DIRECTV unlikely to keep NFL Sunday Ticket

[Bruce]

Apple paid $87 million annually to bring 'Friday Night Baseball' to Apple TV+. Not sure If I agree that they know what they're doing after watching the broadcast or what they're paying for Friday Night games​

And that makes my point, they are going to use part of their incredible cash on hand ( Apple-over $200 Billion, Amazon-over $100 Billion) to take away the last things that were almost exclusive to Traditional Providers/Channels-Sports..

And Traditional Providers/Channels cannot compete, specially since over 30 million have left paid Live TV, that is a lot of per sub fees gone.

ESPN is rumored to get around $9 per sub, so with that many gone, that is $270 million in lost revenue, yearly $3.24 Billion and the increases in losses are continuing to get worse.

 

[dtv757]

Actually you can't..they never were exclusive..local games are ALWAYS on tv...back in the 60s they had local blackouts if the stadium sold out

I'm pretty sure on mobile, they were exclusive to vzw . Years later they went to yahoo mobile and now anyone can view the local game on your phone


2010- NFL Mobile Kicks Off With Verizon Wireless in April

 

[Juan]

I'm pretty sure on mobile, they were exclusive to vzw . Years later they went to yahoo mobile and now anyone can view the local game on your phone


2010- NFL Mobile Kicks Off With Verizon Wireless in April

Yahoo mobile was verizon for awhile..but who watches football on a phone?

 

[Yespage]

They haven't signed a deal...probably because the price is too high just for sunday ticket

I think they are holding out on the CFL streaming rights to be added. Go Argos!

 

[Juan]

I think they are holding out on the CFL streaming rights to be added. Go Argos!

Might make more money

 

[SamCdbs]

Let’s examine the voodoo economics here.

Yes, non-sports fans are going to streaming only. The previous paradigm for ESPN, et al, was “everybody” paid $X, whether they wanted ESPN, et al, or not. It was as if you could only buy a combo meal. Burger, fries, drink and you really don’t like fries. Somebody came along and offered to sell you just the burger, and you took them up on it.

The voodoo here is three fold.

First assuming that your dislike of fries, which pushed you make a decision, can be extrapolated with you as some sort of early-adopter. Nope, they just came out with something you were OK with. Others never will be.

Second, is the idea that Disney, et al, will someday “have” to sell ESPN, et al, to the streaming onlys. Well that assumes there is this big sea of people that want it. If they wanted it, they would have it. They walked away for the specific reason that they don’t want it. This, of course, extrapolates out to ST as well. Anybody that wants it, has it. Save for a few haters. You show ‘em. Likewise, for ESPN, and the price is about 12.50, not 9, per subscriber is assuming that they will just “make up” this revenue. This has two sub parts. Doing so undoes the millions they still take in from the forced sales to cable, dish, and online liner products, customers. But more importantly, and this is Disney’s problem and not mine, and Disney is a horrid company so great, its that the $12.50 price is based on “everybody” paying. Well it to only those that really want it and the price is going to be something like $90/month, and then we get into the region of people that just cannot afford it (remember when many of us warned you about how anti-consumer a la carte was going to be? )

Third, is the assumption that A or A have all this money and thus know how to make ST profitable. They don’t. No one does. A and A both understand that this product cannot make money, as, at $300. Making money on a cash basis is just not possible, as it would require over half of the people that watch the “free” games to sign up, which just isn’t happening.

Then we come to the foolishness about the ad revenue. The contract requires them to carry the national ads CBS and Fox sell, These are the two minutes per hour where the local stations carry the game.

So, math.

A one minute ad on the NFL afternoon sells for between $300K and $700K. Let’s go with the $700K.

700K x 2 (minutes) is 1.4M

There are 6 hours of football per Sunday in this package. 6 x 1.4M is 8.4M

There are 18 weeks in the regular season. 8,4M x 18 is 151.2M.

In other words Apple or Amazon, or both, could buy two minutes of ads on each hour of every game there is, seen not by the 2M or so with ST, but by the over 17M that watch on average the locally shown games.

Of course this assumes that anyone pays attention to ads, especially in the multi-TV public area like a sports bar or casino, rather than just turn their head to a different game. Which is, of course, silly.

 

[meStevo]

Yes, non-sports fans are going to streaming only.

I stopped here, because I'm a sports fan and I've been streaming only for years.

 

[Ronnie-]

I stopped here, because I'm a sports fan and I've been streaming only for years.

Here as well, and within the last year or two, getting close to the majority of people I personally have dealings with. From 20-80+ years old.

 

[Bruce]

Second, is the idea that Disney, et al, will someday “have” to sell ESPN, et al, to the streaming onlys.

No has said that, what has been said is ESPN is losing a lot of per sub fees because of the loss of subscribers from Traditional Providers, in the last eight years, including the first quarter/2022, we had 100 million, now down to 68 million.

Because of that, sooner or later, ESPN is going to have to look for other sources of revenue to make up those losses, the main reason is the cost of the rights to air sporting events, they always go up ( and they will go up even more now that Streaming Companies are going after the same rights).

How else can ESPN make more money, the answer is streaming.

Also this, the cord cutting is picking up, in the 2nd quarter, already more then 800,000 gone from Traditional Providers and that is with only Comcast, Charter and Fios reporting, so it looks to be another over 2 million gone, definitely not slowing down as you said it would.

Every 2 million sub loss is roughly $18 million gone from ESPN in per sub fees.

 

[Juan]

The good news is those who hate sports wont have to pay for it

But those who watch sports will pay through the nose for it because there will be far fewer people paying for sports

What a deal

The end result will less money for professional sports leagues...and lower player salaries...less revenue from advertisers due to fewer eyeballs watching sports

 

[SamCdbs]

Catch Peacock’s report today. Down almost a million. And they have that great baseball on Sunday mornings deal.

ESPN’s linear product, and if you do not have ESPN you simply are NOT a sports fan and if you have ESPN, you are not “streaming only”, no matter how much you “quit reading” after I said that, will NEVER be available outside the way it is available today. In a package of linear channels, distributed via cable, sats, or linear TV streamers like YTTV. Never.

Making it available a la carte voids every deal with every provider. As long as linear TV exists, and that is forever, ESPN, and all the other desirable channels will be only available in that manner.

 

[Juan]

No has said that, what has been said is ESPN is losing a lot of per sub fees because of the loss of subscribers from Traditional Providers, in the last eight years, including the first quarter/2022, we had 100 million, now down to 68 million.

Because of that, sooner or later, ESPN is going to have to look for other sources of revenue to make up those losses, the main reason is the cost of the rights to air sporting events, they always go up ( and they will go up even more now that Streaming Companies are going after the same rights).

How else can ESPN make more money, the answer is streaming.

Also this, the cord cutting is picking up, in the 2nd quarter, already more then 800,000 gone from Traditional Providers and that is with only Comcast, Charter and Fios reporting, so it looks to be another over 2 million gone, definitely not slowing down as you said it would.

Every 2 million sub loss is roughly $18 million gone from ESPN in per sub fees.

Here ya go

Paramount added millions of streamers but revenues plunged

Paramount+ Adds Strong 6.8 Million Subs In Q1, But Higher Streaming Costs Squeezes Profits At Parent

Paramount+ added 6.8 million subscribers last quarter to hit 40 million.

deadline.com

 

[Yespage]

The good news is those who hate sports wont have to pay for it

But those who watch sports will pay through the nose for it because there will be far fewer people paying for sports

Those that watch sports on regional sports channels and ESPN.

 

[Bruce]

Here ya go

Paramount added millions of streamers but revenues plunged

Paramount+ Adds Strong 6.8 Million Subs In Q1, But Higher Streaming Costs Squeezes Profits At Parent

Paramount+ added 6.8 million subscribers last quarter to hit 40 million.

deadline.com

And so?

What does that have to do with ESPN losing 32 million per sub fees in 8 years?

 

[Juan]

And so?

What does that have to do with ESPN losing 32 million per sub fees in 8 years?

Streaming is not equal to guaranteed cable income...too much churn...ESPN would need millions to subscribe all year but that aint happening with streaming

 

[Bruce]

Streaming is not equal to guaranteed cable income...too much churn...ESPN would need millions to subscribe all year but that aint happening with streaming

And there is not churn in cable/sat, 32 million now gone in 8 years, now we are at 2 million gone every quarter, if it stays at that pace, that is 40 million gone in 5 years, by then it will be unprofitable to run a cable/sat service.

The older customers are dying off, the younger, under 40, want nothing to do with Traditional Service.

So, what choice do they have but to go streaming.

And compared to cable/sat, there has been barely any losses in the streaming world.

Also your link about Paramount+ does not show any loss, only that they are putting money into the service based on future growth.

 

[Juan]

And there is not churn in cable/sat, 32 million now gone in 8 years, now we are at 2 million gone every quarter, if it stays at that pace, that is 40 million gone in 5 years, by then it will be unprofitable to run a cable/sat service.

The older customers are dying off, the younger, under 40, want nothing to do with Traditional Service.

So, what choice do they have but to go streaming.

And compared to cable/sat, there has been barely any losses in the streaming world.

Also your link about Paramount+ does not show any loss, only that they are putting money into the service based on future growth.

Cable and satellite are harder to cancel..you can mix and match streaming services at will...no garuntee someone will subscribe to a streaming service for a year..you can cancel on a whim...cable or satellite takes planning

 

[SamCdbs]

Of course, it is a mistake to extrapolate the numbers about people dropping linear TV (and these are not reported, as the number that simply cord-switched from cable or satellite to a streaming linear service are not reported, but are certainly substantial) as some sort of trend.
Rather, a new choice was available, and those who want that choice, which, more than anything is to save $$ and do that because the do not like sports, which an outsized cost on linear TV. Those who want that choice have mostly all moved. We are very near to peak streaming.

The churn issue with streaming is also, certainly, a thing. The nature of the product makes it so that it is easy to go from one to the next to the next, Bingeing whatever you want and then moving on. It is the nature of the technology.

Sports (not ST, which is a different, automatically unprofitable, thing) are an attempt to work on this. So far, it is isn't working.

As to what alternative ESPN has, lots of people at Disney are working on that. Same at its imitators. As with any marketing question, there is not always an answer. ESPN can never sell the service a la carte. Doing so undoes all of its linear contracts. The price if ESPN were available a la carte to only those that want it (and, remember, most everyone who has gone streaming only, has done so because they do not want it, at least enough to overcome the pennies they are saving) would have to be huge. About $90 if you look at the ratings ESPN, and live sports more generally, gets and extrapolate that those are the people willing to pay as a fraction of the "everyone" who paid for it a few years ago. And that is just ESPN, you have to add in the Fox sports channels, the part time sports channels like TNT, TBS and USA, and the RSNs. We are looking at about $200/month just for sports. That won't work either.

Which, since it can never be sold a la carte, and those who do not wish to pay are no longer doing so, we are at the point where the bids for sports rights, and thus sports salaries, start to go down. Breaks my heart.

As to the unique thing that is ST, different rules apply. It is unprofitable on a cash basis, and will continue to be. The only question that remains is which of these two streamers will buy it and predicate access upon buying their general streamers, which many people, and most all public houses, have no use for.

 

[Juan]

Of course, it is a mistake to extrapolate the numbers about people dropping linear TV (and these are not reported, as the number that simply cord-switched from cable or satellite to a streaming linear service are not reported, but are certainly substantial) as some sort of trend.
Rather, a new choice was available, and those who want that choice, which, more than anything is to save $$ and do that because the do not like sports, which an outsized cost on linear TV. Those who want that choice have mostly all moved. We are very near to peak streaming.

The churn issue with streaming is also, certainly, a thing. The nature of the product makes it so that it is easy to go from one to the next to the next, Bingeing whatever you want and then moving on. It is the nature of the technology.

Sports (not ST, which is a different, automatically unprofitable, thing) are an attempt to work on this. So far, it is isn't working.

As to what alternative ESPN has, lots of people at Disney are working on that. Same at its imitators. As with any marketing question, there is not always an answer. ESPN can never sell the service a la carte. Doing so undoes all of its linear contracts. The price if ESPN were available a la carte to only those that want it (and, remember, most everyone who has gone streaming only, has done so because they do not want it, at least enough to overcome the pennies they are saving) would have to be huge. About $90 if you look at the ratings ESPN, and live sports more generally, gets and extrapolate that those are the people willing to pay as a fraction of the "everyone" who paid for it a few years ago. And that is just ESPN, you have to add in the Fox sports channels, the part time sports channels like TNT, TBS and USA, and the RSNs. We are looking at about $200/month just for sports. That won't work either.

Which, since it can never be sold a la carte, and those who do not wish to pay are no longer doing so, we are at the point where the bids for sports rights, and thus sports salaries, start to go down. Breaks my heart.

As to the unique thing that is ST, different rules apply. It is unprofitable on a cash basis, and will continue to be. The only question that remains is which of these two streamers will buy it and predicate access upon buying their general streamers, which many people, and most all public houses, have no use for.

OTA sports was very profitable for decades before cable and satellite even existed.

 

[SamCdbs]

OTA sports was very profitable for decades before cable and satellite even existed.

Yeah. At the rights fees, inflation adjusted, were miniscule compared to today. For example, the NBA got $1.5M the year ESPN launched. Its current contract is $2.2B.

Sports on TV before ESPN and TBS consisted of 4 to 6 hours on the weekends on three networks, the playoffs (one round) and World Series, and Monday night football. College football was one game of the week. Baseball got two, Saturday afternoon and Monday night. Football was 1 & 4 plus Monday night. The NBA was mostly on tape delay. College basketball was regularly broadcast in its regular season. In the largest cities, the local baseball, and in a few places, NHL team might have some locally produced games, but MLB's agreement with MiLB prohibited local telecasts being syndicated to other markets if the market had an MiLB team playing at home.

Max hours might be 20 in the largest city.