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WWE Network model will eventually be the ESPN Model
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jnewyouth Offline
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Post: #1
WWE Network model will eventually be the ESPN Model
WWE basically invented pay-per-view and now they're reinventing television again.

Next month, WWE is launching its streaming network for the price of $9.99 a month. This will include the full archive of all WWE/WWF, WCW, and ECW events, live streaming of all of their current shows (RAW, SMACKDOWN, MAIN EVENT, NXT), and will also live stream all pay-per-views (typically $50 per month). I, and many others will be ordering this for the pay-per-view value alone and will stream it on my Wii in one room, blue ray player in my bedroom, Smart Tv in my basement, and Roku in my son's room.

This will be very successful and I see ESPN following the lead very soon. Imagine if you could pay $10 a month directly to ESPN to get all of the ESPN live channels as well as an archive of past sporting events to stream.

I don't know about you, but I could easily cut my $120 per month cable bill ($180 if I order a WWE pay-per-view) and replace it with free network television, WWE TV, ESPN networks, Amazon Prime Streaming, and Netflix for a total of $40 a month. This is exactly how a-la-cart will happen and WWE will prove it.

Someone tell me I'm crazy.
(This post was last modified: 01-15-2014 04:52 PM by jnewyouth.)
01-15-2014 04:48 PM
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jnewyouth Offline
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Post: #2
RE: WWE Network model will eventually be the ESPN Model
Let me add that this could also be the model for any individual conference. I would pay $10 a month to add an American Conference network and still save $70 a month from my current bill.
01-15-2014 04:50 PM
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NBPirate Offline
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RE: WWE Network model will eventually be the ESPN Model
and guess who is an ECU alum and donor? Vince McMahon.
01-15-2014 04:56 PM
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brista21 Offline
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RE: WWE Network model will eventually be the ESPN Model
All I'm going to say about ala carte pay television is be careful what you wish for.
01-15-2014 05:02 PM
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PirateTreasureNC Offline
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RE: WWE Network model will eventually be the ESPN Model
(01-15-2014 05:02 PM)brista21 Wrote:  All I'm going to say about ala carte pay television is be careful what you wish for.

YUP, the data rates you might get on the back end for using your internet more heavily for large file streaming/downloading might come back to you on the back end.
01-15-2014 05:07 PM
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jnewyouth Offline
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RE: WWE Network model will eventually be the ESPN Model
(01-15-2014 05:02 PM)brista21 Wrote:  All I'm going to say about ala carte pay television is be careful what you wish for.
I agree to a point.
If ala cart tv is all that is available, we will be raped with fees. If consumers have a choice between ala cart and cable or dish subscription though, competition should drive prices down on both ends.
01-15-2014 05:08 PM
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Wedge Offline
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RE: WWE Network model will eventually be the ESPN Model
(01-15-2014 04:48 PM)jnewyouth Wrote:  WWE basically invented pay-per-view

You mean they invented it 40 years after boxing did?
01-15-2014 05:21 PM
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TomThumb Offline
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RE: WWE Network model will eventually be the ESPN Model
The problem with applying this model to ESPN and conference networks is that they have contracts in place that probably won't allow this. ESPN uses the fact that customers will be irate if they can't access ESPN as a big weapon in negotiations to drive up the fees they get from cable companies. If customers have an easy way to get ESPN online, the cable companies would be less willing to fork over all that money in fees.

Think about it this way, if ESPN offered a service like this, most of the hardcore fans on this forum would probably get it even though they already have ESPN on cable because of all the added features over just a standard cable channel. All the replays and such. Next time ESPN fee negotiations came up, most of the most hardcore fans who couldn't live without ESPN would already have their streaming channel so wouldn't really miss ESPN dropped from the cable lineup as much.

A la carte is going to hurt ESPN and the conference networks way more than the cable companies since many cable companies are monopolies anyway.

WWE can move to this model because they were already heavily a la carte. PPV is like a la carte taken to an extreme.
01-15-2014 05:23 PM
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gulfcoastgal Offline
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Post: #9
RE: WWE Network model will eventually be the ESPN Model
We're getting this over my objections. Thanks for the details. I couldn't quite follow it the other night at the dinner table...boys talking over each other and such, but hubby knew what it was. We're also Spring Breaking in New Orleans this year. I was excited until I found out it coincides with wrestlemania. That's what I get for letting my boys plan vacation. At least I'll eat good. :/
01-15-2014 05:41 PM
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moo Offline
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Post: #10
RE: WWE Network model will eventually be the ESPN Model
Quote: WWE can move to this model because they were already heavily a la carte. PPV is like a la carte taken to an extreme.

Yup. WWE fans are used to paying fees per event, so they won't balk at this. Many WWE fans I know are thrilled about the network and the fee. I mean, when you pay what, $50 per event, $10 per month is downright cheap.

There is NO WAY that ESPN would sell all its live content for $10 per month. Just no way.

Note that DirecTV is not thrilled at all with the WWE's plans and is on the verge of severing their ties.
01-15-2014 06:47 PM
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dbackjon Offline
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Post: #11
RE: WWE Network model will eventually be the ESPN Model
(01-15-2014 05:07 PM)PirateTreasureNC Wrote:  
(01-15-2014 05:02 PM)brista21 Wrote:  All I'm going to say about ala carte pay television is be careful what you wish for.

YUP, the data rates you might get on the back end for using your internet more heavily for large file streaming/downloading might come back to you on the back end.
Especially with net-neutrality going away.

Your internet provider could start charging you for access to these sites...
(This post was last modified: 01-15-2014 06:54 PM by dbackjon.)
01-15-2014 06:52 PM
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krup Offline
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Post: #12
RE: WWE Network model will eventually be the ESPN Model
(01-15-2014 06:52 PM)dbackjon Wrote:  
(01-15-2014 05:07 PM)PirateTreasureNC Wrote:  
(01-15-2014 05:02 PM)brista21 Wrote:  All I'm going to say about ala carte pay television is be careful what you wish for.

YUP, the data rates you might get on the back end for using your internet more heavily for large file streaming/downloading might come back to you on the back end.
Especially with net-neutrality going away.

Your internet provider could start charging you for access to these sites...

A lot of people in this thread seemed to have missed that court decision.

Instead of dropping your $100 cable TV and streaming your internet through your $50 broadband, that data charge is going to go up to $100 a month and you might see some concessions by the cable companies (a la carte or at least more bundling options) to make the TV prices more competitive and discourage cord-cutting.
01-15-2014 07:59 PM
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gulfcoastgal Offline
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RE: WWE Network model will eventually be the ESPN Model
Question: Satellite is the only option where we live. We pay for HBO, Cinemax... and are considering canceling due to lack of content. Is it worth it to pay for the WWE channel or summer slam and wrestle mania twice a year. Yes, I'm embarrassed asking this in the first place.
01-15-2014 08:32 PM
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Wedge Offline
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Post: #14
RE: WWE Network model will eventually be the ESPN Model
(01-15-2014 07:59 PM)krup Wrote:  
(01-15-2014 06:52 PM)dbackjon Wrote:  
(01-15-2014 05:07 PM)PirateTreasureNC Wrote:  
(01-15-2014 05:02 PM)brista21 Wrote:  All I'm going to say about ala carte pay television is be careful what you wish for.

YUP, the data rates you might get on the back end for using your internet more heavily for large file streaming/downloading might come back to you on the back end.
Especially with net-neutrality going away.

Your internet provider could start charging you for access to these sites...

A lot of people in this thread seemed to have missed that court decision.

Instead of dropping your $100 cable TV and streaming your internet through your $50 broadband, that data charge is going to go up to $100 a month and you might see some concessions by the cable companies (a la carte or at least more bundling options) to make the TV prices more competitive and discourage cord-cutting.

Yeah, the broadband providers (some of whom are also the TV providers) might now give you "net neutrality" for a price -- e.g., if you have broadband through TWC you might pay a higher price to get everything at a fast speed, or a lower price at which only websites owned by Time Warner (or that pay money to TWC) are streamed at a fast speed.

I'm sure the internet providers are drooling at the thought of charging Disney (owner of ESPN) and Google (owner of YouTube) lots of money to stream their websites at a fast speed.
01-15-2014 08:42 PM
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Frank the Tank Offline
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Post: #15
RE: WWE Network model will eventually be the ESPN Model
(01-15-2014 06:47 PM)moo Wrote:  
Quote: WWE can move to this model because they were already heavily a la carte. PPV is like a la carte taken to an extreme.

Yup. WWE fans are used to paying fees per event, so they won't balk at this. Many WWE fans I know are thrilled about the network and the fee. I mean, when you pay what, $50 per event, $10 per month is downright cheap.

There is NO WAY that ESPN would sell all its live content for $10 per month. Just no way.

Note that DirecTV is not thrilled at all with the WWE's plans and is on the verge of severing their ties.

That's a critical point. ESPN is getting $5 per month from EVERY cable household in America (nearly 100 million households). Considering that companies aren't in the habit of willingly making less money, ESPN alone could easily cost $30 or $40 per month (or more). NFW it's anywhere close to $10 per month. Think about what it costs just for a high profile boxing match on PPV. Every Monday Night Football game is worth more than. The new college football playoff games are worth more than that. The NBA conference final games are worth more than that. Those events alone would would garner $50 or more a pop if they had to be PPV and ESPN owns them all (and a LOT more). This is why I agree with brista21 - be VERY careful with what you wish for with a la carte. If you're a sports fan at any level, then it's a bad deal (regardless of whether you think you'd be saving money by not paying for the Big Ten Network or NBCSN or other channels that you say that you don't want to watch). If you're an over 50 woman that watches no sports at all and don't care about the networks that provide high quality scripted programming (i.e. TNT, AMC, FX, etc.) , then sure, a la carte is great because the channels that you like are cheap. I'm fairly certain that doesn't describe 99% of the people reading here.
01-16-2014 12:17 AM
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Ned Low Offline
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Post: #16
RE: WWE Network model will eventually be the ESPN Model
I'm not thrilled with the Net Neutrality decision, but I also believe that "they" should be able to charge what they want for access to their "stream", if that makes any sense. Granted, I may not understand the issues fully...

Could not the FCC simply rewrite the rules to get around the courts decision?
01-16-2014 01:00 AM
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Captain Bearcat Offline
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Post: #17
RE: WWE Network model will eventually be the ESPN Model
(01-16-2014 12:17 AM)Frank the Tank Wrote:  
(01-15-2014 06:47 PM)moo Wrote:  
Quote: WWE can move to this model because they were already heavily a la carte. PPV is like a la carte taken to an extreme.

Yup. WWE fans are used to paying fees per event, so they won't balk at this. Many WWE fans I know are thrilled about the network and the fee. I mean, when you pay what, $50 per event, $10 per month is downright cheap.

There is NO WAY that ESPN would sell all its live content for $10 per month. Just no way.

Note that DirecTV is not thrilled at all with the WWE's plans and is on the verge of severing their ties.

That's a critical point. ESPN is getting $5 per month from EVERY cable household in America (nearly 100 million households). Considering that companies aren't in the habit of willingly making less money, ESPN alone could easily cost $30 or $40 per month (or more). NFW it's anywhere close to $10 per month. Think about what it costs just for a high profile boxing match on PPV. Every Monday Night Football game is worth more than. The new college football playoff games are worth more than that. The NBA conference final games are worth more than that. Those events alone would would garner $50 or more a pop if they had to be PPV and ESPN owns them all (and a LOT more). This is why I agree with brista21 - be VERY careful with what you wish for with a la carte. If you're a sports fan at any level, then it's a bad deal (regardless of whether you think you'd be saving money by not paying for the Big Ten Network or NBCSN or other channels that you say that you don't want to watch). If you're an over 50 woman that watches no sports at all and don't care about the networks that provide high quality scripted programming (i.e. TNT, AMC, FX, etc.) , then sure, a la carte is great because the channels that you like are cheap. I'm fairly certain that doesn't describe 99% of the people reading here.

That's the great thing about a truly free-market economy. They don't have to be *willing* to charge less; they'll be forced to by the laws of economics.

ESPN has two main sources of revenue - cable fees and advertising. Correct me if I'm wrong, but advertising is currently the bigger chunk. If ESPN charges $30/month, their audience sizes would shrink to the point where their advertisers would no longer pay such high prices. But, as smaller players that aren't on basic cable start offering a la carte, the cable model will fall apart (because fewer and fewer people will pay for basic cable). At that point, ESPN will have a choice - become a la carte themselves and lose the massive advertising revenue, or offer their content for free and keep their large advertising revenue.

As a la carte gains traction, I think it's only a matter of time before ESPN becomes ABC.2 on over-the-air network programming as they seek the broad audiences that come with it.
01-16-2014 08:12 AM
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Tom in Lazybrook Offline
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Post: #18
RE: WWE Network model will eventually be the ESPN Model
Guys, at some point it isn't going to matter what games ESPN will play to try and protect its revenue stream. People aren't going to pay it. Eventually someone is going to start an internet broadcast news service, entertainment network, weather channel, etc. Watch that USSC case with Aereo as well (Aereo will likely win).

I'd rather not pay for Major League Baseball, NFL, NBA, NHL, etc. And at some point, I won't have to continue to pay for sports programming I don't want to.

This is coming. Within 5 years. And it will turn college sports on its head.

This could cause chaos in college football. Especially in top heavy conferences. For example, The UT Longhorn Network could be a problem for the Big XII, as there will likely be massive differentials between what UT, OU and OSU can receive for their product and what the others can demand. Florida State, VT, and Clemson have a LOT more support than Wake, Pitt, or Uva over in the ACC. This could even cause issues with the (gasp) SEC. This could cause conference shifts or possibly more schools to go independent (see UT). For the Big Ten, this will expose their decision to take Rutgers and Maryland (teams in huge markets that largely won't deliver them, especially when people are in a pay for view scenario).

For the G5 conferences, its a mixed bag. Most of these games will continue to be broadcast, either on cable or on broadcast internet. There will be more game choices for TV though. The Belt will end up with more exposure and probably a little more money. Everyone else will end up the same.

The coming changes to pay per view for NCAA football really could come down hard on low intensity teams in the P5, such as Iowa State, Baylor, Kansas, Texas Tech, Rutgers, Maryland, Pitt, Wake Forest, Vanderbilt, Ole Miss, Miss State, Kentucky, Purdue, Indiana, Washington State, and Oregon State if they get shut out of equal revenue by the greater producing conference members or in a worse case, get left behind when high earning conference mates just leave them.

The SEC - 10 high intensity/large fan bases, 4 lower intensity groups. Lowest chance of a split. There are too many good teams here that pull their own weight.
B1G - The B1G doesn't admit that they make mistakes. But I would imagine that Ohio State, Michigan, Penn State, Wisconsin and Michigan State might get a bit peeved about a greater and more obvious revenue distribution model.
BigXII - In serious danger of breaking up due to the extreme asymmetry of fan intensity/support. UT and OU are in a league by themselves. OSU carries their own weight. Tech, Baylor, Iowa State, and Kansas....not so much. If this model develops, watch for UT and possibly OU to go indy. Which would be catastrophic for some of the Big XII smalls. Baylor and Tech should be thankful for the GOR. But at some point, the differential in income might make that irrelevant.
ACC - A problem as well. Huge asymmetry in fan support. Clemson and Florida State are already not happy with the basketball focus. God help the lower teams if Florida State and Clemson start talking to UT and OU.
Pac12 - Pretty much evenly split. Everyone will be carrying Washington State, but that, plus geography, isn't going to be enough to knock that conference apart.

Certainly there are GOR's and exit fees to consider. But in a pay per view (or pay per channel) scenario, there are going to be some teams leaving a LOT more money on the table with their current conference affiliations.
01-16-2014 10:10 AM
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Tom in Lazybrook Offline
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Post: #19
RE: WWE Network model will eventually be the ESPN Model
(01-16-2014 08:12 AM)Captain Bearcat Wrote:  
(01-16-2014 12:17 AM)Frank the Tank Wrote:  
(01-15-2014 06:47 PM)moo Wrote:  
Quote: WWE can move to this model because they were already heavily a la carte. PPV is like a la carte taken to an extreme.

Yup. WWE fans are used to paying fees per event, so they won't balk at this. Many WWE fans I know are thrilled about the network and the fee. I mean, when you pay what, $50 per event, $10 per month is downright cheap.

There is NO WAY that ESPN would sell all its live content for $10 per month. Just no way.

Note that DirecTV is not thrilled at all with the WWE's plans and is on the verge of severing their ties.

That's a critical point. ESPN is getting $5 per month from EVERY cable household in America (nearly 100 million households). Considering that companies aren't in the habit of willingly making less money, ESPN alone could easily cost $30 or $40 per month (or more). NFW it's anywhere close to $10 per month. Think about what it costs just for a high profile boxing match on PPV. Every Monday Night Football game is worth more than. The new college football playoff games are worth more than that. The NBA conference final games are worth more than that. Those events alone would would garner $50 or more a pop if they had to be PPV and ESPN owns them all (and a LOT more). This is why I agree with brista21 - be VERY careful with what you wish for with a la carte. If you're a sports fan at any level, then it's a bad deal (regardless of whether you think you'd be saving money by not paying for the Big Ten Network or NBCSN or other channels that you say that you don't want to watch). If you're an over 50 woman that watches no sports at all and don't care about the networks that provide high quality scripted programming (i.e. TNT, AMC, FX, etc.) , then sure, a la carte is great because the channels that you like are cheap. I'm fairly certain that doesn't describe 99% of the people reading here.

That's the great thing about a truly free-market economy. They don't have to be *willing* to charge less; they'll be forced to by the laws of economics.

ESPN has two main sources of revenue - cable fees and advertising. Correct me if I'm wrong, but advertising is currently the bigger chunk. If ESPN charges $30/month, their audience sizes would shrink to the point where their advertisers would no longer pay such high prices. But, as smaller players that aren't on basic cable start offering a la carte, the cable model will fall apart (because fewer and fewer people will pay for basic cable). At that point, ESPN will have a choice - become a la carte themselves and lose the massive advertising revenue, or offer their content for free and keep their large advertising revenue.

As a la carte gains traction, I think it's only a matter of time before ESPN becomes ABC.2 on over-the-air network programming as they seek the broad audiences that come with it.

That is a possibility as well. But if ESPN cannot charge people for their service that don't watch it frequently (as they do now) that money will be lost for them to pay conferences for programming. This could be a disaster for some of the P5 conferences. With internet broadcasting, ESPN will have to pay much more to lock up programming. With lower revenues, they won't be able to.
01-16-2014 10:17 AM
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Frank the Tank Offline
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Post: #20
RE: WWE Network model will eventually be the ESPN Model
(01-16-2014 08:12 AM)Captain Bearcat Wrote:  That's the great thing about a truly free-market economy. They don't have to be *willing* to charge less; they'll be forced to by the laws of economics.

ESPN has two main sources of revenue - cable fees and advertising. Correct me if I'm wrong, but advertising is currently the bigger chunk. If ESPN charges $30/month, their audience sizes would shrink to the point where their advertisers would no longer pay such high prices. But, as smaller players that aren't on basic cable start offering a la carte, the cable model will fall apart (because fewer and fewer people will pay for basic cable). At that point, ESPN will have a choice - become a la carte themselves and lose the massive advertising revenue, or offer their content for free and keep their large advertising revenue.

As a la carte gains traction, I think it's only a matter of time before ESPN becomes ABC.2 on over-the-air network programming as they seek the broad audiences that come with it.

No, that's not correct. ESPN's subscriber fees are what make the network the single most valuable entertainment or media company in the WORLD. ESPN alone is worth more than the rest of the Walt Disney Company COMBINED because of those subscriber fees. They make half a billion dollars per month from subscriber fees - $6 billion per year - before they even sell a single minute of advertising. That's why the over-the-air networks themselves want to get their own subscriber fees - see CBS pulling their over-the-air stations from Time Warner Cable back in August - because they are MUCH less profitable than their own cable counterparts. Over-the-air ABC is now a rounding error in terms of valuation than commonly-owned ESPN.

Regardless, my point isn't that a la carte won't ever come (maybe it will, maybe it won't), but rather it's not going to result in the cost savings that people want. Ultimately, the premium players will raise their prices to the point where you're essentially going to pay about the same for 30 or so channels (or a handful of web aggregators like Netflix, Hulu, and a sports equivalent like ESPN3) than you are now for 200-plus channels. A lot of channels will die in an a la carte world, which might be fine to us sitting here in theory, but then it also kills the very allure of a la carte in the first place since the only ones strong enough to survive are the very broadest audience cable channels of ESPN, TNT, TBS, and a handful of others (i.e. the cable channel lineup that we had in 1990). We seem to have this idea that we're going to have an a la carte menu of the 200-plus channels that we have now, when the reality is that the a la carte menu will get reduced to around 30 networks (which then becomes much less attractive because the choices that you originally wanted aren't there anymore).

What's more likely than a la carte (which just isn't sustainable financially) are the more web aggregators like Netflix, Hulu, YouTube and Amazon Prime, provided that the possible killing off of net neutrality doesn't severely curb that (as the Internet bandwidth in the US is disproportionately eaten up by those particular streaming sites). That's all well and good, but that's NOT a la carte. Those websites take a lot of content from a lot of different sources and put them in one place - essentially, it's what is on your cable package on demand (minus the sports, of course). Netflix and Amazon are starting to make original programming, but the bulk of their libraries are still based upon shows originally aired on cable that were paid for by... cable subscriber fees. That's much different than picking and choosing individual cable channels. I could see ESPN3 emerging as the sports equivalent, but that's not going to come very cheap if we ever have to pay for it on a per month basis.

I just don't think a lot of people are thinking this through. All they think is, "My cable bill is going to get cheaper! Sign me up!" They're not looking at the long-term effects when the channel choices that made a la carte attractive in the first place end up going away.
01-16-2014 10:30 AM
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