[opendtv] Re: Cord Cutters Are Few, But Tons of Us Are Streaming Video | Fox News
- From: Craig Birkmaier <brewmastercraig@xxxxxxxxxx>
- To: opendtv@xxxxxxxxxxxxx
- Date: Sat, 23 Apr 2016 08:53:28 -0400
Regards
Craig
On Apr 22, 2016, at 9:48 PM, Manfredi, Albert E
<albert.e.manfredi@xxxxxxxxxx> wrote:
Prove it, Craig. The best you've come up with recently is 80%. We're way past
that.
No need Bert. There are multiple posts over the past few months that place the
number of MVPD subscribers between 70 and 75%. I'm not going to bore everyone
by resurrecting what is in the OpenDTV archives.
So 68% is it an outlier.
Prove that too.
It is a simple comment Bert. It is the only study I have seen placing the
number below 70%. Whether it is accurate or not really does not matter; it is a
new data point, which is why I posted the article. What is more important is
the fact that the article tells us:
Our surveys show that while traditional TV services continue to lose
customers, cord cutters makes up a trickle of users rather than a torrent.
Despite the widespread availability of both paid and free
advertising-supported streaming services, more than two-thirds of us—68
percent—still subscribe to a cable TV or similar pay TV service. Perhaps more
surprising is that nearly three-fourths of cable subscribers deciding to keep
cable say they won’t drop it because they’re relatively happy with their
provider.
Even if this is accurate - which is questionable - it does not
suggest massive cord cutting.
Define massive. That's 1/3 of the country, when not long ago you were saying
virtually everyone would be in walled gardens.
Virtually everyone is Bert. Netflix is a walled garden. Hulu is trying to move
people to a paid subscriber model. CBS is trying to get people to pay for
online access to the network.
While a significant percentage of people are moving away from the MVPD walled
gardens, most are moving to new walled gardens. The congloms are NOT moving
back to the FREE ad supported model of the last century. They are migrating
content to the Internet with new ways to pay for it.
The news about Starz is not unexpected. Like HBO
And like Showtime, ESPN, and a growing number of others:
http://www.businessinsider.com/espn-direct-to-consumer-2016-3
Pay attention Bert:
Iger said "price is the sticking point."
No doubt ESPN could offer direct access, but at what price?
Here is an article about this from Fox sports
http://www.foxsports.com/college-football/outkick-the-coverage/espn-has-lost-7-million-subscribers-the-past-two-years-112515
ESPN Has Lost 7 Million Subscribers The Past Two Years
First the bad news:
Given that the average ESPN subscriber pays $6.61 a channel per month, this
means that ESPN has lost somewhere in the neighborhood of $550 million in
subscriber revenue per year since 2013. (That's not counting advertising
dollar losses.) Moreover, the decline in subscribers over the past two years
is also hitting ESPN2, a loss of 7 million subscribers, ESPNNews, a loss of
six million subscribers, ESPN Classic, a loss of six million subscribers, and
ESPNU, a loss of four million subscribers.
Then the "good" news:
When Outkick wrote an article about its business challenges back in July,
ESPN sent a statement that included the following data: "More than half
(54%) tune into ESPN in the average month and almost two-thirds (65%) tune
into ESPN over the course of a quarter."
If that's true then around 48 million cable and satellite subscribers watch
ESPN every month. That's a very big number. But it also means means that 44
million cable and satellite subscribers pay $6.60 a month for ESPN and don't
watch it in an average month. That means every month ESPN is pocketing $290
million off cable and satellite subscribers who don't watch the channel. Over
the course of a year ESPN makes over $3 billion a year off consumers who
don't watch ESPN.
Then the bottom line reality:
And for those of you who say that ESPN should go over the top direct to
consumers -- first, they lack the contractual ability to do so without losing
their existing subscribers -- second, how many die hard sports fans are there
who would pay for ESPN standing alone? Right now you can get the ESPN
channels through the web already without a cable or satellite subscription --
for around $25 a month. That's a pretty good deal considering it also
includes several other channels, but it's only sustainable because 92 million
people are still subscribing to regular ESPN.
In order to net $6 billion at a $25 a month subscription pass for all ESPN
channels, ESPN would need 20 million yearly subscribers all paying $300 a
year just for the ESPN channels. Putting that into context, the NFL Sunday
Ticket on DirecTV has right at 2 million subscribers. If only two million
households are willing to pay around $300 for every NFL game that they can't
get for free on traditional television, would 18 million more be willing to
pay that much for over the top ESPN?
That seems like a challenge.
It's a classic Catch 22 dilemma Bert. They cannot afford to kill the cash cow.
They would need to price a direct service so high that it is a non starter.
The important consideration, as pointed out by Consumer Reports, is whether the
cord cutting trend is bottoming out. It is also important to consider whether
the congloms and MVPDs will adjust the pricing model to keep customers happy.
The space to watch here is slimmed down bundles delivered over the Internet. A
$40 - $50/month bundle could get MVPD subscriptions growing again...
And like HBO, they are not abandoning cable;
Customers are, Craig.
Some. But that's not what I was talking about. HBO and Showtime have always
been expensive premium add ons to cable service. Most MVPD subscribers who want
HBO or Showtime will keep buying it from the MVPD. Those who cut the cord can
buy it direct. The nature of these services allow both business models to
coexist.
The same cannot be said about the popular networks in the extended basic
bundle, including ESPN. This bundle survives because it is cheaper than buying
all the channels aka carte. As I stated above, if the industry slims down a
bit, it is likely to survive for a long time.
Regards
Craig
Other related posts:
- » [opendtv] Cord Cutters Are Few, But Tons of Us Are Streaming Video | Fox News- Craig Birkmaier
- » [opendtv] Re: Cord Cutters Are Few, But Tons of Us Are Streaming Video | Fox News- Manfredi, Albert E
- » [opendtv] Re: Cord Cutters Are Few, But Tons of Us Are Streaming Video | Fox News- Craig Birkmaier
- » [opendtv] Re: Cord Cutters Are Few, But Tons of Us Are Streaming Video | Fox News- Manfredi, Albert E
- » [opendtv] Re: Cord Cutters Are Few, But Tons of Us Are Streaming Video | Fox News - Craig Birkmaier
- » [opendtv] Re: Cord Cutters Are Few, But Tons of Us Are Streaming Video | Fox News- Manfredi, Albert E
- » [opendtv] Re: Cord Cutters Are Few, But Tons of Us Are Streaming Video | Fox News- Craig Birkmaier
- » [opendtv] Re: Cord Cutters Are Few, But Tons of Us Are Streaming Video | Fox News- Manfredi, Albert E
- » [opendtv] Re: Cord Cutters Are Few, But Tons of Us Are Streaming Video | Fox News- Craig Birkmaier
- » [opendtv] Re: Cord Cutters Are Few, But Tons of Us Are Streaming Video | Fox News- Manfredi, Albert E
- » [opendtv] Re: Cord Cutters Are Few, But Tons of Us Are Streaming Video | Fox News- Craig Birkmaier
- » [opendtv] Re: Cord Cutters Are Few, But Tons of Us Are Streaming Video | Fox News- Manfredi, Albert E
- » [opendtv] Re: Cord Cutters Are Few, But Tons of Us Are Streaming Video | Fox News- Craig Birkmaier