunday because it has gotten too expensive to the point where it isn't worth what we are paying. Fortunately for now at least, we can still get internet on its own from Optimum.
Point still stnads - the real money is in the actual sports. PTI and ATH arent going to cut it if they are showing AAC FB on Saturdays because the P5 leagues all have their own distribution channels.
I read ESPN charges cable companies over $6 per subscriber to be carried on basic cable. I think the next closest to that price is like $2. Plus, ESPN is bundled with their other channels and that probably represent a nice piece of change on your monthly cable bill. Perhaps, ESPN own greed is killing the goose. They sure as heck don't respect other networks or cable companies as they attempt to bully them. It could be a unique situation for ESPN based on how they conduct business.
Huh?
Everyone knows LIVE SPORTS (especially football) attracts strong ratings for ESPN Networks...but there usually aren't NFL or College Football Games played during weekdays from most of January thru end of August...hence why ESPN has some "cheap" daytime shows...which some of them (i.e. PTI, etc...) still attracts a profitable audience (advertisers).
Wake me up when ESPN Networks lose all of their P5 TV Contracts.
I think the whole "cord cutting" thing is overblown. Most people who say they are cutting the cord aren't really. They still have the cord, but are only changing what goes over the cord. For the most part, all internet service is offered by the same companies that provide cable TV services. Companies like Comcast and Verizon may need to adjust their business and pricing models. But they will still be providing the same cords, and making the same money.
Also, content providers (e.g., sport leagues or programming producers) won't suffer, other than some growing pains adjusting to the new business/pricing models from the internet/cable companies. At the end of the day, content is king. If you have content that people want to watch, then you have a product to sell.
The companies that can suffer are the intermediaries. These are the channels that don't produce enough original content (or don't produce content that enough people want to watch). The days of shuffling the same content over 4 or 5 similar spinoff channels may not be sustainable. For ESPN, that might mean they need to consolidate or eliminate channels like ESPN News or ESPN Classic.
Also, content providers (e.g., sport leagues or programming producers) won't suffer, other than some growing pains adjusting to the new business/pricing models from the internet/cable companies. At the end of the day, content is king. If you have content that people want to watch, then you have a product to sell.
The companies that can suffer are the intermediaries. These are the channels that don't produce enough original content (or don't produce content that enough people want to watch). The days of shuffling the same content over 4 or 5 similar spinoff channels may not be sustainable. For ESPN, that might mean they need to consolidate or eliminate channels like ESPN News or ESPN Classic.
I agree with this. Take NBCSN for example. Currently they make a small fraction of what ESPN does per month, so that means a future monthly subscription price for NBCSN would be a small fraction of what ESPN will need to charge as well. In addition they have acquired the rights to sports that have tiny audiences relative to ESPN (NHL, EPL, Nascar, IndyCar), but many of these sports have long seasons and dedicated fanbases. Meanwhile, if you are not a basketball fan (like myself) there is no reason to subscribe to ESPN for half of the year.
ESPN has perfected life under the bundled cable model, and NBCSN may look like a failure in current comparison, but NBCSN seems better positioned to be successful (on a smaller scale) in the next model while ESPN is in real trouble.
Completely agree with you and have said the same in the past. Unless you're really trimming down how much you watch, I don't think most will save much if any money at all and quite possibly could be paying more for less. I don't see myself switching to a la carte in the future because I don't think I'll get a much better deal. Honestly, the biggest thing I hate about the cable companies is the boxes necessary ever since the switch to digital from analog. No such thing as "cable ready" tv that you can just put the coax in and watch without the box. Just getting rid of the boxes alone would trim 30-40 bucks/month off my bill.
If you don't watch tv and instead stream Netflix, Hulu or what have you, who's controlling the broadband? The same cable companies. So you choose an a la carte then they'll just charge you more for the broadband and may charge by usage like the cell phone companies use to do with minutes and now do with data. Or maybe they "choke" down your broadband after a certain point and you have to pay more to avoid that. I've said this before, after the financial crisis the banks were restricted on what fees they could charge for certain things so what did they do? They started charging fees for other things they weren't charging for before. These guys will find ways to adapt and still make money.
Also don't think it matters much if you're an aggregator or originator of content. So long as you have content that people want you're golden. I don't think it matters whether you created it or paid to get it. I guess it's slightly better to be an originator but in the end as long as you "control" it you're fine.
As I said above, it's the "excess content/minutiae" that'll take the hit. I see it similar to my anecdotal observations of going to movies and reading box office figures from time to time. The big blockbuster hits like Jurassic Park/Star Wars/James Bonds/Pixars will still make tons of money but the other stuff kind of falls by the wayside. If it's something people want they will shell out the money but if it's on the "eh" side, it'll fall by the wayside.
That is true to a certain extent. But the originator of valuable content always has the content to sell. The aggregator has to pay (and sometimes overpay) for the content. In the ESPN example, the WSJ talks about how ESPN is facing bidding competition from other aggregators (NBC Sports and Fox Sports), and therefore had to bid up the price to acquire NBA content. The NBA, as originator of the content makes more money, but ESPN makes less money since they have to pay more to get the content.
I'd agree with that, that's why I said it's probably slightly better to be an originator vs. aggregator. But it's not like their costs are fixed either. Say like Netflix, which is both an aggregator and originator, you create hit shows like House of Cards or Orange is the New Black, maybe the talent asks for more money. Look at the long running Simpsons cartoon on Fox and their talent. Players will ask for higher salaries or a bigger piece of the pie, college players are asking for more money now too even. So everyone's costs can go up whether originator or aggregator. I still think it's slightly better to be the originator but costs aren't fixed for either and can always rise.
But facts suggest otherwise...because after almost 35 straight years of subscriber growth...cable/sat companies have now lost millions of subscribers in just one calendar year.
Scary thing for cable/sat companies is the young target market that hasn't even signed up for cable/sat service (let alone those that have cancelled) as now a new young generation will grow up without $110-$150 monthly bills...as so many are now sharing wi fi access, hulu/netflix access and other on-demand service...as they (nor does anyone else) needs to pay for 500 plus channels at your finger tips.
ESPN and the Cable/Sat companies will still earn profits...but they now can't automatically rely on increasing their subscriber base liked they had done for the past 35 years.
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I think you missed my point, people who are canceling cable TV continue to have internet service from a company that offers internet and tv. They haven't cut the cord; they only changed what goes through the cord. There may be a few years where the cable/Internet providers figure out how to structure pricing, but it will happen.
This is why
This is exactly correct. The cable companies got fat and sloppy on all that free, network produced, high quality content they were sending over their wires. Then the networks demanded payment.. so they just raised our bills instead of tightening their belts and cutting all that frivolous wasteful spending they became so known for.
On another front, but related, I saw a story on one of the morning shows today about.. I think it was the Niners' stadium.. adding all kinds of wifi friendly services and cushy seats in hopes of luring people to the game off their couches in front of their beautiful giant TVs.
They are struggling in attendance. No one from San Fran is bothering to drive Santa Clara.
If you think you need wifi to attract fans your product is shit. I am going to less pro and college football, for one thing, the TV timeouts. They have ruined live viewing.
Honestly, this whole "cord-cutting" phenomenon might be one of the most positive things to ever happen to America.
Why do you ask?
Because it opens people up to actually live their lives rather than be glued to an electronic box in the corner of their living room. Granted obviously, a large portion of people cutting the cord are just switching from TV to the laptop and watching Netflix or whatver.... BUT there is a large portion of people cutting the cord purely on the fact that they realize what a negative influence the habit of watching TV can have on a person's productivity and overall life.
I used to think families that did not have TV's back in the day WERE CRAZY. I would wonder how the heck do they not have a TV? But it is funny how looking back THEY WERE TOTALLY ON TO SOMETHING and they were way ahead of the curve. (Oh and a side note....the 2 boys I knew in that family who had no TV would read and read and read..... and they both received full rides to college haha. Guess that family wasn't so crazy after all!)
Why do you ask?
Because it opens people up to actually live their lives rather than be glued to an electronic box in the corner of their living room. Granted obviously, a large portion of people cutting the cord are just switching from TV to the laptop and watching Netflix or whatver.... BUT there is a large portion of people cutting the cord purely on the fact that they realize what a negative influence the habit of watching TV can have on a person's productivity and overall life.
I used to think families that did not have TV's back in the day WERE CRAZY. I would wonder how the heck do they not have a TV? But it is funny how looking back THEY WERE TOTALLY ON TO SOMETHING and they were way ahead of the curve. (Oh and a side note....the 2 boys I knew in that family who had no TV would read and read and read..... and they both received full rides to college haha. Guess that family wasn't so crazy after all!)
Well, people are cutting the cord, but only because laptops and cell phones are cordless. They're still glued to something as much as ever.
Yup, I agree. That's why I mentioned that in my post. But there are some who are truly cutting the cord and getting away from the whole "entertainment" industry which is very positive.
ESPN....Already starting the negotiations with the B1G I see..... Let's the games begin....
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