RE: ACC Network worries?
Despite all of the hand wringing, ESPN is doing great. Revenues and profits for Disney's Cable Networks division are both up for the first six months of the year. Subscriber levels are down, but this more than is offset by increased fees paid by carriers.
The biggest threat to ESPN's profitability is the increased cost of rights fees. ESPN paid huge increases to the NFL and NBA, which ESPN arguably overpaid for. No other network, for instance, is paying anything close to what ESPN is paying for the NFL. These big payments will be squeezing ESPN's margins pretty hard, making it difficult to increase profitability moving forward. Combined with subscriber losses, is driving the cost cutting efforts. ESPN's strategy with the Big Ten, for instance, was a lot more conservative (not overbidding in the first round) than what it did for the NFL and NBA, but it still obtained the rights it needed.
Critically, the SEC Network has been an extreme bright spot for ESPN. It has added to the total number of channel subscribers for all networks combined and increased revenues from subscriptions, offsetting some of the lost subscribers for other networks. ESPN will do absolutely everything it can to duplicate the success with the ACC.
Live sports remains the one thing that cable can deliver well that cannot be replaced by over the top services like Netflix, Hulu, Amazon Prime and HBO Now unless ESPN itself decides to do so. Without exclusive live sports, cable has no advantage over these type of services. Despite all of their squawking, cable providers know this. Focused networks like the ACC Network, SEC Network, and regional sports networks, guaranty that fans of individual teams have to stay connected to have access to their teams' games. Further ESPN, TBS, TNT, and others now have important playoff and championship events that can't be viewed without cable. These help keep even casual fans committed.
Finally, while some number of folks, including myself, have gone over the top (thank you Sling TV!), most folks are going to keep sucking it up and forking over $100+ per month to the cable company for traditional cable.
(This post was last modified: 07-26-2016 03:01 PM by orangefan.)
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