Stand alone HBO

[MU Fan in Connecticut]

DirecTV sucks. I don't know that for a fact but I'll throw it out there.

...

I'm just waiting to see how much Chicos bait this thread needs before he actually responds. Is he in a coma or actually working?

No.  He posted over the weekend that he was going to be in France for work this week.  I'm just guessing in an attempt to avoid sky-high international charges that he's had limited Wifi access or something.

[Benny B]

Key words bolded.  If you want a lot the package makes sense. 

If I want Amazon Prime, MLB.TV, and Hulu, I can pay $350 per year.  Bump it up to $500 to include Netflix or ad-hoc movie/TV show rentals.  I'm currently paying about $1,350 annually for that lineup plus ESPN and 200 more channels I don't watch.  Is the ESPN package and the other junk worth $850 per year since there is no alternative for ESPN?  That's my decision point now.  If the option were actually offered, a provider's option or a stream of just ESPN could get me at $50 per month without hesitation since the total cost for what I actually want would be less.

Since cutting the cord 4.5 years ago, I estimate I've saved over $2500.... That's after paying for my HTPC and sub fees for Hulu, Netflix, Amazon and MLB.tv.

Oh, and I've missed something like 3 or 4 MU games that I wanted to watch on TV in those 4.5 years.

[4everwarriors]

No.  He posted over the weekend that he was going to be in France for work this week.  I'm just guessing in an attempt to avoid sky-high international charges that he's had limited Wifi access or something.

Probably takin' in a Gardner game as we type, aina?

[ChicosBailBonds]

wait... i thought Chico said this would never happen?

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.

[ChicosBailBonds]

I feel like I've heard the same thing here before too. Man, sucks to be wrong

Hopefully this is a step towards paying only for the channels I want, not giant blocks of useless filler channels

I also said this "I don't doubt it could happen and one day someone will say "I told you so".  No need, one day it will happen."


Amazing how many of you simply don't read, but not surprising.

http://www.muscoop.com/index.php?topic=37740.0

[ChicosBailBonds]

I'm not sure Chico's doomsday scenarios of having to pay $20 per month for ESPN are realistic. For a business guy, he sure seems to misunderstand economics. If ESPN is forced to go alone and starts out at $20 per month, and no one pays it ... law of supply and demand suggests they are going to have to reduce their costs. Does that mean they will have to cut back on their own programming / extra channels (the Ocho)? Yeah, probably. The market will bear what people actually want, not what a few hyper wealthy monopolists on the coasts have created for the plebes.

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-151814

Variety...$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



I get this business, I get the economics just fine.

Now, your paragraph above shows you just absolutely do not get what you are talking about.  Absolutely ESPN would get north of $20.  You fail to recognize that ESPN TODAY gets about $7 to $8 per month per subscriber from about 100 million paid tv homes.  Do the math.  They have liabilities in to the many many billions, added to it just the other day with the NBA.  Do the math, this isn't hard....all it takes is someone with a business background.  Oh the irony...give it a try.

For a business guy, I get the economics just fine because I understand the nuances of how it works, and honestly...you don't....and if I'm being snarky and condescending about it, too bad.  You begged for a response a few times in this thread, I was busy working (where you were condescending yourself), so I'm giving you the answer.  I'm tired, but your snarky tone deserved a snarky response.  Clearly, you are out of your element in this space...completely.

[ChicosBailBonds]

This is where I get to say "I told you so".

Wait until you get to see the price point of this HBO product.      Looking forward to the "I told you so".

[ChicosBailBonds]

And now CBS launches their platform.  But no sports.

http://www.cbsnews.com/news/cbs-launches-digital-subscription-service-cbs-all-access/

You should read the analysts at Morgan Stanley, Chase, etc that came out with their assessment today on this. Pretty funny stuff and I say that as someone now in the OTT space.

As one guy put it

$5.99 for CBS content, no sports, no live feeds
$7.99 for NBC and ABC and Fox (Hulu), no live feeds, no sports
$9.99 for Netflix
$24.99 to $29.99 for HBO

About $40, no ESPN, almost nothing live, no sports, limited to 2 streams max....etc.  As the Morgan Stanley analyst said...can't see this service getting more than a few million subs in 5 years, the value isn't there.

Dramafever was sold earlier this week.  Redbox OTT was scuttled last week.

A lot of people just don't get it.

[ChicosBailBonds]

When you factor in the fact you're still going to need to get internet from Comcast/ATT/TWC/etc, and all the services I'd actually want (Hulu,Netflix,Amazon Prime, HBO, etc.), I'd almost rather pay the premium to have it all in one package.

And that's before the internet fees for gating come into it.

You're understanding the big picture.  Well done.

As an HBO Sr. VP told me yesterday, they have an enormous task ahead of them.  They get more than $4 billion a year from cable, satellite and telco pay television subscribers, they pay next to nothing in marketing fees, have no customer service costs.  Now, they go OTT direct, which means they have to hire call center employees, do massive marketing, and try not to piss off their partners that are bringing in $4 billion a year for them so they can go after people that don't or can't pay $50 a month for TV.   As she told me, they have a very big task ahead of them. Don't be surprised if this HBO stand alone is $25 to $30 a month.  Or, they could try to sell it at what a cable company does today, and as she correctly pointed out, the cable company will say...bye bye, do it on your own HBO...and oh by the way, HBO which is owned by Time Warner...also owns TNT, TBS, CNN, etc....good luck....that side of the business needs cable and all those subscription dollars to survive.

Going to be fun, if only I had some business acumen in this area...maybe I can pick up a book on it.  

[ChicosBailBonds]

Since cutting the cord 4.5 years ago, I estimate I've saved over $2500.... That's after paying for my HTPC and sub fees for Hulu, Netflix, Amazon and MLB.tv.

Oh, and I've missed something like 3 or 4 MU games that I wanted to watch on TV in those 4.5 years.

I just hired a gal from Hulu that started for me 2 weeks ago....everyday she thanks me for getting her off the ship.  Interesting times.   People have NO IDEA and you can tell just by the messages in this thread.   Absolutely NO IDEA.

Whatever....I keep telling you where the answers are....go to the content companies, they drive the costs and because they have a free ride on customer care, delivery, and millions of people paying for their channels that don't want their channels because THEY force the distributors to do this, the pricing of a la carte will be through the roof and many choices will go bye bye.  Can't wait to see the gov't scream bloody murder when BET goes away.  Or Food Network.  Or ESPN at $25 to $30 a month.  Be careful what you wish for, which is also what I've told you guys the last few years.

Tick tock   

[ChicosBailBonds]

DirecTV sucks. I don't know that for a fact but I'll throw it out there.

...

I'm just waiting to see how much Chicos bait this thread needs before he actually responds. Is he in a coma or actually working?

A lot of unfactual things you have been throwing out there, so this wouldn't be a first.  I've got a new gig, but it's a free country you can tear down who you want.

Yes, Cannes, France.  www.mipcom.com    If you think anything is changing anytime soon, well you should have been at Mipcom.  The content creators are going to charge more than ever, they don't care if you buy it through the internet, cable, satellite, fiber....they are going to charge.  Everyone was here, Netflix, Hulu, Disney, Twentieth Century Fox, NBC Sports, CBS Sports, every major studio and television production company in the world....about 30,000 people in total.  The amount of money for content is only getting worse, sports especially.

AMC....wait until you see their little battle in the next few days.  But, whatever.....you guys can keep making up things that I didn't say....Hards, you, etc....it's fun to read. 

[forgetful]

I just hired a gal from Hulu that started for me 2 weeks ago....everyday she thanks me for getting her off the ship.  Interesting times.   People have NO IDEA and you can tell just by the messages in this thread.   Absolutely NO IDEA.

Whatever....I keep telling you where the answers are....go to the content companies, they drive the costs and because they have a free ride on customer care, delivery, and millions of people paying for their channels that don't want their channels because THEY force the distributors to do this, the pricing of a la carte will be through the roof and many choices will go bye bye.  Can't wait to see the gov't scream bloody murder when BET goes away.  Or Food Network.  Or ESPN at $25 to $30 a month.  Be careful what you wish for, which is also what I've told you guys the last few years.

Tick tock   

It seems to me that you do not understand business also.  ESPN cannot just charge $25-$30 a month, people have to be willing to pay it.  I don't care what their obligations are etc, it is only worth what people will pay.

Right now as you state ESPN is getting $7-8 per subscriber up to 100 million subscribers.  Of those 100 million, probably on the order of 30 million are willing to pay $7-8 for it.  So obviously the price would have to go up to maintain the same $700-800 million.

Now the problem is, how many of those 30 million would pay $15 for it?  If it is less than 15 million they are losing money by increasing the cost.  I am a sports fan and wouldn't pay $15 a month for it, I likely wouldn't pay $10.

So what happens then if they have to go ala carte?  They have to decrease costs or go bankrupt.  That means the drastic increases in sports right will retreat, contracts with NBA/NFL etc would be renegotiated (they would have to be).  The NFL/NBA may not want to do this, but they would also be forced to.

Similarly at network TV/HBO, costs will come down.

That is how business works.  Right now content providers can do anything they want, because the public has little other options.  As options increase, they must adapt (hence the move for some content providers HBO/CBS to modify strategy).  Right now the system is being artificially supported by monopolies.

Will some channels vanish…absolutely and thank god.  But the good content from each network will be preserved, because they have viewers.  That may mean instead of 200 channels we have 50, but the average content on those 50 will increase in quality.

[Chicos' Buzz Scandal Countdown]

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.

[ChicosBailBonds]

It seems to me that you do not understand business also.  ESPN cannot just charge $25-$30 a month, people have to be willing to pay it.  I don't care what their obligations are etc, it is only worth what people will pay.

Right now as you state ESPN is getting $7-8 per subscriber up to 100 million subscribers.  Of those 100 million, probably on the order of 30 million are willing to pay $7-8 for it.  So obviously the price would have to go up to maintain the same $700-800 million.

Now the problem is, how many of those 30 million would pay $15 for it?  If it is less than 15 million they are losing money by increasing the cost.  I am a sports fan and wouldn't pay $15 a month for it, I likely wouldn't pay $10.

So what happens then if they have to go ala carte?  They have to decrease costs or go bankrupt.  That means the drastic increases in sports right will retreat, contracts with NBA/NFL etc would be renegotiated (they would have to be).  The NFL/NBA may not want to do this, but they would also be forced to.

Similarly at network TV/HBO, costs will come down.

That is how business works.  Right now content providers can do anything they want, because the public has little other options.  As options increase, they must adapt (hence the move for some content providers HBO/CBS to modify strategy).  Right now the system is being artificially supported by monopolies.

Will some channels vanish…absolutely and thank god.  But the good content from each network will be preserved, because they have viewers.  That may mean instead of 200 channels we have 50, but the average content on those 50 will increase in quality.

I understand it fully.  You are technically correct, but not in the real world.  They know full well that people will bitch and moan about the prices going up, but they also know that most people are going to pay it and they are still going to be able to cover off on their liens.  That is why they signed up to pay for it in the first place to the NFL, NBA, MLB, etc....because they know the dollars are there.  Just as AMC knows people want to see their shows, etc, etc.

Trust me, I understand it fully, I'm paid to understand it and to understand how people truly behave, not what people "say" they will behave like.  There is a difference, a radical difference.   It's like watching people say they hate Congress and throw the bums out, but they love "their guy" and incumbants get elected at record numbers.

I disagree with your monopoly statement.  You're smarter than that, you know that isn't the definition at all.  I also think you truly don't understand what CBS or HBO are doing right now or you wouldn't make those comments.  Most of this is the media's fault in explaining the last few days, but that's because the media can't get out of their way fast enough while their stepping on their johnson.  Many of the same mistakes were made when HBO did their deal with Amazon and the horrendous reporting there.  Watch as the stories crystalize over the next few months and the realities come into play. People aren't going to like it, but it is what it is.  Content isn't free, most content doesn't even succeed, which is why they have to invest heavily in the hopes of a few winners hitting.  That isn't going to change, they aren't making widgets, thus they will continue to charge a ton of money.

[ChicosBailBonds]

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.

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.

OH. THE. IRONY.


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.

[forgetful]

I understand it fully.  You are technically correct, but not in the real world.  They know full well that people will bitch and moan about the prices going up, but they also know that most people are going to pay it and they are still going to be able to cover off on their liens.  That is why they signed up to pay for it in the first place to the NFL, NBA, MLB, etc....because they know the dollars are there.  Just as AMC knows people want to see their shows, etc, etc.

Trust me, I understand it fully, I'm paid to understand it and to understand how people truly behave, not what people "say" they will behave like.  There is a difference, a radical difference.   It's like watching people say they hate Congress and throw the bums out, but they love "their guy" and incumbants get elected at record numbers.

I disagree with your monopoly statement.  You're smarter than that, you know that isn't the definition at all.  I also think you truly don't understand what CBS or HBO are doing right now or you wouldn't make those comments.  Most of this is the media's fault in explaining the last few days, but that's because the media can't get out of their way fast enough while their stepping on their johnson.  Many of the same mistakes were made when HBO did their deal with Amazon and the horrendous reporting there.  Watch as the stories crystalize over the next few months and the realities come into play. People aren't going to like it, but it is what it is.  Content isn't free, most content doesn't even succeed, which is why they have to invest heavily in the hopes of a few winners hitting.  That isn't going to change, they aren't making widgets, thus they will continue to charge a ton of money.

Monopoly is a strong word (and technically not correct), but I tend to think in most of the consolidation (which can get complicated to examine) we have created pseudo-monopolies that quietly collude to the detriment of the consumer.  That is a personal opinion and I am fully aware that it can be countered.  Maybe we can discuss it sometime over a beer. 

As for the not understanding CBS/HBO's move.  I certainly may not.  I will eagerly watch how this plays out, but I think that a lot of people paid big money to understand how the tides move are missing the boat on this one.

[ChicosBailBonds]

Monopoly is a strong word (and technically not correct), but I tend to think in most of the consolidation (which can get complicated to examine) we have created pseudo-monopolies that quietly collude to the detriment of the consumer.  That is a personal opinion and I am fully aware that it can be countered.  Maybe we can discuss it sometime over a beer. 

As for the not understanding CBS/HBO's move.  I certainly may not.  I will eagerly watch how this plays out, but I think that a lot of people paid big money to understand how the tides move are missing the boat on this one.

No question, people paid big money and as I said two years ago, last year, etc (despite SixStrings BS), if one of them could do it and do it successfully, it would be HBO.  I was responsible for HBO, Sports, Showtime, etc businesses the last 6 years.  I know them like the back of my hand...they are one that "can" pull it off, but as you state it is going to take a lot of investment on their part and depending on how they price it, potentially a ton of risk.  The CBS thing, it's nothing.  Truly, it's nonsense noise right now, at least at this stage with that offering.  It's in O&O markets only (14 markets), with massive restrictions all over the place.  People are excited because everyone jumps to the conclusion on what it means.  When you get down to it, they're offering a way to monetize old content which they couldn't because they didn't join up with Hulu.  Will it expand and will they give additional rights?  Sure, they'll keep pushing until it hurts the golden goose, which for a broadcaster is something known as Retrans Fees.  The gov't, in their infinite wisdom, set it up so broadcasters can demand this from carriers DESPITE the fact anyone with a quality antenna within range of a signal can get it for free.

Those retrans fees and ad revenues keep broadcasters alive (NBC, FOX, ABC, CBS)...but that's also why so many of those broadcasters are diversified into cable (Comcast NBC, Fox Cable, Disney cable channels, etc).  That golden goose for Retrans and carriage is what drives the whole thing.  So honest, the CBS thing to me is fluff.  Sure, they'll get some numbers, but it's primarily to monetize old content.  Not a game changer.  I have no doubt they will push Showtime out in this model which I personally think is incredibly risky for them to do.  They don't have the brand, they have only 1 studio deal left and it sucks, and the money they make on carriage they cannot charge enough to cover the overhead of going OTT and get that price from the consumer.  They know it, too, but Les Moonves is a stubborn man.  Starz, it would be a deathknell if they tried it.  Epix might make a go, but they are small potatoes.

[MU Fan in Connecticut]

Probably takin' in a Gardner game as we type, aina?

Would be my guess too!

[chapman]

I hope the Atlantic can get some business sense....they say it would be $30 a month

Adweek...$30 for ESPN

Variety...$30 a month for ESPN./

Analysts say $30 a month

I'm willing to pay $50 for just ESPN since the total cost of what I actually want would go down by about $35 per month. Where do I sign up for this $30 bargain?

[Canned Goods n Ammo]

Chico's, you obviously knows the details better than everybody here, but is it possible you are too close to see the big picture?

5 years ago, cab companies never saw Uber coming. The idea that everybody would have smart phone and order from an app was insane.

Sometimes the "establishment" is too close and too established to truly see the big picture.

You're talking about contracts and financials for the networks/leagues/studios. We're all really approaching this from a consumer side.

(insert network/service) can charge whatever it would like, but the free market will determine what it's actually worth. Consumers say a lot of things, but we'll see what happens when the costs are cranked up. It's not inelastic.

I realize that content production (both live and recorded) is expensive. But, I also think that as consumer costs increase, it opens up a viable marketplace for alternative content. (we've already had that conversation though).

[ChicosBailBonds]

I'm willing to pay $50 for just ESPN since the total cost of what I actually want would go down by about $35 per month. Where do I sign up for this $30 bargain?

You will get your chance with DISH Network's new OTT product in a few months.  Here's the kicked, Disney put in a ceiling so they can only sell so many subscriptions to it because they need to preserve the revenue they make on the 97 million HH that they are in.

So I would suggest go and signup, it's perfect for someone that is single, or a sports only fan.  For the vast majority of homes where people have different interests, it doesn't work and ESPN would take a bath, which is why they aren't opening it up.

[ChicosBailBonds]

Chico's, you obviously knows the details better than everybody here, but is it possible you are too close to see the big picture?

5 years ago, cab companies never saw Uber coming. The idea that everybody would have smart phone and order from an app was insane.

Sometimes the "establishment" is too close and too established to truly see the big picture.

You're talking about contracts and financials for the networks/leagues/studios. We're all really approaching this from a consumer side.

(insert network/service) can charge whatever it would like, but the free market will determine what it's actually worth. Consumers say a lot of things, but we'll see what happens when the costs are cranked up. It's not inelastic.

I realize that content production (both live and recorded) is expensive. But, I also think that as consumer costs increase, it opens up a viable marketplace for alternative content. (we've already had that conversation though).

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 month

90M * $120 = $10,800,000,000 a month

10% 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.

[Ari Gold]

You should read the analysts at Morgan Stanley, Chase, etc that came out with their assessment today on this. Pretty funny stuff and I say that as someone now in the OTT space.

As one guy put it

$5.99 for CBS content, no sports, no live feeds
$7.99 for NBC and ABC and Fox (Hulu), no live feeds, no sports
$9.99 for Netflix
$24.99 to $29.99 for HBO

About $40, no ESPN, almost nothing live, no sports, limited to 2 streams max....etc.  As the Morgan Stanley analyst said...can't see this service getting more than a few million subs in 5 years, the value isn't there.

I guess i'm in that few million. I'm actually ok with paying for the above since it's cheaper than the $110/mo cable would cost. I'm not enough of a sports guy to need to have access to every NHL/MLB/NBA game

[ChicosBailBonds]

These are the likely options...no particular order

1)  HBO rolls out win a diluted product that has new shows, none of the older content, limited streams, etc for a price around $15
2)  HBO basically opens up HBO Go to everyone and prices it between $15 and $20 (similar to cable rates) and risks the huge marketing dollars currently spent by MVPDS for their product, has to ramp up on call center and marketing on their own, AND puts their TBS, TNT, Boomerang, Cartoon Network, CNN, etc businesses (ad revenue and carriage) at risk because they cannot survive on their own without broad distribution and if people bail on MVPDs just for HBO, they cripple their other businesses in the process
3)  HBO Go open to everyone at a much higher price as a stand alone, $25 to $30...preserves their revenue with MVPDs for the most part, captures the upside from the Cord Nevers (who will be pissed off at the price and once again be reminded the world doesn't run on pixie dust)

There are other scenarios, obviously, but these three are the most likely in my view and my interactions.  #2 is what entices HBO and also scares the crap out of their parent Time Warner Inc because of Turner Broadcasting.  They could obviously try and spin off HBO separately, and that changes the dynamic.  A very big HBO negotiation coming with two MVPDs in 2015.....tick tock....interesting times.

[mu03eng]

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 month

90M * $120 = $10,800,000,000 a month

10% 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.

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.