[opendtv] Re: Sony To Take Viacom Over-The-Top | Multichannel

  • From: "Manfredi, Albert E" <albert.e.manfredi@xxxxxxxxxx>
  • To: "opendtv@xxxxxxxxxxxxx" <opendtv@xxxxxxxxxxxxx>
  • Date: Fri, 12 Sep 2014 21:23:25 +0000

Craig Birkmaier wrote:

> Please let me know when the ESPN and Viacom's of the world decide they can
> make more money by taking their most valuable content out of the bundle.

Craig, you can be astonishingly obtuse.

> The "eventually" part refers to the Millennials being ABLE to pay for
> ESPN. Today they are using the authentication credentials of their parents
> or a friend.

That's poppycock. Just something you dreamed up, to hang on to your mantra. 
Here, start with this. It's about soccer, but it shows where the wind is 
blowing:

--------------------------------------------------
http://soccerly.com/article/an3rocha/espn-tests-new-business-model-good-news-for-mls-fans

ESPN Tests New Business Model, Good News For MLS Fans
by Andres Rocha  on May.27.2014 

Everybody who believes in the MLS is looking for new ways to handle its 
content, whether is writing, posting, sharing or streaming it. Most of the 
companies who are involved in this venture have had to change their business 
model, the majority of these changes have been made by innovating different 
ways to have the fan get the most of the soccer experience, but it is still a 
business and there has to be company expansion and development in order to 
sustain the market's changing tides.

Following Netflix's success, other companies including ESPN are trying this new 
business model, specifically giving exclusive access to their site's stream of 
MLS games without fans needing to subscribe to any special Cable TV packages.

This is exactly the time to change because ESPN needs to have an advantage over 
FOX and Univision where they share rights over MLS over the next eight years.

According to ESPN President John Skipper, they're trying a new strategy in 
where they are they believe there could be more profit by engaging digital 
content with on-screen ads and a direct-to-consumer strategy.

"We've just got to think about other business models," Skipper said at last 
week's conference "We're not far along on any them, but we do think about how 
we might capture more money direct from consumers. You saw us buy MLS digital 
rights. It was a clue, but we still don't know what we will do with that. 
That's a direct-to-consumer package we bought. We could do it just like it's 
done now through multichannel distributors or we can do something different 
with it to go direct to consumer," he said.

There is no telling whether ESPN's endeavor will create a constant revenue 
stream, but what is certain is that MLS is growing immensely fast and the fans 
always get the biggest piece of the pie.
--------------------------------------------------

Here, let me repeat it for you:

"Following Netflix's success, other companies including ESPN are trying this 
new business model, specifically giving exclusive access to their site's stream 
of MLS games without fans needing to subscribe to any special Cable TV 
packages." And, "According to ESPN President John Skipper, they're trying a new 
strategy in where they are they believe there could be more profit by engaging 
digital content with on-screen ads and a direct-to-consumer strategy."

So, emphasis on ads, emphasis on direct to consumer, emphasis on no special 
cable TV bundle. Then there's this somewhat rambling NYT article from one year 
ago:

http://www.nytimes.com/2013/08/27/sports/ncaafootball/to-defend-its-empire-espn-stays-on-offensive.html?pagewanted=all&_r=0

After spending most of the time rehashing old stuff, you finally reach "Looking 
to the Future." Read it through. ESPN lost more than 1 million subscribers, 
between 2011 and 2013.

Look at this quote, which echoes what I've been trying to get across to you:

"Mr. Skipper described WatchESPN as 'a significant measure to preserve the 
current system. And if you can't preserve it, it's our best opportunity to 
convert to something new.'

"He added that while he could not imagine more than 10 percent of pay-TV 
subscribers cutting the cord, 'big numbers don't have to flee the system to 
have a profound effect on ESPN.'"

So, one year ago, the ESPN President acknowledged that what they were doing, 
offering ESPN online only as part of an MVPD bundle, was basically a desperate 
attempt to hang on to an old business model. And that even if theuy couldn't 
preserve the dinosaur model, this would make a future model (like direct 
online?) that much easier to migrate to. And this year, he started taking 
exactly that type of approach.

> The issue here is paying for the bundle.  Nothing has changed.

Bolderdash.

Bert

 
 
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