> an unbunbled or streaming subscriber would need to pay $36 a month for ESPN access for them to generate the same revenue they generate through current cable carriage contracts.

ESPN and professional sports are way over valued and forcing everyone to subsidize sports fans. This is literally the reason why people are becoming cord-cutters, they're tired of paying for things they don't want. Right now 1 in 6 cable subscribers watch ESPN but 6 in 6 cable subscribers pay for it. Cable companies really need to move to an a-la-carte pricing model if they want survive but they're afraid of the large networks pulling their bundles. It's almost like we need a cable monopoly or union to break the network monopolies.

"1 in 6 watches it, 6 in 6 pay for it".

Except that the marginal cost of providing ESPN service to people who do not watch ESPN is nearly zero.

A-la-carte pricing makes sense if the corporation is spending a-la-carte costs, but they're not: the cable hookup and maintenance costs almost the same either way. There are some issues with a cap on the number of channels that can be simultaneously transmitted in a cable pipe, but it's perfectly feasible to launch a few hundred simulcast channels on current tech. You're not paying for the stuff you don't watch, you're paying for what you do watch; Providing the selection of things that you can refuse to watch, is basically free.

The cost of the hookup is just one part of the cost. Licensing fees are also present. A quick Google search finds that for ESPN, these are on the order of $5/customer/month. For someone who doesn't watch ESPN, that is a hefty subsidy compared to that of other networks.

Source:http://www.hollywoodreporter.com/thr-esq/dish-espn-trial-off...

Simple_Example_Cable_Company has 200k subscribers, charges $30/month, and licenses:

$10/customer/month to Channel A, which has 100k viewers who only watch it

$10/customer/month to Channel B, which also has 100k viewers who only watch it

...

In 2018, consumer activists manage to break up SECC and institute an a-la-carte system.

In 2019 they can choose to pay $20/customer/month to channel A (which is going to charge enough to keep its revenue at $2M/month), or they can choose to pay $20/customer/month to channel B (which is going to charge enough to keep its revenue at $2M/month).

On top of that, to secure either channel you're going to need a $10 subscription fee to the service provider for hookup (which is going to charge enough to keep its systems operational).

A-la-carte pricing is a zero sum game for the median viewer, so long as the content and the infrastructure keep getting paid for. It is nothing like "But I just want to be able to buy an appetizer, why are you making me pay for an entree!", because appetizers and entrees are both real goods which cost money to produce, while additional permissions to change the channel to something else, are not real goods. Food prices will not drastically rise for the same dish, if the customers order less of it, while entertainment prices will.

I think people are hanging their monopolistic concerns, which are valid for the most part, on a-la-carte pricing, and it's just nonsense.

Your analysis is all wrong. Not all programming costs the same to make or license and not all people consume the same amount of programming. Your point basically boils down to "those people whose ESPN you are subsidizing are also subsidizing your programming that they might not watch." That's true, but the two don't necessarily cancel out. Sports programming costs a lot to license because there is high demand and there's basically a monopoly.

Non-zero marginal costs would further favor a la carte pricing as it would reduce actual waste, but even with zero marginal cost there is still subsidization.

20/month is 240$ - for 240$ I can buy a season pass (40$) to 6 individual shows. Unless i want to watch more than 6 of AMCs shows concurrently, its much more expensive to pay 20$/ month. Even including shows that are over, I cant think of 6 successful shows on any single cable network. (walking dead, mad men, breaking bad, better call saul?, talking dead?, ??)

On top of this, pricing has already been set and normalized in this market.

Netflix is 7.99

amazon prime is around 8$

hulu is around 9 for ad free

hbogo is 14.99 and is seen as premium in the marketplace

I cant see any network pricing themselves above HBO and being successful.

You have succeeded in completely missing the point, by fixating on an arbitrary number while missing the simple principle that the contrived example is meant to illustrate.

If the service remains the same, the total that consumers pay will necessarily have to remain about the same. Instead of getting the freedom to change channels, they'll be stuck with the limited selection they have subscribed to. The bundling business model is a natural best fit for the technology that permits channels to be streamed simultaneously over the same lines; Anything else is a waste for the consumer and for the company.

You guys are chasing illusory discounts: "If I just had to pay $5 to ESPN and I could drop everythng I don't watch..." cannot mathematically happen, because ESPN has to crank up their prices or end most of their production to survive as soon as their customer base drops by 90% due to the end of bundling.

You have succeeded in completely missing the point.

It doesnt matter what ESPNs current revenue is, and it doesnt matter how many subscribers the lose when the shift towards a la carte.

The fact is that the pricing for sports content has already happened; if ESPN wanted to weigh in on how much sports should cost, they should have gotten to market before the NFL, MLB, NBA, NHL, etc.

ESPN can launch at whatever price they want, but if that price exceeds the price of the official league packages that i intend to watch, there is absolutely 0 chance that i subscribe to ESPN

You're chasing illusory revenues, "If I just set the price at X$, we could drop everyone who doesnt watch" cannot mathematically happen, because NFL et al would have to crank down their prices for ESPN to remain competitive.

>or end most of their production to survive

DING DING DING - this is exactly what will happen when espn finds out people dont value their more recent tabloid/drama centered content

An actual example:

I currently pay $150/year for NFL gamepass. This allows me to watch every single NFL game in HD live, including pre and post season games.

150/year is 12.50/month. IF ESPN released a service costing 13/month, i wouldn't buy it. What value does ESPN add to my existing NFL gamepass package? Do they think i would pay 13/month purely for sportscenter? purely for their terrible discussions of the latest drama in the sports world? Maybe if they offered some kind of sports news and debate like they did a decade or so ago.

This is ESPN's competition. They have to compete with existing services that already fill the need for watching sports.

I imagine ESPNs current broadcast contracts do not specifically allow them to move to a la carte structure, nor do i imagine it allows them to begin any kind of streaming service. I very much doubt the leagues are going to be very kind when renegotiating those contracts now that they all have their own streaming services.

I'm not sure what you mean by "Except" or "You're not paying for the stuff you don't watch, you're paying for what you do watch;"

A la carte that avoids ESPN, doesn't exist from the major providers (it's part of everyone's basic packages but ATT that I have seen). That was the point (6 of 6 pay for it).

I don't disagree with you, but I could apply this same logic to the 50 gazillion channels of reality TV cable was offering me that I could not possibly care less about. I don't like subsidizing them, but I was still paying for them.

I wish there was an unbundled option so I could buy just ESPN. That is literally the only thing cable companies have that I care about. Even better for me would be to just cut the cable companies out entirely and let me pay $20 a month or something directly to ESPN for WatchESPN access.

Funny thing is, I don't watch those channels either. That's why I don't have cable, there is almost no value in it. There are maybe 2 or 3 channels that I'd want but I can't get them without paying for 70 channels I don't want.

> an unbundled or streaming subscriber would need to pay $36 a month for ESPN access for them to generate the same revenue they generate through current cable carriage contracts

That subscriber will be worth a lot more once they can be targeted with individually personalized marketing content based on previous TV-watching habits, augmented with third-party data from other digital channels, web browsing history, purchasing history, etc. It's coming; YouTube proves it can be done. It's only a matter of time before we see different business models for the monetization of streaming content on more 'traditional' TV channels as well.

The alternative is a subscription model that would price out many sports fans, or obsolescence followed by slow death for want of revenue.

Doesn't it air on any open channel?

when i got my friends to watch the world cup at home i attached a $5 antenna to the DVR (i build a computer with a $120 TV-in card, and had never used until then!)

the image was not the best, but for live sports, who cares?! oh and it got worse every time a plane passed above.

anyway, the antenna was a very easy solution for the impromptu need for live sports.

Not sure where you're located, but in the US ESPN is a cable/satellite only channel. The only way to get it is with a subscription.

For college sports, they're also the biggest player. The "big" matchups of the week (usually the highest ranked or most interesting teams) in each market are usually played on the major networks that you can pick up with an antenna from the local affiliate. But the rest of the games being televised are carried exclusively* on cable, usually on ESPN channels.

Keep in mind there are 128 Division 1-A (major) programs, and many more 1-AA and lower programs, so there are a LOT of games going on each week. Some games are played during the week, but the very large majority of them are played on Saturday. So there's way more going on then could ever conceivably be carried over the air.

During college football season, there are something like 7 or 8 games playing simultaneously on the various ESPN channels, not including the "Plus" channels that are only available digitally by WatchESPN.

There are a couple others out there (NBC Sports Network and FoxSports come to mind) but neither are bigger in sports than ESPN.

* Depending on where you live, you can also sometimes get radio broadcasts if you live close enough to the school in question that there's a local affiliate that carries the game. Rights for those are handled differently.

i see. well, for air channels, they would probably show the Saturday game with the most local teams only. never really followed american football. but for soccer that works fine for most people. And when there are two games with local teams, they show the bigger one and interrupt it to show goals on the other one.

>isn't on AppleTV

You can use your Sling membership credentials to sign into ESPN's app. The app does not crash from my experience - works a charm.

Yup, that's exactly what I was doing. :)