(05-15-2022 02:10 PM)quo vadis Wrote:  

(05-15-2022 02:04 PM)Wedge Wrote:  

(05-15-2022 12:53 PM)solohawks Wrote:  

(05-15-2022 12:16 PM)quo vadis Wrote:  

(05-13-2022 06:44 PM)Attackcoog Wrote:  That and there is an escalator in carriage agreements that automatically bumps the price up each year. So, crazy as it sounds, thus far, because the automatic escalator percentage is higher than the annual subscriber loss percentage, carriage fee income continues to rise for ESPN---and thats before you count ESPN+. That said, the reality is that model is not going to be sustainable for much longer. Eventually, as fewer and fewer are paying higher and higher prices----the numbers are going to get out of control and subscriber support from that model will suddenly collapse.

Disney reported the other day that its cable TV had net revenue of $2.8B while its streaming services lost $880M.

Cable is largely ESPN and its family. Streaming includes Disney+ and Hulu, so ESPN+ isn't responsible for all of that loss, but from what I've read it is losing quite a bit of money right now.

And I understand why - as a subscriber, I think it is an amazing deal. The amount of stuff you get for your $7 a month is off the chain. Can't go on forever, I reckon.

So IMO yes, there are problems with the cable model, but also with the streaming model.

Seven years after streaming became kind of a real thing, cable still makes a lot more money.

I wonder if startup costs are still being considered for Disney+

They are. At a shareholder meeting when they launched the Disney streaming service, Disney's CEO said they had budgeted for several years of billion dollar losses on streaming in order to catch up to where Netflix was. Netflix itself was in the red for many years. Can't start from nothing and ramp up a giant business that quickly without losing tons of money for a few years or several years.

So Disney is using profits from its very profitable but slowly dying cable operations to finance what they hope will eventually be their next profitable line of business.

I wonder ... what are the "startup costs" for a streaming service? It's just, well, streaming.

Old content, like say the Avengers movies, are already paid for. New content, like a brand new Star Wars series for Disney+, has to be paid for, but that's an ongoing, operational cost.

So I am curious about the economics of these various services.

It's not just about the programming. You need to have the bandwidth and servers at a scale to handle millions of simultaneous viewers and to pay the folks to build said system, both from a software and hardware standpoint.