[opendtv] Re: The Motley Fool: Disney and ESPN Preparing to Go a la Carte
- From: Craig Birkmaier <craig@xxxxxxxxxxxxx>
- To: "opendtv@xxxxxxxxxxxxx" <opendtv@xxxxxxxxxxxxx>
- Date: Wed, 15 Oct 2014 10:18:02 -0400
On Oct 14, 2014, at 9:05 PM, Manfredi, Albert E <albert.e.manfredi@xxxxxxxxxx>
wrote:
>
> I wonder how Craig is going to explain this one away. This is not some MLS
> trial balloon. This article is about NBA games.
Nothing to explain away Bert. I already covered this when I posted the story
about the ESPN/NBA deal. And this story almost exactly parrots what I wrote.
ESPN is doing exactly what Skipper said they would do. They are adding a
premium direct-to-consumer Internet service on top of the content they are
licensing for the ESPN channels in the bundle.
>
> "Is a Netflix-style service the next thing in live sports and the downfall of
> the cable bundle?"
Only if the price is huge, or if people are willing to pay $5 or more to watch
a single game. The larger problem is that the most important rights are locked
up for years into the future.
> Here's the important part:
>
> "So, why is ESPN bothering with a direct-to-consumer outlet instead of just
> forcing another cable network on operators for $0.50 per subscriber. The only
> answer that makes sense is that it's a hedge.
A hedge perhaps, or a shrewd business decision to go after the much small
audience of sports fans who are willing to pay even more for their sports
addictions.
>
> "Many believe that the cable bundle's days are numbered, and ESPN doesn't
> want to be left out in the cold should the industry suddenly change. A
> streaming business will be its first foray into a direct-to-consumer
> business, so it can work out the kinks in its customer service and marketing
> approach while the stakes are still very small."
Yes the stakes are small with respect to these "market tests."
The stakes are huge for the channels in the extended basic bundle.
>
> And where have you seen this mentioned before:
>
> "Is traditional cable dying?
>
> "ESPN has made a lot of noise lately by buying and licensing rights to stream
> content over the Internet. More than anything though, ESPN should want to
> keep traditional cable alive. At least until it can **milk every last penny**
> out of the bundle format."
And this is EXACTLY what they are doing.
>
> True, the games they air on this OTT service, for now at least, will not be
> the same ones they broadcast in walled gardens. However, it is undeniable
> that ESPN is in fact streaming games independently of any MVPD bundles, over
> the Internet, and this will soon include NBA games.
And this is the key point Bert. They are doing what Skipper said they would do.
Looking for new opportunities to go direct-to-consumer, WITHOUT, threatening
the bundle.
Regards
Craig
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