(07-28-2015 02:49 PM)MplsBison Wrote:  

(07-28-2015 02:33 PM)arkstfan Wrote:  

(07-28-2015 02:12 PM)MplsBison Wrote:  

(07-28-2015 10:03 AM)arkstfan Wrote:  

(07-28-2015 09:55 AM)Nebraskafan Wrote:  A boxing match people pay for is something people will pay once for, but not every month besides hardcore boxing fans.

Just like causal basketball fans like me will not pay to watch college basketball, but I will find an online stream for free.

If people know of a way out of paying for something they know they can watch for free, they will take the free route. Hence why so many people share login information for HBO or whatever it is called since I don't watch those channels.

Let me go back to a favorite analogy.

You are an athletic director and you can sell 75,000 seats at $50 a pop or you can sell 55,000 seats at $75 a pop, which would you rather do?

Hint 55,000 at $75 produces more revenue and you should end up with lower security costs, lower parking management costs, and a smaller water bill from the toilets being flushed fewer times. You make less on sales of official beverage of the team but that's not big money and you offset part of that with fewer people employed to sell, clean up after the game takes less time.

ESPN is at around 94 million subscribers at roughly $6 per month. $564 million a month. At $40 a month $14.1 million subscribers gives you the same base revenue.

If 80% of ESPN subscribers balk at $40 a month, ESPN is laughing all the way to the bank.

A very crucial component is missing from your analysis. Revenue from advertisers.

I don't know how much of ESPN's total revenue comes from advertisers versus carriage fees. I'd like to know that information, if it's public. (or if someone just has a good guess)


But the point is, the more viewers your content captures, the more valuable it is as a vehicle for displaying advertisements to the audience.

Slashing your viewer base means you'll be slashing your revenue from advertisers.


I'm guessing that ESPN "only" charges carriage fees of $6/mo/customer because the rest of their costs get paid by the advertisers, who are eager to advertise on the channel and willing to pay big bucks for that ability.


And so if I'm right, that would mean there is some optimal trade-off between carriage fees and viewer base.

Advertising is 25% of ESPN's revenue and ESPN could lose roughly 80% of its subscribers without taking a significant advertising hit because most ESPN programming is viewed by less than 5% of their subscribers.

Depending on how they administer a subscription program their ad revenue could increase if they are collecting demographic data about subscribers, and could rise even more if they can match that data with their viewing habits.

Your argument is valid, but risky. And it potentially burns bridges with your advertising partners, if it doesn't work. Particularly if they just care about viewer base, and do not value "additional" viewer demographics.

So, I don't think management would sign off on such an extreme shift away from low fees/high subscribers to high fees/few subscribers.

Maybe incremental changes or meeting somewhere in the middle.

Major advertisers pay big bucks to get demographic data from Nielsen, if you are including access to that data in your ad price, it isn't going to hurt you.

The advertisers want to know how many people SEE the commercial and WHO those people are.

The mega ad risk to ESPN isn't that they lose viewers but the viewers they lose, namely viewers aged 18-25 who aren't going to or can't shell out for subscriptions.

If you watched ads during the NBA Finals and the Final Four, you see the difference. NBA finals more shoes, more energy drinks, more clothing, more entry level car ads. Final Four more appliance makers, you get Buick, higher end items all around. That's because while audiences are of similar size, they are different demographically. The Final Four audience is more similar to a PGA event older, whiter, richer.

(07-28-2015 03:41 PM)arkstfan Wrote:  

(07-28-2015 02:49 PM)MplsBison Wrote:  

(07-28-2015 02:33 PM)arkstfan Wrote:  

(07-28-2015 02:12 PM)MplsBison Wrote:  

(07-28-2015 10:03 AM)arkstfan Wrote:  Let me go back to a favorite analogy.

You are an athletic director and you can sell 75,000 seats at $50 a pop or you can sell 55,000 seats at $75 a pop, which would you rather do?

Hint 55,000 at $75 produces more revenue and you should end up with lower security costs, lower parking management costs, and a smaller water bill from the toilets being flushed fewer times. You make less on sales of official beverage of the team but that's not big money and you offset part of that with fewer people employed to sell, clean up after the game takes less time.

ESPN is at around 94 million subscribers at roughly $6 per month. $564 million a month. At $40 a month $14.1 million subscribers gives you the same base revenue.

If 80% of ESPN subscribers balk at $40 a month, ESPN is laughing all the way to the bank.

A very crucial component is missing from your analysis. Revenue from advertisers.

I don't know how much of ESPN's total revenue comes from advertisers versus carriage fees. I'd like to know that information, if it's public. (or if someone just has a good guess)


But the point is, the more viewers your content captures, the more valuable it is as a vehicle for displaying advertisements to the audience.

Slashing your viewer base means you'll be slashing your revenue from advertisers.


I'm guessing that ESPN "only" charges carriage fees of $6/mo/customer because the rest of their costs get paid by the advertisers, who are eager to advertise on the channel and willing to pay big bucks for that ability.


And so if I'm right, that would mean there is some optimal trade-off between carriage fees and viewer base.

Advertising is 25% of ESPN's revenue and ESPN could lose roughly 80% of its subscribers without taking a significant advertising hit because most ESPN programming is viewed by less than 5% of their subscribers.

Depending on how they administer a subscription program their ad revenue could increase if they are collecting demographic data about subscribers, and could rise even more if they can match that data with their viewing habits.

Your argument is valid, but risky. And it potentially burns bridges with your advertising partners, if it doesn't work. Particularly if they just care about viewer base, and do not value "additional" viewer demographics.

So, I don't think management would sign off on such an extreme shift away from low fees/high subscribers to high fees/few subscribers.

Maybe incremental changes or meeting somewhere in the middle.

Major advertisers pay big bucks to get demographic data from Nielsen, if you are including access to that data in your ad price, it isn't going to hurt you.

The advertisers want to know how many people SEE the commercial and WHO those people are.

The mega ad risk to ESPN isn't that they lose viewers but the viewers they lose, namely viewers aged 18-25 who aren't going to or can't shell out for subscriptions.

If you watched ads during the NBA Finals and the Final Four, you see the difference. NBA finals more shoes, more energy drinks, more clothing, more entry level car ads. Final Four more appliance makers, you get Buick, higher end items all around. That's because while audiences are of similar size, they are different demographically. The Final Four audience is more similar to a PGA event older, whiter, richer.

So it sounds like you agree that in broad terms, losing viewers is a risk and the more viewers you lose the more of a risk you take on.

(07-28-2015 02:28 PM)MplsBison Wrote:  I could be completely wrong on this, but I think this might be correct:

- with TV systems, (note: TV nowadays is a stream of data, just like streaming over the internet) there are only a few streams from the data source that eventually make their way to all customers (with some delay)

- with internet streaming, each customer gets a separate, parallel stream directly to/from the data source

But with something like SlingTV, they are just an ongoing live stream of the channel, so it would be straightforward to feed all of the people watching one SlingTV channel with a single stream from SlingTV to the local switch, just like cable TV.

The difference between SlingTV online and Netflix is that even if two Netflix streams started together, one viewer could hit pause, and then they'd be out of sync again. With SlingTV, you just get the current stream.

Its WatchESPN that gives that "watch any time" function, but its the live games where you are likely to get a big burst of internet traffic, and there if the internet provider was set up for pooling the SlingTV feed, you would really only need one internet stream per channel to each internet provider, and they would split it up to whichever customers are viewing that channel.

I'd guess that its the pause / playback / play from start functions that an "ESPN only" channel would add to justify charging the $40 ... but since only a relatively small portion of the population would pay for those extra functions, it wouldn't have a major impact on internet congestion.

Bruce you have it backward. WatchESPn is purely a live feed, with no pause and no rewind. It's ESPN3, which also shows live games, that carries the catalog games you can replay at anytime.

(07-28-2015 05:59 PM)adcorbett Wrote:  Bruce you have it backward. WatchESPn is purely a live feed, with no pause and no rewind. It's ESPN3, which also shows live games, that carries the catalog games you can replay at anytime.

Well, there you go ... I never got the family cable logon to make the WatchESPN app on my Nook show anything, and WatchESPN is largely redundant when you have the SlingTV app loaded. I guess I can uninstall WatchESPN and save the storage space to make room for an ESPN3 app.

I thought ESPN3 was a channel of WatchESPN, since its there on the app, but the WatchESPN site says:

Quote: WatchESPN delivers live access to ESPN, ESPN2, ESPNU, ESPN3, SEC Network, SEC Network +, ESPNews, ESPN Deportes, Longhorn Network, ESPN Goal Line and ESPN Buzzer Beater on computers, smartphones, tablets and TV connected devices.

... but that means the live feed of ESPN3, not the catalog games.

In any event, ESPN3 is bundled with the SlingTV basic bundle for $20, so access to the catalog games is not an "added extra" to allow an "even less bundled" ESPN to charge more for less content.

Its pause / play / start from the beginning with the live games ... that is where you start to offer what is not available from a "cable-package-over-the-internet" service like SlingTV. And its offering something that the other option does not allow that opens up the possibility of charging more for fewer channels.