[opendtv] Re: I meant ESPN, not HBO

From: Craig Birkmaier <craig@xxxxxxxxxxxxx>
To: "opendtv@xxxxxxxxxxxxx" <opendtv@xxxxxxxxxxxxx>
Date: Sat, 25 Oct 2014 09:49:06 -0400
> On Oct 24, 2014, at 8:34 PM, Manfredi, Albert E 
> <albert.e.manfredi@xxxxxxxxxx> wrote:
> 
> Already responded to that in another post. Recreating the exact bundle on OTT 
> sites is not the point of this exercise. Might as well use TVE and be done 
> with it. I've long understood that *if* you want all of the bundle's content, 
> the existing bundle most likely *is* the cheapest way of delivering it!

I did not recreate the exact bundle. I created a tiny fraction of the content 
in the bundle. The reality is that people only watch a small fraction of the 
available channels, but different family members typically have a different set 
of channels they watch.

No doubt some people will get by with a few OTT subscriptions, as is the case 
today with many Millennials. All I am trying to point out is that these new 
"breakthrough" offerings do not threaten the extended basic bundle; if 
anything, they reinforce the perception you state above - "the existing bundle 
most likely *is* the cheapest way of delivering it!"
> 
> 
>> First, $10/mo is less than twice the average subscriber fee they get now.
> 
> I doubt that. The MVPDs charge about $6 for ESPN. From what I've seen here 
> and there, ESPN gets something in the $4 range from the MVPDs, per sub per 
> month.

Please provide even one credible link that says the MVPDs share in the average 
$6/mo that ESPN receives for easy subscriber.

Craig wrote:
> 
>> And you assume that everyone now paying $5+ per month will agree
>> to pay $10.
> 
> That's not the issue! Everyone is now paying upwards of $100 many times, and 
> all they want is maybe, broadcast channels, ESPN, HBO, and Showtime. So for 
> that, they can do what I do for the broadcast channels, and pay $10 each for 
> the remaining three content sources. They'll come out way under that $100.

It IS the issue Bert. If you change the business model you will need to deal 
with the loss of people who pay but don't watch AND people who will choose not 
to pay the increased price.

And nobody is paying $100/mo for the extended basic bundle...at least not yet. 
We are paying about $120/mo for:

High speed broadband
HD extended basic bundle
HD DVR
And close to $30/mo in taxes

> They *are* getting a pay cut now, so they will want to at least recoup their 
> losses, and preferably get a raise. Can't do that by sitting still, Craig, in 
> spite of what your tell us. Once again, since you seem to forget. ESPN and 
> HBO are LOSING subscribers, and LOSING viewership.

They are not making less. Just look at the earnings announcements. The annual 
subscriber fee increases are balancing out losses in other areas.

What is taking a hit is advertising revenues. The cable up front was off 4% 
from recent years. The broadcast upfront was flat, but broadcast spot buying is 
down significantly. It is getting increasingly difficult to sell ads in pre 
produced appointment TV programming. The episodic TV market is moving toward ad 
free VOD services. 

This is why ESPN and other services that offer live content are growing more 
valuable, as people do make appointments to watch this stuff...and the ads.

> Obviously, a la carte is cheaper, since after all, I watch a la carte and pay 
> only by viewing ads. A la carte works if you want specific content only, and 
> not the fire hose. Getting water from a fire hose is most likely the cheapest 
> way to get water.

You do not watch ala carte.

You watch the stuff that is free.

Regards
Craig
 
 
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References:
- [opendtv] Re: I meant ESPN, not HBO
  - From: Manfredi, Albert E
[opendtv] Re: I meant ESPN, not HBO

Other related posts:
