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Is it possible ESPN will just make less money? The article assumes ESPN will charge an individual subscription rate such that it will make the same revenue as
by EricDeb 14y ago
Is it possible ESPN will just make less money? The article assumes ESPN will charge an individual subscription rate such that it will make the same revenue as it would via cable bundles. If TV is like music or newspapers, it's entirely possible ESPN or similar cable channels will just make less money.
- billirvine 14y ago"Just make less money." How many YC startups would accept that compromise? The legacy of the massive broadcast entertainment ecosystem will take some time yet to unravel, but will do so quite quickly when it happens. Then there will be a void for more agile content creators to step in. Until that void appears, expect pain and horror.
- prostoalex 14y agoYou're spot on. What are ESPN's expenses? It's the royalties it shells out for the rights to broadcast specific events and leagues. They will have a better leverage now against NFLs and NBAs of the world, who would have to accept lower rates, passing the savings onto consumers.
- waterlesscloud 14y agoIt's not just the royalties, the cost of the production itself is significant. I suspect you would lose a lot of the smaller events that simply would no longer be cost efficient.
- seanalltogether 14y agoI would disagree. In a world where all sports broadcasting goes through the net, someone will be willing to watch smaller venue games, which means someone will find a way to broadcast it.
- waterlesscloud 14y agoI suppose. At the level of high school football on public access cable, maybe. Single camera, single commentator, one devoted to the team. That has a certain appeal, I guess.
- philwelch 14y agoFor the NFL and NBA, ultimately the lower revenues will be passed on to the players in terms of lower salaries, and aside from potential labor disputes, things will continue largely as before. That's because the NFL and NBA are essentially cartels anyway. But soccer will take the hit even harder. Clubs like Manchester United, Real Madrid, and Barcelona depend upon TV revenues to fund themselves, while clubs like PSG and Manchester City have received massive investment with the hope that it'll be recouped in the long run. Without TV revenues, and without anything to replace them, we're likely to see a major impact, and more than a few clubs facing severe financial problems if not outright bankruptcy.
- icebraining 14y agoBut TV revenues wouldn't disappear, just drop. Those clubs just have to cut on the massively inflated salaries. I expect smaller clubs to be hit much harder.
- richardjordan 14y agoPlus if baseball, football, basketball etc. can own their customer through an app on their TV - a gateway they completely own - why would they sell content to ESPN anyway... ESPN becomes a much lesser product... merely news and highlights.