DIRECTV unlikely to keep NFL Sunday Ticket

[Bruce]

It is never going to happen. The math not only doesn’t work out, but the customer marketing doesn’t work out. The people that left are not random. They are, mostly, people that just don’t like sports, plus a few people who like money a little more. The sports fans have live TV.

The math does not work out with now 2 million ( and will increase) leaving every quarter and the loss of per sub fees.

And yes, ESPN can increase the per sub fees to make up the difference, but that could alienate the Providers, who would have to increase the monthly price too much and lose even more subscribers.

The RSNs tried that with Dish, who then dropped them, Dish then was making more profits because they no longer were paying the per sub fee and did not lower the prices.

Dish then realized the loss of subscribers at the time was minimal and the RSNs have been gone for a few years, my guess, never back to Dish.

ESPN only options-increase per sub fees, increase advertising, both in how many ads and what it charges Advertisers and offer all of ESPN to Cord Cutters to make up some of the per sub fees that were lost.

 

[Yespage]

Life is too short....

...to post excessively in this thread?

 

[SamCdbs]

You presume that ESPN, in its current form, is a viable business venture in the new reality. That somehow they will just “have” to sell it to you if you just hold out long enough.

Nope. ESPN’s business model was based on “everyone” paying for it via cable, et al. Even those who do not watch.

All the move to streaming only has done is outline just how many non sports fans there are, glad to be free of it.

But that does not mean that there is a viable price point for ESPN sold only to those who want it. So cable, et al, really just disappears tomorrow. Try $100/month on for just ESPN. The math just doesn’t work out.

 

[Bruce]

You presume that ESPN, in its current form, is a viable business venture in the new reality. That somehow they will just “have” to sell it to you if you just hold out long enough.

No one is talking streaming or being on Traditional Providers, in addition to, to make up the fees gone.

ESPN on Live TV and ESPN for Cord Cutters.

Nope. ESPN’s business model was based on “everyone” paying for it via cable, et al. Even those who do not watch.

And that business model is now broken, 30 million no longer pay for it, that number is now increasing every quarter by 2 million more leaving.

What is your solution for ESPN to gain back subscribers, wave fairy dust and people will come back to luxury TV as you described it?

All the move to streaming only has done is outline just how many non sports fans there are, glad to be free of it.

Many sports fans have left Live TV for a number of reasons.

I prefer to watch sports on a Streaming Service for the better quality.

Even ESPN on it’s TV Everywhere app looks better, since it is in 1080P and ESPN on Cable/Satellite is in 720P

But that does not mean that there is a viable price point for ESPN sold only to those who want it. So cable, et al, really just disappears tomorrow. Try $100/month on for just ESPN. The math just doesn’t work out.

If Cable/Sat. left tomorrow, yes they are in for a big hurt, so they need to get started, based on Nashguy’s post on what the Disney’s Chairman said, it sounds like plans are already being made.

 

[Juan]

What I envision happening at some point in the next few years after Disney makes ESPN available as a standalone DTC service -- maybe in the 2025-27 timeframe -- is that major MVPDs like Comcast and Charter (and perhaps also DISH/DirecTV, which will be merged together by then) will shift from selling the current kind of cable channel bundle that includes lots of channels owned by different companies toward just selling the individual apps owned by each individual company -- Disney's Disney+ and ESPN; Paramount's Paramount+; NBCUniversal's Peacock; WBD's HBO Max/Discovery -- but those apps will also come with the linear broadcast and cable channels owned by those same companies. So, for instance, subscribe to Disney+ and also get ABC, FX, FXX, Freeform, Disney Channel, Disney Jr., Nat Geo, etc. If you want the "full cable channel bundle," you'll need to subscribe to all the apps owned by those companies.

But when people dont subscribe or just bounce around from app to app..what happens then?

 

[NashGuy]

But when people dont subscribe or just bounce around from app to app..what happens then?

People will subscribe because, well, Americans like TV, including live sports. And if the only way to sign up for TV service is via apps, well, that's what folks will do. (If/when MVPDs switch to this system, I would imagine that they'll allow any existing customers still on the old-style commingled cable bundles to be grandfathered in on them for a few more years.)

As for bouncing around from app to app, yeah, that happens. To lessen that, I suspect we'll see an increase in a trend that's already begun, wherein the service providers (e.g. Disney+, HBO Max) give you a discount when you prepay for a year versus signing up month-to-month at the regular monthly rate. Currently it's often like getting 2 free months, i.e. you're paying 10x the monthly rate when you prepay for 12 months.

We know that the cost of these services will have to go up as they take on more and more of the content on linear networks (and as their old cable TV cash cow dries up), including the high-value live sports. Perhaps, though, the rate of price increase won't be as steep on the annual price versus the monthly price so that if you prepay for a year, you're only paying 9x or even 8x the cost of the regular monthly price. And they might make it more consumer-friendly by breaking up the annual cost and charging your card once each quarter if you have good credit (which is really just a backwards way of re-instituting optional annual contracts).

Also, by the time all this happens, there will definitely be more consolidation among traditional Hollywood media companies. Look at all the streaming services they have now: Disney+, Hulu, HBO Max/Discovery, Paramount+, Peacock, Showtime, AMC+, Starz, BET+, Noggin. Several of those won't exist in a few years, except perhaps as sub-brands inside of a larger combined service. So when consumers have fewer apps to cycle between, and we settle down to 4 or 5 major global mainstream entertainment apps (e.g. Netflix, Prime Video, Apple TV+, Disney+, and maybe one more from some combo of those above), there just won't be as many different options for consumers to bounce between. Most US households will keep at least 2 of them at a time, but many will have all of them. And as each service develops its own distinct brand, different households will increasingly become loyal to just the ones that appeal most to them and not worry about the stuff they're missing on the ones they don't take.

 

[NashGuy]

Now you may need to suck it up and at least pay the LOCAL TV fees (just along as internet only subs are not stuck with an $30/mo local tv fee) with that setup but pushing ESPN is to much in that setup.

In the all-streaming future I foresee, there is no "local TV fee". What's happening is that the national networks -- ABC, NBC, CBS, Fox -- are slowly divorcing themselves from their local affiliate stations (well, at least the majority of their affiliates which they don't directly own but are instead owned by companies like Nexstar, Sinclair, Gray, Scripps, etc.). Those local stations are already putting out their own streaming apps that include live and on-demand streams of all their local news/talk content for free.

So imagine it's 2027. The Live channel grid guide on my smart TV running Google TV pulls in all the free and subscription channels that I get from that various apps I have installed. Let's say I have the free app from my local NBC affiliate WSMV 4 (owned by Gray) installed, therefore "News 4 Nashville" appears as one of the live streaming channels in my grid guide. But it's just local content 24/7, nothing from NBC. Meanwhile, I also have the Peacock app installed, therefore "NBC" appears as another of the live channels in my grid guide. But it only features NBC national content -- during the daytime it's NBC national news and talk shows (e.g. umpteen hours of the Today show, NBC Nightly News w/ Lester Holt) and then after that it's their 2 hours of primetime shows, then late night talk shows. Maybe I get all that for FREE. But if I want the live sports content that's normally part of the NBC national stream, well, I have to be subscribed to Peacock Premium, otherwise most of the NBC live sports coverage gets blacked out with the live stream just displaying the message "Upgrade to Peacock Premium to watch live sports from NBC!"

 

[NashGuy]

Dish then realized the loss of subscribers at the time was minimal and the RSNs have been gone for a few years, my guess, never back to Dish.

Speaking of RSNs, looks like things are about to get interesting. Sinclair's Diamond Sports subsidiary took on a ton of debt to acquire all those former Fox Sports RSNs (now branded Bally Sports) and apparently they can't shoulder it. Reports are that they're getting ready to sell them off. Many observers have predicted that Diamond will end up in bankruptcy, so any potential buyers may wait it out until they get more desperate in hopes of buying at fire sale prices.

Sinclair’s Diamond Sports Reportedly Preparing RSN Sale

Diamond Sports, which owns 21 regional sports networks mostly under the Bally Sports brand, has as much as $8 billion in operating debt.

www.barrettsportsmedia.com

I really think this is why only 5 MLB teams opted into the Bally Sports+ DTC service. The MLB knew they were going to fail. What I suspect will end up happening is that a majority of MLB teams will opt into a league-wide DTC in-market service offered through the same app that already sells their out-of-market access (MLB.tv) while a few of the biggest, richest teams (e.g. Yankees, Cubs) go their own way with their own individually branded apps for in-market DTC.

 

[SamCdbs]

ESPN on Live TV and ESPN for Cord Cutters.

One is a product that makes sense, one is not. Why would anyone pay for linear TV if the goodness in it were available for cherry picking?

And that business model is now broken, 30 million no longer pay for it, that number is now increasing every quarter by 2 million more leaving.

Yes, lots of people that don’t like sports.

What is your solution for ESPN to gain back subscribers, wave fairy dust and people will come back to luxury TV as you described it?

Newsflash:

There may not be one.

The ESPN, et al, business model of “everybody” paying, even the MAJORITY that do not like sports, and then passing those huge $$ up to athletes, et al, is indeed broken. No one doubts that.

But, to yield the same $$ only from those who want it, you are looking at something like $100 to $150/month, just for the main sports channels. Plus $20 for an RSN. Plus what you are now paying for what should be a supplement like MLB.TV.

Most people cannot afford that. Is there a solution? Don’t know. I don’t see one. Sinclair is already on the verge of bankruptcy over its RSN deal. Disney has no way to, in the future, get enough subscribers to cover the costs of the rights it now has. Cannot do it, the math just does not work out.

Don’t own any Sinclair stock, sold my Disney last year. Don’t care.

Many sports fans have left Live TV for a number of reasons.

So they like sports, but don’t pay for them. Got it.

If Cable/Sat. left tomorrow, yes they are in for a big hurt, so they need to get started, based on Nashguy’s post on what the Disney’s Chairman said, it sounds like plans are already being made.

Cable, et al, “leave” the day they allow people to cherry pick it. Why would anyone pay for cable if they could get ESPN, et al, or whatever channels they want, a la carte.

As I said, years ago, a la carte is the most anti-consumer idea ever. Enjoy paying for dozens of streamers.

 

[Bruce]

Speaking of RSNs, looks like things are about to get interesting. Sinclair's Diamond Sports subsidiary took on a ton of debt to acquire all those former Fox Sports RSNs (now branded Bally Sports) and apparently they can't shoulder it. Reports are that they're getting ready to sell them off. Many observers have predicted that Diamond will end up in bankruptcy, so any potential buyers may wait it out until they get more desperate in hopes of buying at fire sale prices.

Who would want them in today’s market, a bunch of RSNs with ratings that get less and less every year and the content can be pulled off by the teams as soon as the contracts over, making the channel worthless.

They are also another channel, like ESPN, that needs everyone paying for it, no matter if they watch it.

DirecTV has the same problems, merger talks have failed for now, no one to sell it to, TPG Capital is stuck running a company that they just wanted to sell and make a quick buck on their 30% investment.

I really think this is why only 5 MLB teams opted into the Bally Sports+ DTC service. The MLB knew they were going to fail. What I suspect will end up happening is that a majority of MLB teams will opt into a league-wide DTC in-market service offered through the same app that already sells their out-of-market access (MLB.tv) while a few of the biggest, richest teams (e.g. Yankees, Cubs) go their own way with their own individually branded apps for in-market DTC.

I wonder how many more will subscribe to the MLB package if local in market was added, they already have 3.5 million a year sign up for it.

RSNs just do not get great ratings compared to the high per sub fee they do get.

I posted before, using the Yankees as a example, YES has a average of 400,000 a game watching it on TV, out of a population of 20 million in the NY Metro Area. that is terrible.

I love the MLB streaming service, picture and sound looks great, the stream never fails and I pay for the content I want, to be able to watch my home team here in Florida, Detroit Tigers.

I am also happy I am not forced to pay for a RSN I would never watch, I pay less for MLB Baseball and the NHL via ESPN+ then the RSN fee.

 

[Bruce]

One is a product that makes sense, one is not. Why would anyone pay for linear TV if the goodness in it were available for cherry picking?

That is what is happening now.

Why have linear TV when you can have the majority of the same content on streaming services and all the exclusives not on Linear TV for a less expensive price, also in better quality.

Cable, et al, “leave” the day they allow people to cherry pick it. Why would anyone pay for cable if they could get ESPN, et al, or whatever channels they want, a la carte.

Again, already happening, hence why so many studios have their own service.

As I said, years ago, a la carte is the most anti-consumer idea ever. Enjoy paying for dozens of streamers.

Why is it anti-consumer?

I think it is the most consumer friendly, for example, having Live TV, I am forced to have and pay per sub fees for channels I never watch, like Food Network and HGTV.

So when I cancel YTTV after the upcoming College Football Season, I get to choose what services I subscribe to, Discovery+ is one I will not.

Same for AMC+, the only reason I have it is because I received a deal of $20 for the year, if full price at the end of the year, I will drop, Peacock also until the Big Ten Season starts.

 

[NashGuy]

In the all-streaming future I foresee, there is no "local TV fee". What's happening is that the national networks -- ABC, NBC, CBS, Fox -- are slowly divorcing themselves from their local affiliate stations (well, at least the majority of their affiliates which they don't directly own but are instead owned by companies like Nexstar, Sinclair, Gray, Scripps, etc.). Those local stations are already putting out their own streaming apps that include live and on-demand streams of all their local news/talk content for free.

Here's a great example of how one major local station owner, Hearst, is using their local station teams across the nation to create their own non-news content that can feed their free streaming apps under Hearst's "Very Local" brand -- lifestyle/reality stuff like food, travel, crafting, true crime, etc.

Hearst Television Stations To Showcase Digital-First Shows on TV

Shows from its Very Local streaming service will air on stations in 26 Hearst TV markets during a weeklong showcase

www.tvtechnology.com

As the major broadcast nets divorce from the local affiliate stations, those stations' owner groups, such as Hearst, are essentially creating their own national networks to help fill in the content gaps left behind when the major network content is removed. Nexstar (the nation's largest owner of local stations) has gone so far as to create their own national news channel, NewsNation, and also just bought The CW, so they clearly have plenty of content to round out their offerings.

 

[Juan]

People will subscribe because, well, Americans like TV, including live sports. And if the only way to sign up for TV service is via apps, well, that's what folks will do. (If/when MVPDs switch to this system, I would imagine that they'll allow any existing customers still on the old-style commingled cable bundles to be grandfathered in on them for a few more years.)

As for bouncing around from app to app, yeah, that happens. To lessen that, I suspect we'll see an increase in a trend that's already begun, wherein the service providers (e.g. Disney+, HBO Max) give you a discount when you prepay for a year versus signing up month-to-month at the regular monthly rate. Currently it's often like getting 2 free months, i.e. you're paying 10x the monthly rate when you prepay for 12 months.

We know that the cost of these services will have to go up as they take on more and more of the content on linear networks (and as their old cable TV cash cow dries up), including the high-value live sports. Perhaps, though, the rate of price increase won't be as steep on the annual price versus the monthly price so that if you prepay for a year, you're only paying 9x or even 8x the cost of the regular monthly price. And they might make it more consumer-friendly by breaking up the annual cost and charging your card once each quarter if you have good credit (which is really just a backwards way of re-instituting optional annual contracts).

Also, by the time all this happens, there will definitely be more consolidation among traditional Hollywood media companies. Look at all the streaming services they have now: Disney+, Hulu, HBO Max/Discovery, Paramount+, Peacock, Showtime, AMC+, Starz, BET+, Noggin. Several of those won't exist in a few years, except perhaps as sub-brands inside of a larger combined service. So when consumers have fewer apps to cycle between, and we settle down to 4 or 5 major global mainstream entertainment apps (e.g. Netflix, Prime Video, Apple TV+, Disney+, and maybe one more from some combo of those above), there just won't be as many different options for consumers to bounce between. Most US households will keep at least 2 of them at a time, but many will have all of them. And as each service develops its own distinct brand, different households will increasingly become loyal to just the ones that appeal most to them and not worry about the stuff they're missing on the ones they don't take.

Thats hilarious..you need to look why satellite and cable are losing customers

 

[NashGuy]

Who would want them in today’s market, a bunch of RSNs with ratings that get less and less every year and the content can be pulled off by the teams as soon as the contracts over, making the channel worthless.

Yeah. I've been saying for a few years that sports, like most other first-run premium entertainment content, will mainly end up being sold directly to consumers by the studios that produce/own the content. And in the case of sports, the "studios" are the leagues/teams themselves, e.g. MLB, NBA, NHL. IDK, it's possible that the NHL, and maybe even NBA, follow the MLS's lead and get a major distributor to exclusively outsource the running of the DTC service to. But given the existence already of DTC out-of-market services/apps for MLB and NBA, I see them also handling their DTC in-market customers too. (NHL used to run their own DTC out-of-market app but then licensed that content exclusively to ESPN+ starting either last or this season.)

 

[NashGuy]

Thats hilarious..you need to look why satellite and cable are losing customers

Because folks are forced to buy the entire bundle of channels for $70+ per month, including lots of expensive sports that only a fraction of viewers watch? That's not how it works with streaming though. You'll be able to buy, say, 20% of the available first-run TV content within any single major streaming service. And that will include a sprinkling of major sports, appealing to casual fans. But if you're a big fan of a particular sport/team, well, you'll need their dedicated app to watch the great majority of their regular season games (whether in-market or out-of-market). And those fans will have to cough up some serious cash to do that. (There will be a shakeout in sports economics a few years down the road that'll be fun to watch.)

 

[Bruce]

Yeah. I've been saying for a few years that sports, like most other first-run premium entertainment content, will mainly end up being sold directly to consumers by the studios that produce/own the content. And in the case of sports, the "studios" are the leagues/teams themselves, e.g. MLB, NBA, NHL. IDK, it's possible that the NHL, and maybe even NBA, follow the MLS's lead and get a major distributor to exclusively outsource the running of the DTC service to. But given the existence already of DTC out-of-market services/apps for MLB and NBA, I see them also handling their DTC in-market customers too. (NHL used to run their own DTC out-of-market app but then licensed that content exclusively to ESPN+ starting either last or this season.)

They still do NHL Center Ice, did it last season even with the games on ESPN+.

 

[Juan]

Because folks are forced to buy the entire bundle of channels for $70+ per month, including lots of expensive sports that only a fraction of viewers watch? That's not how it works with streaming though. You'll be able to buy, say, 20% of the available first-run TV content within any single major streaming service. And that will include a sprinkling of major sports, appealing to casual fans. But if you're a big fan of a particular sport/team, well, you'll need their dedicated app to watch the great majority of their regular season games (whether in-market or out-of-market). And those fans will have to cough up some serious cash to do that. (There will be a shakeout in sports economics a few years down the road that'll be fun to watch.)

People will buy what they can afford

If you buy cable/satellite you buy everything( i agee)

But streaming you can buy paramount plus for 1 month then hbo the next thus dropping paramount..then netflix on the third..mainly because you can binge watch the show you like...sports wont work..it needs everybody to pay every month if they watch it or not...its gonna be a whole different reality for those greedy media companies if they switch 100% to streaming

 

[Bruce]

People will buy what they can afford

If you buy cable/satellite you buy everything( i agee)

But streaming you can buy paramount plus for 1 month then hbo the next thus dropping paramount..then netflix on the third..mainly because you can binge watch the show you like...sports wont work..it needs everybody to pay every month if they watch it or not...its gonna be a whole different reality for those greedy media companies if they switch 100% to streaming

Leaving every other month does not help with sports since they are on for months in a row (for example, College Football September til January-Bowl Games).

That is another reason why streaming services are so eager for sports and paying top dollar.

Also, as Nash says, the Annual deal helps also.

I have Annual deals with AMC+, Peacock (very discounted) and HBO ( normal discount).

The other services I have I pay for with gift cards I get with my Credit Card points-Hulu with Disney/ESPN, Netflix and YTTV.

 

[NashGuy]

They still do NHL Center Ice, did it last season even with the games on ESPN+.

Yeah, NHL Center Ice is an add-on to cable TV. My understanding is that they reduced the price down to about the same cost as ESPN+.

 

[NashGuy]

its gonna be a whole different reality for those greedy media companies if they switch 100% to streaming

Consumers are making the choice for them as we keep walking away from cable TV and switching to DTC streaming. At some point, the dam bursts and Disney/NBCU/Paramount/Fox can no longer withhold *any* of their content, including high-value sports, from DTC distribution. Because there are just too many of us on that side now who will simply never go back to paying $65+/mo for the cable bundle. Gotta reach consumers where they are. Netflix led, consumers followed.