Kolek planning to go pro
Sucks to be the middle man don't it?Customers can be dumb, but part of it is because they don't have the information. They don't know that ESPN accounts for $9 a month of their cable bill. But as these ala cart services start to "expose" the cost to consumers they'll smarten up.The change is happening, and while the dumb folks don't understand it....it will change their behavior and content providers and deliverers will have to adapt further as well. Not sure what the picture will look like 5 years from now but it will be very different from where we are.
Wait....I never said it wouldn't or couldn't happen. Seriously, read...it might help you.Here's a few things I've said about it"They've been "considering it" for a few years now and the math doesn't work.....Now, down the road could it change....of course. But they know for it to change their expenses go through the roof in a way they cannot appreciate."Also said if they do it, they will have to spend a ton of money to ramp up.....which is now what they have signed up to do. If rumors are true, can't wait to see the reactions here on the price point.
Christ - shoot me in the face if I ever have to work with someone this pompous and in need of approval from a college BBall forum.
I understand it fully. Trust me, I understand it fully,I'm paid to understand it Most of this is the media's fault
Actually, no....it doesn't suck to be the middleman. I'd recommend reading today's WSJ article. What sucks is to be a programmer that has really good content but is paid for it by 50% of the people that don't want it, plus having not so great content that is wanted by niche customers that they are also paid on....that's how they get paid. If they now have to sell it individually, their $$$ will be sucked out so fast it will make their head spin, that's why they don't want to break up the bundle. The bundle is driven by them, not the middleman.I'd read the article.....should be required reading of everyone as soon as they mention the word a la carte...should be a primer.
SMH....seriously SMH. I hope the Atlantic can get some business sense....they say it would be $30 a month, but you're right. http://www.theatlantic.com/business/archive/2013/07/how-watching-unbundled-espn-and-amc-could-cost-more-than-your-whole-cable-bill/277916/Adweek...$30 for ESPN....I sure hope those guys can get away from their "misunderstanding of economics"http://www.adweek.com/news/television/la-carte-worst-idea-anyone-has-ever-had-151814Variety...$30 a month for ESPN....they need to do some economics learning. http://variety.com/2013/biz/news/would-you-pay-30-per-month-for-espn-1200563396/Analysts say $30 a month...analysts no doubt...send them back to ECON 101. http://articles.philly.com/2013-07-17/business/40614790_1_sports-channels-la-carte-sports-fans
Wow, I'm very concerned for Benny. Being able to mimic Myron Medcalf's writing so closely implies an oncoming case of dementia.
Four articles and they all say $30. Coincidence?Just remember... Nobody in the media prints anything about ESPN without the mouse's permission.
Just my two cents...Everyone clamors about the free market, supply and demand, etc, until it threatens their business/sector/livelihood. As well, many situations are status quo and accepted norms right up to the point until they aren't. Companies aren't going to ever make changes for the benefit of consumers if it causes them to reduce profits or lose consumers. But, I think, in this situation, there are opportunities for change to occur. Having said that, it takes a hell of a lot of consumers and a hell of a lot of time to change purchase habits and therefore influence companies to change the way they function.
If you're interested and have 30 minutes, John Skipper talks somewhat openly about a stand alone ESPN product, cord-cutting, Google and more:http://recode.net/2014/10/05/why-espn-thinks-it-can-sell-nba-games-on-the-web-without-breaking-up-its-pay-tv-bundle/?utm_source=newsletter#038;utm_medium=email&038;utm_campaign=rc_email_daily&038;utm_content=why-espn-thinks-it-can-sell-nba-games-on-the-web-without-breaking-up-its-pay-tv-bundleScroll down to bottom for video.
Skipper is an interesting guy, though the problem I have with John is he says one thing and does something totally different. Their new deal with DISH and capping it is exhibit 1A, of course 99.9% of the people out there have no idea what they have done in that deal with the ESPN cap. But he's smart enough to know who pays his bills, and it isn't going to be a la carte anytime before I retire.
There are huge numbers of consumers looking to spend less on TV. As soon as that option becomes available, ESPN needs to change their MO.I think their are significant numbers of viewers that would pay ala carte for ESPN. I don't think ESPN revenue would be as high as it is now.Lower player salaries?
This is quite possibly one of the dumbest things I have ever read on this board. First off, does nothing about college athletes. Secondly, the inference that players should have lower salaries so you can have a cheaper cable bill is laughable. If owners and GM want to stack their rosters with minimum pay level guys, that's on them. If we sheep want to pay big bad cable company lots of $ for sports, that's on us. But put the onus on players?
We've (my old gig) been approaching it from the consumer side for a long time as well. It is why we get into so many fights with Disney, AMC, Viacom, Fox, etc. Because #1, most consumers aren't intelligent enough (sorry, that's just the truth) to understand where the costs are coming from and they blame it on the distributor...people aren't out there saying @#$#@ ESPN, they're saying @#$#@ Time Warner, but it's ESPN holding Time Warner over the coals with insane pricing. So the distributors totally get the argument.I don't think anyone has ever said it is inelastic, but the math is the math. If you can get 100 million homes to pay $100 a month of television but when you go to $120, you have 10 million say that's it, I've had it. The industry is going to take it every time.100M * $100 = $10,000,000,000 a month90M * $120 = $10,800,000,000 a month10% loss in customers, but a huge gain in overall revenue. That's how they look at it and until that 10% loss in customers goes down to 40%, 50%, etc, things aren't changing and that is why Disney and Turner write a $25 billion check to the NBA. That is why AMC is playing games right now with various distributors trying to capitalize on their one hit, Walking Dead. So on and so forth.Now, what to do with that 10%...which will grow....they bring in OTT products for Cord Nevers and Cord Shavers, but they do it as an accretive offering, not a cannibalistic one. That's at least the attempt. They don't want to exchange out dollars for digital dimes. If that starts to happen, they'll make the OTT offering weaker, or jack up the prices to stop the cannibalization.Look at what your cell phone bill is like today vs 5 years ago. How about PC video games, which is a much better comparison than the one people trot out each year to compare video to the song download industry. PC Video games can be bought directly over the internet, just download and go...no need to go to Best Buy or Gamestop. Prices are still $60 a game, despite the "delivery" system being more efficient. Difference is they can also discount old games and still monetize them, much like video is today with old stuff on Netflix, Hulu, CBS All Access...new products coming out from Directv, Dish, etc.
Lord shoot me in the chest if I ever have to go on a website and say "but blah blah blah said it wouldn't happen" when the person I was trying to be a dick too never said what I claimed him to say, but I was hopeful I could get my pud flying at half staff to prove a point that ultimately I didn't prove because the guy I was trying to zing never actually said what I was trying to zing him with".....all so I could score points on a college BBall forum.
And please God, shoot me in both balls if I ever change my username after a 17 year old kid in the hopes that he comes to my school...maybe he'll read my username and come here because of me. You call someone out for being condescending when all you were from the start of this thread is be condescending ....when someone returns serve you get upset.
Just my two cents...Everyone clamors about the free market, supply and demand, etc, until it threatens their business/sector/livelihood. As well, many situations are status quo and accepted norms right up to the point until they aren't.
Well put.The only change is that I would add "start to" after "a lot of time" in your last paragraph. Change always starts agonizingly slow (see gay marriage) and then tends to take off like a banshee once it reaches a certain point.
What you're suggesting is a premium or super-premium pricing model/strategy. It clearly works for some brands and products. Apple, BMW, Cadillac, Marlboro to name a few. Big picture, the risk is this: If "traditional" cable moves to a premium pricing model (with less penetration, but better profit per customer), it creates a gap in the marketplace. Examples: - iphone is a great product that has high demand, and people are willing to pay a premium. However, if you look at marketshare, Apple left a hole at the middle/bottom end of the global market, and Android and google filled it with more reasonably priced products. - BMW makes a fantastic car, but Toyota and Honda sell waaaaay more cars in the mid and bottom tiers. - "traditional" video games are sold for a premium price (takes a lot of overhead to develop a game), but games like "Angry Birds" are far more popular and are profitable for their developers. So, I think you are probably correct, "traditional cable" is not going to go away, but you might see far less market penetration at a premium pricing model, which would ultimately hurt ratings and/or ad revenue, as well as leave a pretty big hole at the bottom of the marketplace for cheaper/alternate content creators as well as alternate providers.
I agree this is likely for cable to move along the cost curve.... I, for one, watch way less TV than I did in college. I'll catch 30-60min per week, if at all.It just doesn't make sense for me to pay for 200 channels (144,000 hours of content per month) for ~$100. While that's a great "deal" at effectively <$0.01 per hour of content, I only watch 4 hours per month... that comes to $25 per hour.However, if I can get just that content that I really want to watch a la carte, for $5/hour (for example), that's a great value. Someone will come into the marketplace to grab that opportunity to grab more cash.I am not unique - more entertainment options are grabbing leisure hours, and TV is less and less of the equation for many younger than 35.This may not be the death blow, but cable subscriptions make no sense to either the content provider or consumer, and will eventually be phased out.
Right. As it stand, cable is priced for the masses, but if that $ continues to inflate, it will open up a hole for a lower cost alternative option.Also, if you really want to extrapolate it, you might find content creators who feel they can create and even distribute content more efficiently than the current model. It's the "angry birds" effect. Could the next "Seinfeld" be developed and distributed via a cheap app, instead of somebody paying $X to a provider, studio, producer and distributor to get a bunch of content they don't actually use?
Content creation and distribution is getting less expensive and more accessible every year.
That is essentially under way.http://www.businessweek.com/articles/2014-08-28/youtube-hollywoods-hit-factory-for-teen-entertainmentContent creation and distribution is getting less expensive and more accessible every year.