(02-11-2014 09:12 AM)Miami (Oh) Yeah ! Wrote:  CBS, CW, NBC, Fox, ABC all have 3 hours of new prime-time programming every night for free. Its not all old programming. There are plenty of live sports on the weekend. Amazon Prime is basically free to anybody who is a regular Amazon shopper and Crackle is totally free.

A 3mbps internet connection will power Amazon movies in HD just fine so if you got suckered into paying more than $29 for higher speed internet than you are overpaying. ESPN3 is free with your internet and has more NCAA basketball games than you could ever possibly watch and the NFL entire season and playoffs is free. If you have a must see TV show on basic cable like Discovery Channel than just pay $1.99 to watch on VUDU. MLB even gives away one free game a day on Roku.

For $29 a month for your internet there is nothing really you cant get with a Roku, TV Antenna, Sports Radio, and ESPN3.

Best of all instead on spending your entire evening and weekends being an unproductive couch potato watching TV all day, you can get some stuff done or go play a pickup game of basketball instead of gaining an extra 10 lbs.

You are correct that there is a significant amount of programming available for little (Netflix, etc.) or no (OTA) cost. If you are flexible about what you watch - you don't need to see the latest episode of Game of Thrones or this weekend's Alabama game - there is certainly good alternative programming available at a much lower cost. However, there is a growing body of high value programming that is only available if you pay for a full cost MSO service. Time Warner recently reported segment specific information for HBO that was revealing. It made $1.8 billion in profits last year, 25% of the company's total profits charging an average of $16/month over and above basic cable subscriptions to its 43 million U.S. subscribers. http://online.wsj.com/news/articles/SB10...41618.html

In the area of sports, this high value exclusive programming model includes all but a few regular season games of your favorite MLB, NBA or NHL team, most of the regular season games of your favorite college football or basketball team, the College Football Playoff, the Rose Bowl, most of the NCAA tournament (including 2 regional finals and the national semifinals this year), the MLB wild card games, Division Series, and one League Championship Series, the NBA playoffs excluding the NBA Finals, the NBA All Star Game, NFL Monday Night Football, the second half of the season of NFL Thursday Night Football. If you want any of these, you will need to pay, and ESPN will continue to make money even if it has to alter its business model.

(02-11-2014 09:44 AM)orangefan Wrote:  

(02-11-2014 09:12 AM)Miami (Oh) Yeah ! Wrote:  CBS, CW, NBC, Fox, ABC all have 3 hours of new prime-time programming every night for free. Its not all old programming. There are plenty of live sports on the weekend. Amazon Prime is basically free to anybody who is a regular Amazon shopper and Crackle is totally free.

A 3mbps internet connection will power Amazon movies in HD just fine so if you got suckered into paying more than $29 for higher speed internet than you are overpaying. ESPN3 is free with your internet and has more NCAA basketball games than you could ever possibly watch and the NFL entire season and playoffs is free. If you have a must see TV show on basic cable like Discovery Channel than just pay $1.99 to watch on VUDU. MLB even gives away one free game a day on Roku.

For $29 a month for your internet there is nothing really you cant get with a Roku, TV Antenna, Sports Radio, and ESPN3.

Best of all instead on spending your entire evening and weekends being an unproductive couch potato watching TV all day, you can get some stuff done or go play a pickup game of basketball instead of gaining an extra 10 lbs.

You are correct that there is a significant amount of programming available for little (Netflix, etc.) or no (OTA) cost. If you are flexible about what you watch - you don't need to see the latest episode of Game of Thrones or this weekend's Alabama game - there is certainly good alternative programming available at a much lower cost. However, there is a growing body of high value programming that is only available if you pay for a full cost MSO service. Time Warner recently reported segment specific information for HBO that was revealing. It made $1.8 billion in profits last year, 25% of the company's total profits charging an average of $16/month over and above basic cable subscriptions to its 43 million U.S. subscribers. http://online.wsj.com/news/articles/SB10...41618.html

In the area of sports, this high value exclusive programming model includes all but a few regular season games of your favorite MLB, NBA or NHL team, most of the regular season games of your favorite college football or basketball team, the College Football Playoff, the Rose Bowl, most of the NCAA tournament (including 2 regional finals and the national semifinals this year), the MLB wild card games, Division Series, and one League Championship Series, the NBA playoffs excluding the NBA Finals, the NBA All Star Game, NFL Monday Night Football, the second half of the season of NFL Thursday Night Football. If you want any of these, you will need to pay, and ESPN will continue to make money even if it has to alter its business model.

The difference is HBO makes its money off subscriptions. The sports still make more off advertising. Going to subscriber service cuts into their viewership and advertising $. Right now with BTN and the NFL network they get the best of both worlds. Wide distribution and subscriber fees.

(02-11-2014 08:38 AM)orangefan Wrote:  

(02-11-2014 01:34 AM)panama Wrote:  When you reduce your TV bill by 90% you while still having 99% of your programming you are not going to come back.

That's not going to happen, ever. Netflix alone costs 10% of my cable bill, operates on pretty thin margins, and it doesn't provide even 25% of cable's programming and you need to pay for high speed internet to deliver it on top of the programming cost.

Programming costs money, probably 1/2 the cost of your cable bill or more. It will undoubtedly be disaggregated, so that you buy programming separately from the physical delivery (broadband), but if you want that programming (something more than old movies and last year's episodes of prerecorded shows), you will have to pay. And, if cable companies can't recover their costs from TV service, they'll have to increase broadband charges to cover the costs of the physical delivery system.

Most people spend the vast majority of their TV time watching 8-10 channels. I would say everyone in my family spends 99% of their TV time on 8-10 or fewer.

(02-11-2014 09:32 AM)Miami (Oh) Yeah ! Wrote:  

(02-11-2014 09:23 AM)arkstfan Wrote:  How do most people get their internet? Either from the local cable company or the local phone company.

Neither wants their product to be a dumb pipe. They don't want to sell you access to the pipe, they want to sell the water in the pipe.

For all of Google's saber-rattling about getting in the pipe business they've done virtually nothing and it has been aimed mostly at fairly high density upper middle class neighborhoods.

Cable and phone are going to price internet access so that you bundle with TV content.

Data and info becomes cheaper, not more expensive. Remember when the phone companies charged $0.25 per minute for long distance? Its free now. Remember when you had to pay to read the newspaper? Its free now. Remember how expensive cell phones used to be, they are also declining in price and also offer internet service. There are more and more free wifi hot-spots popping up all over.

Internet will basically be free in the future. If you live downtown in a city you dont need to even pay for cell phone service anymore. Just buy an iPhone with wifi and walk around the city. There is not a street block that you can't catch a free Starbucks/McDonalds type wifi that you can use to make and receive free phone calls and connect on the internet from or text away for free.

The younger generation gets this and thats why they are the highest group who doesn't have cable or internet. Its not that they cut the cord and refused to quit paying, its that they never had a cord or subscription to begin with as they don't need it.

That's a tad utopian. We once thought nuclear power would make electricity free.

Very few people can sit in their living room and use free wifi from McDonalds or Starbucks or an unsuspecting neighbor.

My son broke down and bought internet service when he realized every wifi router in his apartment was protected and Dad wasn't going to pay for excess data charges on the cell phone.

While he and his friends eat a ton of data on tablets and smart phones, they all own the largest TV set they can afford to buy because they want to watch movies and sports in full glory and you aren't hauling a 55 inch TV down to a free wifi hotspot.

If you are lucky you have two competitors to choose from for internet. Much of America has one. We still have a decent number of people with no wired access at all.

Right now if you go to the cable or phone company to buy just internet they will generally quote you a crazy price but if you add TV service and/or phone service the prices get reasonable. I have the most basic UVerse TV package because I called to cancel and wanted to switch to just internet. They made me a sweet deal for faster internet as long as I kept my phone and the basic TV deal. I now pay less for internet, phone, and TV having Direct as my primary TV than I paid just having UVerse.

As long as the providers are skewing the market to prevent being a dumb pipe it will be hard for cord-cutting to gain serious traction.

The fact that ESPN makes $6 BILLION per year in profits tells me sports leagues are leaving a TON of money on the table.

ESPN is nothing but a middle-man content provider. As sports leagues understand how much of the $6 BILLION they can keep for themselves while avoiding ESPN siphoning off this money the more ESPN will be in trouble. The Pro Leagues understand this and are making changes. The NFL is launching their digital rights gamecenter like the other pro sports already have. They will have a selection of games on OTA as feature games to tie-in the broad audience and then when sell all the other games themselves through their own channel and digital channel. THERE IS NO NEED FOR ESPN. NBA, NHL, MLB also are doing the same. THERE IS NO NEED FOR ESPN.

The college world is lagging as they are a conference of schools and not a business but they are catching on too with the PAC12 channel and Big Ten owning half of the BTN. I think the SEC is making a huge mistake bringing in ESPN when they could go it alone.

ESPN is on the defensive here and they understand this and thus why they are running around frantically sewing up long-term college rights.

ESPN will still be profitable for a long time as they have long-term rights in contract, but they have peaked in both their profits and their need as a provider and middle man.

Aggregators perform a service that customers like. Most people when they shot online don't go from manufacturer to manufacturer. They go to Amazon or Best Buy who collect product from multiple makers.

I don't go to a butcher shop, then a produce market, then a canned goods store to buy groceries much less go to a dairy, a slaughterhouse, a farm, etc.

Most sports fans watch a variety of product. ESPN aggregates that content and repackages it and then the cable, sat, and telco companies bundle ESPN with other products.

Even Netflix and Hulu are aggregators cutting deals with various studios and networks for product just as the cable companies are.

Direct to consumer is a hassle for the consumer and because the volume of sales will be lower, the profit margin per transaction has to be higher.

ESPN is wildly profitable because no one else carries as big of a selection as they do. Between ABC, ESPN, ESPN2, ESPNU, ESPN Classic, ESPN News, they own vast market share

(02-11-2014 11:08 AM)arkstfan Wrote:  Aggregators perform a service that customers like. Most people when they shot online don't go from manufacturer to manufacturer. They go to Amazon or Best Buy who collect product from multiple makers.

I don't go to a butcher shop, then a produce market, then a canned goods store to buy groceries much less go to a dairy, a slaughterhouse, a farm, etc.

Most sports fans watch a variety of product. ESPN aggregates that content and repackages it and then the cable, sat, and telco companies bundle ESPN with other products.

Even Netflix and Hulu are aggregators cutting deals with various studios and networks for product just as the cable companies are.

Direct to consumer is a hassle for the consumer and because the volume of sales will be lower, the profit margin per transaction has to be higher.

ESPN is wildly profitable because no one else carries as big of a selection as they do. Between ABC, ESPN, ESPN2, ESPNU, ESPN Classic, ESPN News, they own vast market share

Not to mention ESPN can go to an advertiser and offer multiple broadcast options and bundle it for one price.

(02-11-2014 10:26 AM)Miami (Oh) Yeah ! Wrote:  ESPN is nothing but a middle-man content provider.

(02-11-2014 10:26 AM)Miami (Oh) Yeah ! Wrote:  THERE IS NO NEED FOR ESPN.

ESPN owns all of the rights to SEC games except those currently held by CBS until 2034. They own all of the rights to ACC games until 2027. They own the College Football Playoff and the six affiliated bowl games until 2027. They own Monday Night Football through 2021. Call them a middle man if you want, but you will have to pay them for the forseeable future if you want to see these games.

Also, ESPN may be a middle man but they are really good at it. The same games on other cable platforms just don't generate the same ratings. Ask the NFL (who just sold half the NFL Network package to CBS) or Fox (check out those miserable FS1 ratings). ESPN is the "go to" source for sports with a multiplatform promotional ability that turns games into events. Their market leader status, existing internet, cable and OTA platforms, and long term rights deals will allow them to transition profitably into whatever business model emerges for video content distribution.

(02-11-2014 11:37 AM)orangefan Wrote:  

(02-11-2014 10:26 AM)Miami (Oh) Yeah ! Wrote:  ESPN is nothing but a middle-man content provider.

(02-11-2014 10:26 AM)Miami (Oh) Yeah ! Wrote:  THERE IS NO NEED FOR ESPN.

ESPN owns all of the rights to SEC games except those currently held by CBS until 2034. They own all of the rights to ACC games until 2027. They own the College Football Playoff and the six affiliated bowl games until 2027. They own Monday Night Football through 2021. Call them a middle man if you want, but you will have to pay them for the forseeable future if you want to see these games.

Also, ESPN may be a middle man but they are really good at it. The same games on other cable platforms just don't generate the same ratings. Ask the NFL (who just sold half the NFL Network package to CBS) or Fox (check out those miserable FS1 ratings). ESPN is the "go to" source for sports with a multiplatform promotional ability that turns games into events. Their market leader status, existing internet, cable and OTA platforms, and long term rights deals will allow them to transition profitably into whatever business model emerges for video content distribution.

You didnt read my last paragraph as I stated pretty much all that you said.

This isn't a knock on ACC or Syracuse. They are not a business like the pro sports and they need ESPN more than the pro sports. And this is nothing to get defensive at as I know ESPN writes the checks to your school and I wasnt saying ACC money would go down as the need for ESPN fades away in the next decade or so. I was saying the ACC will actually make more money as the lessen what ESPN siphons away.

I also understand that ESPN creates the buzz and captures the broader audience. The NFL gets this too, thats why they keep feature games on OTA instead of using solely the NFL Network and Digital. They use OTA as the focal, buzz, storyline, and also the gateway to then direct the audience to the other 80% of their inventory that neither OTA and/or ESPN is needed for.

(02-11-2014 12:30 PM)Miami (Oh) Yeah ! Wrote:  

(02-11-2014 11:37 AM)orangefan Wrote:  

(02-11-2014 10:26 AM)Miami (Oh) Yeah ! Wrote:  ESPN is nothing but a middle-man content provider.

(02-11-2014 10:26 AM)Miami (Oh) Yeah ! Wrote:  THERE IS NO NEED FOR ESPN.

ESPN owns all of the rights to SEC games except those currently held by CBS until 2034. They own all of the rights to ACC games until 2027. They own the College Football Playoff and the six affiliated bowl games until 2027. They own Monday Night Football through 2021. Call them a middle man if you want, but you will have to pay them for the forseeable future if you want to see these games.

Also, ESPN may be a middle man but they are really good at it. The same games on other cable platforms just don't generate the same ratings. Ask the NFL (who just sold half the NFL Network package to CBS) or Fox (check out those miserable FS1 ratings). ESPN is the "go to" source for sports with a multiplatform promotional ability that turns games into events. Their market leader status, existing internet, cable and OTA platforms, and long term rights deals will allow them to transition profitably into whatever business model emerges for video content distribution.

You didnt read my last paragraph as I stated pretty much all that you said.

This isn't a knock on ACC or Syracuse. They are not a business like the pro sports and they need ESPN more than the pro sports. And this is nothing to get defensive at as I know ESPN writes the checks to your school and I wasnt saying ACC money would go down as the need for ESPN fades away in the next decade or so. I was saying the ACC will actually make more money as the lessen what ESPN siphons away.

I also understand that ESPN creates the buzz and captures the broader audience. The NFL gets this too, thats why they keep feature games on OTA instead of using solely the NFL Network and Digital. They use OTA as the focal, buzz, storyline, and also the gateway to then direct the audience to the other 80% of their inventory that neither OTA and/or ESPN is needed for.

No worries. Regarding the ACC - in hindsight, they signed a bad deal with ESPN in 2012, and they are going to be paying the price until 2027. Of course, the ACC's need to reopen this contract is what drove its addition of SU, Pitt and Notre Dame, so no complaints there. In general, college rights are considerably undervalued as compared to some pro rights. My calculation is that the highest rated equivalent number of ACC games deliver substantially more ratings points for ESPN than MLB, and ESPN is paying MLB 150% more ($280 million/year vs. $700 million/year). The ACC has better demographics too. Perhaps the difference is that MLB has options but the ACC really does not.

It is not unreasonable for someone to argue that ESPN has reached its peak. The current cable model is extremely beneficial to ESPN and it is hard to imagine how things could get better. "Nature abhors a vacuum" and competitive markets abhor high margins. However, although it is a free market it is not necessarily a competitive one. Despite declining subcribers and ratings last quarter, ESPN improved profits by 34%. The key for any business to maintain high margins is to offer premium products rather than commodities. My favorite team is a premium product and ESPN owns them until 2027. Bottom line - ESPN has pricing power and a defensible market position. Those who think ESPN is going to whither and die are in for a surprise. Like it or not, we are going to be making generous payments to ESPN for the remainder of our lifetimes!

(02-11-2014 02:34 PM)orangefan Wrote:  My calculation is that the highest rated equivalent number of ACC games deliver substantially more ratings points for ESPN than MLB, and ESPN is paying MLB 150% more ($280 million/year vs. $700 million/year). The ACC has better demographics too. Perhaps the difference is that MLB has options but the ACC really does not.

MLB is delivering ratings during the summer when it's more difficult to get sports fans to watch anything. Also, ESPN's deal with MLB, like their deal with the NFL, includes the rights to run a bazillion talking-head/highlight shows in addition to the live game telecasts.

ESPN apparently didn't make a serious bid for the new contracts for MLB playoffs that went to Fox and TBS. Maybe ESPN thinks that the playoff TV rights are overpriced given the competition from NFL and CFB games.

(02-11-2014 02:34 PM)orangefan Wrote:  

(02-11-2014 12:30 PM)Miami (Oh) Yeah ! Wrote:  

(02-11-2014 11:37 AM)orangefan Wrote:  

(02-11-2014 10:26 AM)Miami (Oh) Yeah ! Wrote:  ESPN is nothing but a middle-man content provider.

(02-11-2014 10:26 AM)Miami (Oh) Yeah ! Wrote:  THERE IS NO NEED FOR ESPN.

ESPN owns all of the rights to SEC games except those currently held by CBS until 2034. They own all of the rights to ACC games until 2027. They own the College Football Playoff and the six affiliated bowl games until 2027. They own Monday Night Football through 2021. Call them a middle man if you want, but you will have to pay them for the forseeable future if you want to see these games.

Also, ESPN may be a middle man but they are really good at it. The same games on other cable platforms just don't generate the same ratings. Ask the NFL (who just sold half the NFL Network package to CBS) or Fox (check out those miserable FS1 ratings). ESPN is the "go to" source for sports with a multiplatform promotional ability that turns games into events. Their market leader status, existing internet, cable and OTA platforms, and long term rights deals will allow them to transition profitably into whatever business model emerges for video content distribution.

You didnt read my last paragraph as I stated pretty much all that you said.

This isn't a knock on ACC or Syracuse. They are not a business like the pro sports and they need ESPN more than the pro sports. And this is nothing to get defensive at as I know ESPN writes the checks to your school and I wasnt saying ACC money would go down as the need for ESPN fades away in the next decade or so. I was saying the ACC will actually make more money as the lessen what ESPN siphons away.

I also understand that ESPN creates the buzz and captures the broader audience. The NFL gets this too, thats why they keep feature games on OTA instead of using solely the NFL Network and Digital. They use OTA as the focal, buzz, storyline, and also the gateway to then direct the audience to the other 80% of their inventory that neither OTA and/or ESPN is needed for.

No worries. Regarding the ACC - in hindsight, they signed a bad deal with ESPN in 2012, and they are going to be paying the price until 2027. Of course, the ACC's need to reopen this contract is what drove its addition of SU, Pitt and Notre Dame, so no complaints there. In general, college rights are considerably undervalued as compared to some pro rights. My calculation is that the highest rated equivalent number of ACC games deliver substantially more ratings points for ESPN than MLB, and ESPN is paying MLB 150% more ($280 million/year vs. $700 million/year). The ACC has better demographics too. Perhaps the difference is that MLB has options but the ACC really does not.

It is not unreasonable for someone to argue that ESPN has reached its peak. The current cable model is extremely beneficial to ESPN and it is hard to imagine how things could get better. "Nature abhors a vacuum" and competitive markets abhor high margins. However, although it is a free market it is not necessarily a competitive one. Despite declining subcribers and ratings last quarter, ESPN improved profits by 34%. The key for any business to maintain high margins is to offer premium products rather than commodities. My favorite team is a premium product and ESPN owns them until 2027. Bottom line - ESPN has pricing power and a defensible market position. Those who think ESPN is going to whither and die are in for a surprise. Like it or not, we are going to be making generous payments to ESPN for the remainder of our lifetimes!

Based on what I've read, I think ESPN is certainly looking at other models should the market conditions change dramatically.

The only thing ESPN lacks in its portfolio is significant NFL content.

ESPN has been locking as much as it can into very long (by TV terms) contracts. They buys them time to adjust to the new model. They have the most desired content so they carry the greatest leverage to the table whether it be an app subscription model or a model where internet providers pay to be able to distribute the content.

Right now Joe Consumer might not see the value in paying an extra $10 a month for 15mbps download vs. 10mbps but if 15mbps is $25 more a month and includes a free Hulu+ subscription and access to all WatchESPN content it suddenly seems important.

The people selling net access don't want to sell the pipe, they want to sell what is in the pipe. If they have to allow that free stream of a Sun Belt game through because net neutrality requires it they will. If they have to let your subscriber content from Netflix through so be it but they would rather bump your bill $15 a month and give half of it to Netflix and give you "free" Netflix access.

There's your real future.

You will be able to buy a cheap lower speed connection (maybe 3-5mbps downstream) but as you upgrade to faster speeds, you will also get "complimentary" access to products like Netflix, Hulu+, ESPN, and HBO.

(02-11-2014 03:18 PM)Wedge Wrote:  

(02-11-2014 02:34 PM)orangefan Wrote:  My calculation is that the highest rated equivalent number of ACC games deliver substantially more ratings points for ESPN than MLB, and ESPN is paying MLB 150% more ($280 million/year vs. $700 million/year). The ACC has better demographics too. Perhaps the difference is that MLB has options but the ACC really does not.

MLB is delivering ratings during the summer when it's more difficult to get sports fans to watch anything. Also, ESPN's deal with MLB, like their deal with the NFL, includes the rights to run a bazillion talking-head/highlight shows in addition to the live game telecasts.

ESPN apparently didn't make a serious bid for the new contracts for MLB playoffs that went to Fox and TBS. Maybe ESPN thinks that the playoff TV rights are overpriced given the competition from NFL and CFB games.

And ESPN has an abundance of content during the playoff window. Basically ESPN bought live content summer filler.

Baseball patterned their new playoff television coverage after the NBA to me. Cable for the Championship series then OTA for the World Series.

(02-11-2014 03:22 PM)arkstfan Wrote:  

(02-11-2014 02:34 PM)orangefan Wrote:  

(02-11-2014 12:30 PM)Miami (Oh) Yeah ! Wrote:  

(02-11-2014 11:37 AM)orangefan Wrote:  

(02-11-2014 10:26 AM)Miami (Oh) Yeah ! Wrote:  ESPN is nothing but a middle-man content provider.

(02-11-2014 10:26 AM)Miami (Oh) Yeah ! Wrote:  THERE IS NO NEED FOR ESPN.

ESPN owns all of the rights to SEC games except those currently held by CBS until 2034. They own all of the rights to ACC games until 2027. They own the College Football Playoff and the six affiliated bowl games until 2027. They own Monday Night Football through 2021. Call them a middle man if you want, but you will have to pay them for the forseeable future if you want to see these games.

Also, ESPN may be a middle man but they are really good at it. The same games on other cable platforms just don't generate the same ratings. Ask the NFL (who just sold half the NFL Network package to CBS) or Fox (check out those miserable FS1 ratings). ESPN is the "go to" source for sports with a multiplatform promotional ability that turns games into events. Their market leader status, existing internet, cable and OTA platforms, and long term rights deals will allow them to transition profitably into whatever business model emerges for video content distribution.

You didnt read my last paragraph as I stated pretty much all that you said.

This isn't a knock on ACC or Syracuse. They are not a business like the pro sports and they need ESPN more than the pro sports. And this is nothing to get defensive at as I know ESPN writes the checks to your school and I wasnt saying ACC money would go down as the need for ESPN fades away in the next decade or so. I was saying the ACC will actually make more money as the lessen what ESPN siphons away.

I also understand that ESPN creates the buzz and captures the broader audience. The NFL gets this too, thats why they keep feature games on OTA instead of using solely the NFL Network and Digital. They use OTA as the focal, buzz, storyline, and also the gateway to then direct the audience to the other 80% of their inventory that neither OTA and/or ESPN is needed for.

No worries. Regarding the ACC - in hindsight, they signed a bad deal with ESPN in 2012, and they are going to be paying the price until 2027. Of course, the ACC's need to reopen this contract is what drove its addition of SU, Pitt and Notre Dame, so no complaints there. In general, college rights are considerably undervalued as compared to some pro rights. My calculation is that the highest rated equivalent number of ACC games deliver substantially more ratings points for ESPN than MLB, and ESPN is paying MLB 150% more ($280 million/year vs. $700 million/year). The ACC has better demographics too. Perhaps the difference is that MLB has options but the ACC really does not.

It is not unreasonable for someone to argue that ESPN has reached its peak. The current cable model is extremely beneficial to ESPN and it is hard to imagine how things could get better. "Nature abhors a vacuum" and competitive markets abhor high margins. However, although it is a free market it is not necessarily a competitive one. Despite declining subcribers and ratings last quarter, ESPN improved profits by 34%. The key for any business to maintain high margins is to offer premium products rather than commodities. My favorite team is a premium product and ESPN owns them until 2027. Bottom line - ESPN has pricing power and a defensible market position. Those who think ESPN is going to whither and die are in for a surprise. Like it or not, we are going to be making generous payments to ESPN for the remainder of our lifetimes!

Based on what I've read, I think ESPN is certainly looking at other models should the market conditions change dramatically.

The only thing ESPN lacks in its portfolio is significant NFL content.

ESPN has been locking as much as it can into very long (by TV terms) contracts. They buys them time to adjust to the new model. They have the most desired content so they carry the greatest leverage to the table whether it be an app subscription model or a model where internet providers pay to be able to distribute the content.

Right now Joe Consumer might not see the value in paying an extra $10 a month for 15mbps download vs. 10mbps but if 15mbps is $25 more a month and includes a free Hulu+ subscription and access to all WatchESPN content it suddenly seems important.

The people selling net access don't want to sell the pipe, they want to sell what is in the pipe. If they have to allow that free stream of a Sun Belt game through because net neutrality requires it they will. If they have to let your subscriber content from Netflix through so be it but they would rather bump your bill $15 a month and give half of it to Netflix and give you "free" Netflix access.

There's your real future.

You will be able to buy a cheap lower speed connection (maybe 3-5mbps downstream) but as you upgrade to faster speeds, you will also get "complimentary" access to products like Netflix, Hulu+, ESPN, and HBO.

Recent WSJ article on this: http://online.wsj.com/news/articles/SB10...1949947414

ESPN is preparing for any eventuality.