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+---- Thread: The Future Of TV Dollars (/thread-719572.html)
The Future Of TV Dollars - Hallcity - 12-18-2014 03:41 PM
Read SI's article on what happens as more viewers cut the cable. I have no idea what this will mean for the ACC or any other conference but it definitely means something, probably something big. I'm wondering if regional networks over broadcast stations will be the future of college sports TV. The ACC used to be the most profitable conference because of its regional broadcast network but that money was nothing like what ESPN is now paying.
RE: The Future Of TV Dollars - orangefan - 12-19-2014 10:00 AM
I'm not sure that there's much new here, but it is a good reminder that we may be early in a transitional period in which traditional business models for sports media will be disrupted just as they have been for many other industries. A couple of observations:
1) ESPN is contractually committed to pay the ACC a lot of money for a long time. ESPN owes the ACC around $4 billion for TV rights through the 2026-27 season. They also owe the ACC over $850 million for its share of CFP and Orange Bowl rights through the 2025-26 season. And don't worry, they're good for it because . . .
2) ESPN is not going anywhere anytime soon. ESPN is ridiculously profitable even with all of its high priced rights commitments and on air talent. My recollection from Disney's financial reports is that 1/2 of its revenue is pure profit. Its ability to monetize its investment through both subscriber fees and advertising revenue is unparalleled. Even if a significant percentage of subscribers cut the cord, ESPN's existing revenue streams will make it profitable.
3) Cable companies are so dependent on ESPN that they will do ANYTHING to help ESPN be successful. They will pay whatever price increases ESPN needs to offset subscriber erosion. If cord cutting starts to be a real problem, they could offer a starter service as they have with HBO with locals + ESPN and WatchESPN.
4) ESPN is well positioned for any change in the industry business model. It is clear that cord cutters are largely turning to internet based video services. The WatchESPN site/app is the leading internet based sports video service and nothing else is even close. WatchESPN provides ESPN the opportunity to evolve as customer preferences change, and even turn on a dime as HBO has recently done to offer the service directly to consumers without a cable subscription.
5) Content is King. Although ESPN has been extremely successful in creating a brand and a portfolio of leading events that arguably make the value of its service greater than the sum of its parts, at the end of the day, viewers turn to ESPN because it offers them access to must see games. Sports fans are loyal to their teams, and college fans are particularly loyal. This means that no matter where the games go (cable, over the air, internet video), fans will ultimately follow and their viewership can be monetized by the content aggregator, e.g. ESPN, through subscription fees and advertising.
RE: The Future Of TV Dollars - Marge Schott - 12-19-2014 10:20 AM
Cable isn't just going to die and it's not happening anytime soon.