[opendtv] Re: Electric power as a natural monopoly

  • From: "Manfredi, Albert E" <albert.e.manfredi@xxxxxxxxxx>
  • To: "opendtv@xxxxxxxxxxxxx" <opendtv@xxxxxxxxxxxxx>
  • Date: Thu, 13 Feb 2014 02:10:51 +0000

Craig Birkmaier wrote:

> According to this article ESPN will pull in $7.31 billion from
> cable subscribers in 2014.


> I assume that they use the term "cable" to include all MVPDs. This
> is almost double the revenues ESPN generates from advertising.
> According to the NewYorkTimes, only ~25% of cable subscribers
> actually watch ESPN. 


> By the way Bert, this article is well worth a read.

> The current subscriber fee for ESPN is about $5.50/month or
> $66/year. Some simple math tells us that without the bundles that
> cause 75% of cable subscribers to pay for a channel they don't
> watch, ESPN would need to charge the 25% who do watch about
> $260/year to Watch ESPN, to equal current subscriber fee
> revenues.

No big deal. About $22 per month. If it's true that only 25 percent are 
actually watching ESPN (seems kind of low to me).

> This is not an appealing option for ESPN, which has long term
> rights contracts based on this level of revenues.

Too bad, so sad. If the younger generation continues to show some backbone, 
Craig, the sports franchises (and/or ESPN) will *have* to make changes. Besides 
which, you (and ESPN) won't get a lot of sympathy from me if your business 
model depends on subsidized sports programming. I'd rather subsidize food 
stamps. All you're telling me is that the ludicrous incomes of these pro 
"athletes" are paid mostly by people who couldn't care less.

> Apple or Intel could better spend their billions buying up
> rights to sports, rather than trying to convince ESPN to risk
> killing the bundling cash cow.

Absolutely. Any OTT site should offer this to the sports leagues. And then, 
they can offer their viewers some different options than the old MVPD tier 
system. Sports nuts might find it acceptable to pay that $22 per month, if they 
didn't have to pay for all the rest that they don't use. And besides, if 
$22/mo. ends up being too high in the future, these overpriced athletes will 
get a dose of reality. You will only bring these absurd costs under control if 
people are paid what they are actually worth.

Unless you're feeling personally threatened, by the possibility of losing your 
subsidized ESPN, I'm not sure I understand why you insist on the MVPD tier 
model so much. Are you saying that the NFL et al would NOT do business with OTT 
sites, if they saw their MVPD subscriptions falling off?

> It may take an "Act of Congress" to kill the sacred bundling
> cow.

Not at all. All it will take is the newer generation continuing to resist 
paying subsidies. Your arguments all seem to hinge on why the existing players 
prefer it the way it is. Hey Craig, guess what, a lot of bookstores probably 
also thought that way. What happened to them, eh?


You can UNSUBSCRIBE from the OpenDTV list in two ways:

- Using the UNSUBSCRIBE command in your user configuration settings at 

- By sending a message to: opendtv-request@xxxxxxxxxxxxx with the word 
unsubscribe in the subject line.

Other related posts: