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> 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 c

> 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.

mapt 11y ago
"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.
- jack9 11y ago
  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).
- MereInterest 11y ago
  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-offers-a-422301 http://www.hollywoodreporter.com/thr-esq/dish-espn-trial-off...
  - mapt 11y ago
    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 $10 subscription fee to the service provider for hookup (which is going to charge enough to keep its systems operational). A-la-carte pricing is a zero sum game for the median viewer, so long as the content and the infrastructure keep getting paid for. It is nothing like "But I just want to be able to buy an appetizer, why are you making me pay for an entree!", because appetizers and entrees are both real goods which cost money to produce, while additional permissions to change the channel to something else, are not real goods. Food prices will not drastically rise for the same dish, if the customers order less of it, while entertainment prices will. I think people are hanging their monopolistic concerns, which are valid for the most part, on a-la-carte pricing, and it's just nonsense.
    - unprepare 11y ago
      20/month is 240$ - 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.
      - mapt 11y ago
        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.
peckrob 11y ago
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.
- cptskippy 11y ago
  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.

mapt 11y ago

"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.

jack9 11y ago
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).
MereInterest 11y ago
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-offers-a-422301 http://www.hollywoodreporter.com/thr-esq/dish-espn-trial-off...
- mapt 11y ago
  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 $10 subscription fee to the service provider for hookup (which is going to charge enough to keep its systems operational). A-la-carte pricing is a zero sum game for the median viewer, so long as the content and the infrastructure keep getting paid for. It is nothing like "But I just want to be able to buy an appetizer, why are you making me pay for an entree!", because appetizers and entrees are both real goods which cost money to produce, while additional permissions to change the channel to something else, are not real goods. Food prices will not drastically rise for the same dish, if the customers order less of it, while entertainment prices will. I think people are hanging their monopolistic concerns, which are valid for the most part, on a-la-carte pricing, and it's just nonsense.
  - unprepare 11y ago
    20/month is 240$ - 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.
    - mapt 11y ago
      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.

peckrob 11y ago

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.

cptskippy 11y ago
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.