At what point will ESPN and other sports nets feel the effects of cord cutting?

[KeithE4]

Amen. I'm no techie, but from what I understand, the ongoing cost to providers of upgrading the internet infracstructure to handle the ever growing need for bandwidth will cost them billions. They aren't going to do this for free.

Anybody who thinks they will continue to pay $29.95 - $49.95 per month for high-speed internet access is kidding themselves.

We pay anywhere from $100-$500 a month for electricity, depending on how much heat and AC we use. I can't see high-speed internet access being super-expensive, but $100 a month isn't out of the realm of possibility if a high enough data rate is available.

 

[LKellerIII]

Amen. I'm no techie, but from what I understand, the ongoing cost to providers of upgrading the internet infracstructure to handle the ever growing need for bandwidth will cost them billions. They aren't going to do this for free.

Anybody who thinks they will continue to pay $29.95 - $49.95 per month for high-speed internet access is kidding themselves.

We pay anywhere from $100-$500 a month for electricity, depending on how much heat and AC we use. I can't see high-speed internet access being super-expensive, but $100 a month isn't out of the realm of possibility if a high enough data rate is available.

Exactly. Utilities - For me (per month):

Cell phone (3 of us on family plan) - $250
Electric and gas (combined where I live) - $160 summer to $275 winter.
Comcast Cable - $140
Water - $75
Garbage pick-up - $50
Hi-speed Internet/landline phone - $50

So cable is my 3rd highest "utility," and I know I could save some money by switching to satellite. But I don't hear anybody saying they're going to give up their cell phones, or wear their down jackets indoors in the winter. For some reason, the high cost of cable/satellite just chaps people's a**es.

I'm old enough to remember 7 channels of ghost-filled fuzzy over-the-air TV, and I'm grateful to have hundreds of more choices these days. I won't be going back. I may get all my "TV" over the internet in another 10 years, but I'm sure I'll still be paying about $140...adjusted higher for inflation, of course.

 

[Morgan Wick]

Imagine if there'd been an NBC Sports Network 2 years ago when they lost Wimbledon to ESPN.

There was, it was called Versus, and it was part of the problem. NBC was only willing to air the semifinals live in all time zones if they could use Versus for the purpose, and ESPN's contract wasn't up yet.

More and more popular shows will migrate to pay TV. As it is, most of the award-winning dramas are on HBO and Showtime. Companies know they have two revenue streams in cable, while OTA only provides one. Cord cutters will find themselves out in the cold at some point. There will be little left on free OTA TV except infomercials and repeats. Even PBS will realize the opportunities. There is no law that requires these companies to lose money.

Broadcasters do have retransmission consent, but this is why I think a la carte, coupled with scripted shows becoming increasingly reliant on Internet streaming over linear channels of any kind, is a bigger short-term threat than cord-cutting.

Hulu plus might be considered a dual revenue stream since it still has ads

If you're really cutting the cord, that means no Hulu either. Because the companies that own cable also own internet. So if they don't get you in one place, they just get you in another.

As I have said time and again, whether Comcast or Verizon get your money is immaterial for the purposes for which we talk about cord-cutting. The question is, how do you consume your content? If it's via Hulu, that means the linear channel that originally aired it means little. It's not Comcast who has to fear cord-cutting, it's ESPN or AMC.

A lot of cable subscribers (and satellite) signed up for sports in the first place. They are not going to cut the cord unless sports is equally available by some other means. And if it is, you can bet they are still going to have to pay for it.

ESPN will not go premium. No reason to. They already get about $5 per basic subscriber - whether the subscriber ever watches or not, plus ad revenue. If they go premium, only people who actually watch pay and they can't change as much for ad revenue. Besides, the sports leagues would probably not go for restricted access to their games.

What you're missing is that cable companies, even as they fight calls for a la carte, are already introducing sports-free packages. They're already turning ESPN and the like into glorified premium channels. If sports leagues don't want to go for restricted access to their games, they're going to have to find a way to distribute a sizable number of games on a platform that doesn't price out the casual fan by virtue of the fact it has those games on them. The first paragraph is why I think sports fans are going to be a big determinant of the success of cord-cutting or a la carte, even if it might look like those things will have to succeed in spite of them.

 

[landtuna]

Imagine if there'd been an NBC Sports Network 2 years ago when they lost Wimbledon to ESPN.

I know a bunch of people who watch the NFL. I don't know a soul who watches tennis. The spread of individual sports across multiple channels gives any sports fan the ability to watch the sport of their choice without subsidizing a whole rack of sports they don't like (on ESPN for example).

Look at the respective ratings for NASCAR for instance - available on Fox OTA and on cable for selected races. The Fox ratings dwarf the remainder.

More and more popular shows will migrate to pay TV.

Which ones have migrated so far? The only ones coming to mind are shows that no longer show on OTA. Some shows are developed specifically by and for pay TV but those are not the ones we are talking about.

HBO and Showtime have become the new PBS in some respects. Any high production high quality series takes deep pockets which networks and PBS are unable or unwilling to cover. That may be the future but I don't see the mainstream of TV shows going to pay TV any time soon. At least not until subscription fees overrun advertising.

Cord cutters will find themselves out in the cold at some point.

How so? The big numbers are still on OTA. So long as advertisers have the big bucks and want to reach millions of people per hit OTA is the only way. Critical reviews are important but they don't drive the big bucks.

And why should I, a cord cutter, want to pay for an entire suite of channels for the one or two programs I want to see? I can download it online, buy the DVD, subscribe to a pay per view service or rent it.

I once spent $60/month for a host of services I never watched. I can take that same $60 and buy at retail two complete series on DVD and have them to watch forever.

OTA could kill itself of course by continuing to show crappy sitcoms, endless so-called "reality" shows and fill weekends with infomercials. And the viewing habits of the younger generations might also put the nail into OTA but it won't be just the cord cutters who suffer as viewing habits are not different between pay and free TV.

 

[landtuna]

Here is another possible twist to this puzzle. Every NBA game, including the Finals will be telecasted on ESPN and not ABC.

Or the World Series on either ESPN or TBS?

Would that make sports fans "re-connect" the cord?

Not for me. I don't watch basketball of any kind and the last WS game I watched was the last two innings of game 7 of the 2001 season. I also don't watch the NFL, tennis, golf or any of the garbage, er I mean "extreme" sports. What few sports I do watch I can find quite easily online.

 

[w9wi]

I have only the Internet service from my local cable company, and pay roughly half what I'd pay if I also got my TV that way.

I think the point is the money is going to the same place. And if one service starts to hurt, they simply raise the price of the other. They're gonna get your money one way or another. You're not going to avoid it.

Amen. I'm no techie, but from what I understand, the ongoing cost to providers of upgrading the internet infracstructure to handle the ever growing need for bandwidth will cost them billions. They aren't going to do this for free.

Anybody who thinks they will continue to pay $29.95 - $49.95 per month for high-speed internet access is kidding themselves.

Oh, I know darned well my Internet bill is going to continue to increase.

But surely, the TV bill isn't going to be dropping any either, is it? Really, it has to drop to *zero* -- they have to give away the TV service for free -- if it's to make sense for those in my situation to unhook the antenna & sign up for the TV service.

"...those in my situation..." meaning those who don't value those channels which are not available OTA or through streaming.

 

[PTBoardOp94]

ESPN etc. won't feel the effect of cord cutting until people actually start cutting the cord en masse -- or at least start moving to packages that don't have ESPN. That isn't happening yet, and its hard for me to say that I see it coming.

 

[TheBigA]

Cord cutters will find themselves out in the cold at some point.

How so? The big numbers are still on OTA. So long as advertisers have the big bucks and want to reach millions of people per hit OTA is the only way. Critical reviews are important but they don't drive the big bucks.

But the vast majority of people are watching OTA channels via cable or satellite, not rabbit ears. And those numbers continue to get diluted by all the non-network offerings. Sure, you have some OTA shows that get 20 shares. But a lot of them get under 5. That's the same as they'd get strictly on cable. This is an evolving situation. At some point, if you restrict yourself to rabbit ears, your choices will be limited, because the costs of creating content will exceed the advertising revenues. We've already seen it on radio. Live and local DJs 24/7 simply aren't practical in most places any more. That situation will reach TV very soon.

 

[landtuna]

But the vast majority of people are watching OTA channels via cable or satellite, not rabbit ears.

Correct me if I'm wrong but it doesn't matter what the pipe is for OTA viewers or if there is no pipe at all. A viewer is a viewer (assuming we are not talking about next day or DVR viewers). The network still gets credit for the viewer no matter how he/she watches.

Sure, you have some OTA shows that get 20 shares. But a lot of them get under 5. That's the same as they'd get strictly on cable.

Mox nix, no? I'm going to guess there are a ton of cable shows with infinitesimal ratings while most prime time network shows do much better (NBC excepted perhaps).

At some point, if you restrict yourself to rabbit ears, your choices will be limited, because the costs of creating content will exceed the advertising revenues. We've already seen it on radio.

OTA TV, regardless of whether you watch through rabbit ears, cable or satt will be more restricted than the 200+ channels of cable but if you don't care about those cable channels or you watch them through other sources then it doesn't matter.

I cut my cord several years ago and the number of events/shows I missed but wanted to watch is probably less than a dozen. The rest I have been able to find elsewhere at no cost.

Do I think that will last forever? No. Do I intend to re-sign with cable? No. There is simply not enough I care to watch that is worth paying out of pocket for.

There is one last advantage to OTA via rabbit ears and that is full HD signals. My cable watching neighbors have continued to comment that my HDTV must be the difference in PQ. Even though they are subscribing to HD cable their PQ is not up to mine.

 

[TheBigA]

Correct me if I'm wrong but it doesn't matter what the pipe is for OTA viewers or if there is no pipe at all.

Correct me if I'm wrong, but I thought the topic is cord cutters. That's what my response is about.

 

[landtuna]

Correct me if I'm wrong but it doesn't matter what the pipe is for OTA viewers or if there is no pipe at all.

Correct me if I'm wrong, but I thought the topic is cord cutters. That's what my response is about.

Yes, and I was responding to your statement.

 

[nomadcowatbk]

ESPN etc. won't feel the effect of cord cutting until people actually start cutting the cord en masse -- or at least start moving to packages that don't have ESPN. That isn't happening yet, and its hard for me to say that I see it coming.

The problem that the leagues face it that cord cutting is trend with younger viewers who may never become cable subscribers and possibly risk alienating advertiser desirable younger fans.

 

[TheBigA]

The problem that the leagues face it that cord cutting is trend with younger viewers who may never become cable subscribers and possibly risk alienating advertiser desirable younger fans.

You're really overstating it. The numbers don't justify the use of the word "trend," if you're talking about cutting all cords. You also underestimate the number of younger viewers who still live with mom & dad and watch their parent's cable. Also younger viewers, including women, LOVE sports. They don't like paying for tickets, and that's a problem for the leagues.

 

[nomadcowatbk]

The problem that the leagues face it that cord cutting is trend with younger viewers who may never become cable subscribers and possibly risk alienating advertiser desirable younger fans.

You're really overstating it. The numbers don't justify the use of the word "trend," if you're talking about cutting all cords. You also underestimate the number of younger viewers who still live with mom & dad and watch their parent's cable. Also younger viewers, including women, LOVE sports. They don't like paying for tickets, and that's a problem for the leagues.

Cord cutters are small in numbers but growing, ESPN and the leagues may have a problem in 10 years. These younger viewers may never get cable when the finally move out of their parents basements, they may not even get a DSL connection if they can pick up a neighbors unsecured wifi. There's also always bittorrent. A lot of college students don't even bother to hook up to the cable connections offered in their dorm rooms

 

[landtuna]

Three of my five adult children are on their own and all subscribe to cable. They also have internet hard-wired to their houses. The other two are nomads and live on their smartphones. Neither one watches TV at all.

I don't know about young adults not having cable. It seems those that live in apartment buildings all have it as a by product of apartment living. Those living in houses, especially those with children, all seem to have cable.

 

[TheBigA]

Cord cutters are small in numbers but growing, ESPN and the leagues may have a problem in 10 years.

A lot will change in ten years. Count on that.

Being connected is a big deal with Gen Y. They can't live without interaction. Certainly the phone and pad is where most of that happens, but downloading video is expensive.

 

[vchimpanzee]

Exactly. Utilities - For me (per month):

Cell phone (3 of us on family plan) - $250
Electric and gas (combined where I live) - $160 summer to $275 winter.
Comcast Cable - $140
Water - $75
Garbage pick-up - $50
Hi-speed Internet/landline phone - $50

I don't have a cell phone.

Gas isn't available here except in tanks.

Time Warner Cable - $19
Water - $15
Windstream phone/Internet - $60

I don't know what garbage costs. It's included in my taxes.

I haven't actually looked at my power bill lately but it must be less than $50 because I go to this Duke Energy payment center every two months and pay $100. That way I won't have to come back for two months. I just happen to go to that town every two months on my way to someplace else.

 

[PTBoardOp94]

It seems those that live in apartment buildings all have it as a by product of apartment living. Those living in houses, especially those with children, all seem to have cable.

More generally, I would say those with spouses.

The more people there are in a household, the more valuable all those choices become, although you might say it is a social good for families to all sit down and watch reruns of "Golden Girls" on Hallmark Channel

 

[landtuna]

More generally, I would say those with spouses.

Or live-ins.

 

[Morgan Wick]

The problem that the leagues face it that cord cutting is trend with younger viewers who may never become cable subscribers and possibly risk alienating advertiser desirable younger fans.

You're really overstating it. The numbers don't justify the use of the word "trend," if you're talking about cutting all cords. You also underestimate the number of younger viewers who still live with mom & dad and watch their parent's cable. Also younger viewers, including women, LOVE sports. They don't like paying for tickets, and that's a problem for the leagues.

While I'd like to see nomad provide non-anecdotal/non-wishful-thinking evidence, again, cutting the cable cord is enough for the vast majority of cable networks, especially ESPN.

Cord cutters are small in numbers but growing, ESPN and the leagues may have a problem in 10 years.

A lot will change in ten years. Count on that.

Being connected is a big deal with Gen Y. They can't live without interaction. Certainly the phone and pad is where most of that happens, but downloading video is expensive.

Will they respond to that by ordering cable packages, or making use of broadcast OTA stations and mobile DTV? That's the challenge for the next decade.