If the cable companies were forced to unbundle, does than mean individual companies would have to? So, like, would there be a "Disney/ABC block" where you'd pay say somewhere between 9.99 and 19.99 to get all the ABC/Dinsey/ESPN channels?

Wow, bob, you typed that while I was asking it.... lol

(09-13-2013 09:59 AM)MU88 Wrote:  

(09-13-2013 09:13 AM)Frank the Tank Wrote:  This means that Disney can charge subscriber rates for its lesser-watched channels at levels that are higher than what they would be in an unbundled free market because having access to ESPN is so important.

Well, ESPN is no. 1 in prime time during the fall, true. But, Disney is a ratings powerhouse, drawing many more people during the day and holding its own at night. For example, Tangled outdrew both the Florida-Miami game and the Florida State-Pitt game last week. The Princess and the Frog, a box office flop, also finished in the top 10. In fact, a second airing of Tangled finished right behind the FSU-Pitt game.

When it was in its heyday, SpongeBob would hold as many as 8 of the top 10 spots.

Look, I can see what you are saying. There are lots of networks I don't really care about, including TNT and TBS, which have high ratings. Bundling is a pain. However, as a sports fan, if you ask me what network is more important in my house, ESPN or Disney, its Disney, by far. But for a few must see games a year, I put ESPN on just because there is a game and its habit. I could just as easily put on FOX or NBC Sports.

Oh, as the father of 4-year old twins, Disney and Disney Junior are critical channels in our household, as well. No doubt about it. The top level Disney-owned channels are all pretty valuable networks. However, Disney is tying those channels to its other lesser-watched entertainment networks in the same way ESPN is tied to its other lesser-watched sports networks (ESPNNEWS being the primary example).

To be clear - I have NO issue with buying a basic cable package. I don't think a la carte from a *consumer* perspective is a good idea at all and is shortsighted by way too many people. What I do think is fair is that a cable *carrier* should be able to make a business decision on every individual channel instead of being in a position where it either has to buy every single Disney channel or none of them at all (with no option in between). If that were to happen, you'd see a lot fewer carriage disputes and a lot less complaining from the DISH Networks of the world.

(09-13-2013 09:47 AM)Frank the Tank Wrote:  

(09-13-2013 09:36 AM)bigblueblindness Wrote:  Are you guys forgetting that the market sets the prices? If a la carte is available and the costs per customer are so high that no one is buying it, those channels will do one of two things: They will either negotiate lower contracts for live games, thus lowering the price, or they decide a $100 ESPN package is suitable and it cuts out a large portion of the population from viewing it at home. Guess what? Someone will make a killing by hosting viewing parties, just like every sports bar does in America on Saturday nights for PPV fights. Some sports would become niche, and we would move on to some other form of entertainment. ESPN/NFL/NBA/College Football will simply have to decide what they want to become.

What I'm saying is that there's a balance. Pure a la carte kills off so many channels that it destroys the entire attraction of a la carte in the first place. People aren't going to be able to choose among the 200-plus channels that are out there now. Instead, people will be choosing among only 10 or so surviving channels that have a lot more pricing power. You'd essentially have the equivalent of the department store industry for TV - there's Wal-Mart and Target that are strong and then everyone else is wheezing along. This isn't what consumers really want from a la carte. What they're *hoping* for (that they can pick and choose among 200 options) would never be able to happen, which is something that these politicians either aren't understanding or are ignoring.

The real subversion of the free market is the tying arrangements that cable networks have. Repeat: ESPN alone isn't what's expensive - $5 per subscriber per month is an accurate reflection of its true market value. The problem is the 20 other channels that a cable carrier has to buy just to get ESPN and having to pay above market value for those extraneous networks. That's the main reason why your cable bill is so high. Disney leverages ESPN to sell 20 other channels, Viacom leverages Comedy Central and MTV to sell 20 other channels, Comcast leverages USA to sell 20 other channels, Fox leverages Fox News and FX to sell 20 other channels, etc.

I'm not so sure it'll kill that large of a swath of channels. The population size of this country is big enough that so many people have different interests that will support a certain channel.
If the case is you can't separate Disney from ESPN then perhaps having the threat of a bill will at least move the content carriers to give in so that the cable/satellite carriers can package them separately. If they don't then well, then let this bill go through and they'll be forced to.

(09-13-2013 09:37 AM)MWC Tex Wrote:  

(09-13-2013 09:29 AM)Frank the Tank Wrote:  

(09-13-2013 09:22 AM)NIU007 Wrote:  So let's say ESPN/ESPN2 can be chosen a la carte. It would then cost $60+ a month just for those 2 channels?

That could easily be the case. The Mayweather-Canelo fight tomorrow costs around $70 for a 2 hour program on pay-per-view and that's for a niche sport like boxing. A single run-of-the-mill Monday Night Football game is worth much more than even the most high profile fights from a TV perspective. ESPN and ESPN2 carry dozens of events that draw more national sports interest than the Mayweather-Canelo fight every month.

However, unless ESPN isn't going to have commercials, then it'll be nowhere at that rate. Pay-per-views are high because there is no revenue from commercials.

Why wouldn't it be near that rate? ESPN isn't just a little bit important to Disney - that channel alone provides over HALF of the entire Disney Corporation's profit! Remember that this is a company that brings in money from the ABC network, Disney theme parks, the Marvel movies, Star Wars, licensing everything from Mickey Mouse to princesses, the Disney Channel and related shows, the Pirates of the Caribbean franchise, the Muppets, etc. Iron Man 3 and The Avengers were the two biggest movies of the past 2 years and they were a drop in the bucket towards Disney's bottom line compared to ESPN.

ESPN generates more profit than EVERYTHING ELSE THAT DISNEY OWNS COMBINED! Take a step back and think about how gargantuan that is with how ubiquitous Disney products and brands are in our lives. ESPN isn't just the most powerful sports network - it is straight up the most powerful and profitable company in the entire media and entertainment industry on the planet right now. Period. That's how critical ESPN's revenues are to Disney and why they're fighting every single a la carte proposal. Whatever price point ESPN has MUST generate at a bare minimum $500 million per month in subscriber fees ALONE before a single ad is sold. That is to merely match what ESPN has today, and the reality is that the subscriber fees must be even higher than $500 million per month since they'll have to charge lower ad rates for having a smaller audience. So yeah, ESPN is going to be more expensive than what most people here are thinking. Disney (and all other corporations) aren't exactly keen on reducing revenue.

(09-13-2013 12:26 PM)Frank the Tank Wrote:  

(09-13-2013 09:37 AM)MWC Tex Wrote:  

(09-13-2013 09:29 AM)Frank the Tank Wrote:  

(09-13-2013 09:22 AM)NIU007 Wrote:  So let's say ESPN/ESPN2 can be chosen a la carte. It would then cost $60+ a month just for those 2 channels?

That could easily be the case. The Mayweather-Canelo fight tomorrow costs around $70 for a 2 hour program on pay-per-view and that's for a niche sport like boxing. A single run-of-the-mill Monday Night Football game is worth much more than even the most high profile fights from a TV perspective. ESPN and ESPN2 carry dozens of events that draw more national sports interest than the Mayweather-Canelo fight every month.

However, unless ESPN isn't going to have commercials, then it'll be nowhere at that rate. Pay-per-views are high because there is no revenue from commercials.

Why wouldn't it be near that rate? ESPN isn't just a little bit important to Disney - that channel alone provides over HALF of the entire Disney Corporation's profit! Remember that this is a company that brings in money from the ABC network, Disney theme parks, the Marvel movies, Star Wars, licensing everything from Mickey Mouse to princesses, the Disney Channel and related shows, the Pirates of the Caribbean franchise, the Muppets, etc. Iron Man 3 and The Avengers were the two biggest movies of the past 2 years and they were a drop in the bucket towards Disney's bottom line compared to ESPN.

ESPN generates more profit than EVERYTHING ELSE THAT DISNEY OWNS COMBINED! Take a step back and think about how gargantuan that is with how ubiquitous Disney products and brands are in our lives. ESPN isn't just the most powerful sports network - it is straight up the most powerful and profitable company in the entire media and entertainment industry on the planet right now. Period. That's how critical ESPN's revenues are to Disney and why they're fighting every single a la carte proposal. Whatever price point ESPN has MUST generate at a bare minimum $500 million per month in subscriber fees ALONE before a single ad is sold. That is to merely match what ESPN has today, and the reality is that the subscriber fees must be even higher than $500 million per month since they'll have to charge lower ad rates for having a smaller audience. So yeah, ESPN is going to be more expensive than what most people here are thinking. Disney (and all other corporations) aren't exactly keen on reducing revenue.

If it were just ESPN, we could all suck it up and pay the $15-25 per month that they're going to need. However, it's not just ESPN. Most sports fans are going to want a sports bundle that gives them their local RSNs, the entire slate of ESPN Networks, the NFL Network, and likely FS1 and TNT/TBS to get all MLB and NBA playoff games. Probably looking at $50/month for 10+ channels.

(09-13-2013 06:23 AM)CommuterBob Wrote:  Simply put, A la carte cable means that you'll end up paying more for the channels you want. For every cable subscriber who watches ESPN, there are three who do not. So for ESPN to remain revenue neutral in an a la carte world, ESPN subscribers would have to pay four times as much. The ratio is even worse for some other channels. All of that adds up, and likely your cable bill would be higher that it is with bundling.

It's probably higher than that. Consider that HBO is an example of a la carte pricing. It costs about $15 per month, give or take. Consider that the Disney Channel used to be a la carte, and charge the same as HBO. So they'd likely need to go back to charging $15.00 per month to be revenue neutral. That's an increase to 1500% of the original bill.

ESPN, likely goes up to $30 per month. IF not more. So currently you can buy basic cable for $30 - $40 a month, and get 70-80 channels including ESPN, ESPN2, and the Disney Channel. OR you can pay $45.00 per month to just get ESPN and Disney. Who is winning in this? People have this wild idea that the wholesale rates for channels remotely resembles the retail rates. They don't.

The also assume Disney will not bundle their channels together, making you buy all or none, much like they do with cable companies who have much more leverage. But whatever, people can think a la carte will help them.

And not attacking you Bob, just the idea.

(09-13-2013 01:06 PM)adcorbett Wrote:  

(09-13-2013 06:23 AM)CommuterBob Wrote:  Simply put, A la carte cable means that you'll end up paying more for the channels you want. For every cable subscriber who watches ESPN, there are three who do not. So for ESPN to remain revenue neutral in an a la carte world, ESPN subscribers would have to pay four times as much. The ratio is even worse for some other channels. All of that adds up, and likely your cable bill would be higher that it is with bundling.

It's probably higher than that. Consider that HBO is an example of a la carte pricing. It costs about $15 per month, give or take. Consider that the Disney Channel used to be a la carte, and charge the same as HBO. So they'd likely need to go back to charging $15.00 per month to be revenue neutral. That's an increase to 1500% of the original bill.

ESPN, likely goes up to $30 per month. IF not more. So currently you can buy basic cable for $30 - $40 a month, and get 70-80 channels including ESPN, ESPN2, and the Disney Channel. OR you can pay $45.00 per month to just get ESPN and Disney. Who is winning in this? People have this wild idea that the wholesale rates for channels remotely resembles the retail rates. They don't.

The also assume Disney will not bundle their channels together, making you buy all or none, much like they do with cable companies who have much more leverage. But whatever, people can think a la carte will help them.

And not attacking you Bob, just the idea.

I only see you agreeing with me and expounding on what I said, not attacking me. Not sure how you think I would even see it that way.

(09-13-2013 01:06 PM)adcorbett Wrote:  

(09-13-2013 06:23 AM)CommuterBob Wrote:  Simply put, A la carte cable means that you'll end up paying more for the channels you want. For every cable subscriber who watches ESPN, there are three who do not. So for ESPN to remain revenue neutral in an a la carte world, ESPN subscribers would have to pay four times as much. The ratio is even worse for some other channels. All of that adds up, and likely your cable bill would be higher that it is with bundling.

It's probably higher than that. Consider that HBO is an example of a la carte pricing. It costs about $15 per month, give or take. Consider that the Disney Channel used to be a la carte, and charge the same as HBO. So they'd likely need to go back to charging $15.00 per month to be revenue neutral. That's an increase to 1500% of the original bill.

ESPN, likely goes up to $30 per month. IF not more. So currently you can buy basic cable for $30 - $40 a month, and get 70-80 channels including ESPN, ESPN2, and the Disney Channel. OR you can pay $45.00 per month to just get ESPN and Disney. Who is winning in this? People have this wild idea that the wholesale rates for channels remotely resembles the retail rates. They don't.

The also assume Disney will not bundle their channels together, making you buy all or none, much like they do with cable companies who have much more leverage. But whatever, people can think a la carte will help them.

And not attacking you Bob, just the idea.

Well, then they'll (ESPN) need to adjust their price so they can get a many as customers they want...regarding the casual fan. The hard-core sports fan will no doubt be hit for wanting ESPN, but since only 15% of the TV households tune for the BCS game last year, there is the other 85% of the TV households who don't care and don't want to pay for ESPN. That is even more pressure from the consumer for the change to pick and choose what they want.

I know the CBS CEO said they don't care how you watch them (internet, OTA or cable/satellite), but still even if the all the consumers switched to total internet, the customers are only going to view the channels or shows they want which is just like the pure a la carte.

We don't really know what the price will be for each channel until it happens. However, the content provider will either have to up the price and have a lot of customers drop them or market the price so that they can keep or increase the volume of customers. Because other side of the equation is still this, how many commercials does HBO show? Zero, so they charge $15/month to cover their expense and licensing fees.
Subscriber fees are only part of the revenue equation. I don't think a channel is going to charge a price that a lot of people will not pay, because when it come to the biggest cash cow of TV ads, they will not be able to charge a higher price if nobody subscribes to them.

(09-13-2013 01:06 PM)adcorbett Wrote:  

(09-13-2013 06:23 AM)CommuterBob Wrote:  Simply put, A la carte cable means that you'll end up paying more for the channels you want. For every cable subscriber who watches ESPN, there are three who do not. So for ESPN to remain revenue neutral in an a la carte world, ESPN subscribers would have to pay four times as much. The ratio is even worse for some other channels. All of that adds up, and likely your cable bill would be higher that it is with bundling.

It's probably higher than that. Consider that HBO is an example of a la carte pricing. It costs about $15 per month, give or take. Consider that the Disney Channel used to be a la carte, and charge the same as HBO. So they'd likely need to go back to charging $15.00 per month to be revenue neutral. That's an increase to 1500% of the original bill.

ESPN, likely goes up to $30 per month. IF not more. So currently you can buy basic cable for $30 - $40 a month, and get 70-80 channels including ESPN, ESPN2, and the Disney Channel. OR you can pay $45.00 per month to just get ESPN and Disney. Who is winning in this? People have this wild idea that the wholesale rates for channels remotely resembles the retail rates. They don't.

The also assume Disney will not bundle their channels together, making you buy all or none, much like they do with cable companies who have much more leverage. But whatever, people can think a la carte will help them.

And not attacking you Bob, just the idea.

You're arguing something that is different from what McCain is proposing, I think.

You're talking about a situation where purchasing TV channels a la carte is the only option.

McCain is proposing that carriers be required to offer a la carte, not that they be prohibited from offering bundles. That situation, if enacted, would be like eating breakfast at a restaurant that offers a breakfast buffet -- you can pay the price to get the buffet, or you can order a la carte off the menu.

(09-13-2013 10:21 AM)MWC Tex Wrote:  I'm not so sure it'll kill that large of a swath of channels. The population size of this country is big enough that so many people have different interests that will support a certain channel.
If the case is you can't separate Disney from ESPN then perhaps having the threat of a bill will at least move the content carriers to give in so that the cable/satellite carriers can package them separately. If they don't then well, then let this bill go through and they'll be forced to.

You are still looking at the wholesale price. In an a la carte environment, many of those channels would go up in price to the point that only the die hard fans will buy it. Note a $0.15 a month channel would turn into a $1.00 - $1.50 per month channel.

(09-13-2013 01:40 PM)MWC Tex Wrote:  Well, then they'll (ESPN) need to adjust their price so they can get a many as customers they want...regarding the casual fan. The hard-core sports fan will no doubt be hit for wanting ESPN, but since only 15% of the TV households tune for the BCS game last year, there is the other 85% of the TV households who don't care and don't want to pay for ESPN. That is even more pressure from the consumer for the change to pick and choose what they want.

I know the CBS CEO said they don't care how you watch them (internet, OTA or cable/satellite), but still even if the all the consumers switched to total internet, the customers are only going to view the channels or shows they want which is just like the pure a la carte.

We don't really know what the price will be for each channel until it happens. However, the content provider will either have to up the price and have a lot of customers drop them or market the price so that they can keep or increase the volume of customers. The other side of the equation is still this, how many commercials does HBO show? Zero, so they charge $15/month to cover their expense and licensing fees.
Subscriber fees are only part of the revenue equation. I don't think a channel is going to charge a price that a lot of people will not pay, because when it come to the biggest cash cow of TV ads, they will not be able to charge a higher price if nobody subscribes to them.

A couple of observations. First, it's not just about one game. ESPN has control of a lot of key content -- NCAAFB, NCAABB, MLB, NBA, and most importantly, NFL. HBO has around 30 million subscribers. That's probably a good guess for ESPN a la carte.

Second, ads don't interfere with watching sports. Ads will stay. Even if ESPN lost 2/3's of its subscribers, it might only lose 1/4 of its viewers. In addition, its demographics are incredible, delivering the impossible 18-49M demographic better than any other network and all of its programming is watched live, so it can command top $ for ad rates. Indeed, under the current model, ESPN provides 2 minutes per hour to the cable systems. These 2 minutes really take the edge off the $5 subscription fee. The net cost to cable systems is therefore something less.

(09-13-2013 01:44 PM)adcorbett Wrote:  

(09-13-2013 10:21 AM)MWC Tex Wrote:  I'm not so sure it'll kill that large of a swath of channels. The population size of this country is big enough that so many people have different interests that will support a certain channel.
If the case is you can't separate Disney from ESPN then perhaps having the threat of a bill will at least move the content carriers to give in so that the cable/satellite carriers can package them separately. If they don't then well, then let this bill go through and they'll be forced to.

You are still looking at the wholesale price. In an a la carte environment, many of those channels would go up in price to the point that only the die hard fans will buy it. Not $0.15 a channel: $1.00 - $1.50 per channel.

$1.50 per channel is nothing.

I would like to see a menu like that have at McDonalds. I could order a combo meal if I want, but if all I want is a Big Mac, I can order just the Big Mac. Let me decide if the combo meal is worth to me or not.

In my case, I never drink soda, I will just order the big mac and fries even though the combo meal only costs $0.30 more. its not worth the extra $0.30 to me.

Same with Cable. All I want is HBO. Nothing else on cable tv is worth it to me. Why should I order basic cable if all I want is HBO?

A la carte will also have a negative impact on college sports, particularly on exposure.

I could easily see ESPN2 dropping from 100 million households to 20 million households. Of that other 80 million, I'd bet 60 million of them watched at least 5 college football games a year on ESPN2, and it may have been their only exposure to any school that's not in a BCS Bowl. Remember, the primary reason that schools sponsor football in the first place is to build a brand for their university. So reaching those 60 million casual fans via ESPN2 is actually more critical to the university than reaching the 20 million die-hards who know everything about CFB anyways.

(09-13-2013 02:54 PM)Captain Bearcat Wrote:  A la carte will also have a negative impact on college sports, particularly on exposure.

I could easily see ESPN2 dropping from 100 million households to 20 million households. Of that other 80 million, I'd bet 60 million of them watched at least 5 college football games a year on ESPN2, and it may have been their only exposure to any school that's not in a BCS Bowl. Remember, the primary reason that schools sponsor football in the first place is to build a brand for their university. So reaching those 60 million casual fans via ESPN2 is actually more critical to the university than reaching the 20 million die-hards who know everything about CFB anyways.

Depends on how much they charge for ESPN and ESPN2. Right now I have neither because the whole cable package costs too much. If it was even a little cheaper, I'd consider it.

(09-13-2013 02:54 PM)Captain Bearcat Wrote:  I could easily see ESPN2 dropping from 100 million households to 20 million households. Of that other 80 million, I'd bet 60 million of them watched at least 5 college football games a year on ESPN2, and it may have been their only exposure to any school that's not in a BCS Bowl.

No way did 60 million different households watch even one game on ESPN2. Look at the ratings. (See link below for 2012 CFB ratings.) And no doubt there is huge overlap between, for example, an SEC game on ESPN2 one week and an SEC game on ESPN2 the next week, so you can't add the 1 million households for each game and claim that there were 2 million different households.

http://www.sportsmediawatch.com/2012/12/...son/#chart