
ESPN Has Seen the Future of TV - virtualwhys
https://www.bloomberg.com/news/features/2017-03-30/espn-has-seen-the-future-of-tv-and-they-re-not-really-into-it
======
fredleblanc
This article has an interesting point buried deep down in the middle of it
(that really isn't the point of the article), in that all of the new-ish
things, like Sling or Vue or YouTube TV or otherwise look suspiciously like
cable packages on the Internet. And that's something I can't quite get over.

I've used Sling in the past, it can be a good bridge if you've cut the cable
and want to hop back in because you miss it, but besides the delivery
mechanism — I can bring my own device and it streams over the Internet — I
don't see that much of a differentiator from cable. With either package of
Sling, I'm still getting a bunch of channels I have no interest in, and while
the price may be less per month than cable, it still _feels_ like 70% of the
money I'm paying is going towards channels I have absolutely no interest in.
Not to mention all the commercials I have to watch with it, not just in live
viewings (because that's part of the stream, I get that), but even in on-
demand things.

I ask this honestly: is there something I'm missing here? People that I know
that haven't cut cable because they would miss this or that laud these
products as "the thing that may finally get them to cut cable," but this feels
like cable just over streaming.

~~~
pkulak
> 70% of the money I'm paying is going towards channels I have absolutely no
> interest in

Why does that bother people so much? The incremental cost of delivering you a
new channel is zero, so it makes sense to just deliver all of them. Where is
the wasted money that's implied by a statement like this? If the average
person watches 3 channels, and provider has a choice: charge $30 per channel
and let everyone pick only the ones they want, or just charge $90 and let
everyone watch whatever they want. I'd rather not be forced to choose the few
channels that I'm locked into.

~~~
fullshark
It bothers people because cable packages are so expensive. If they were
cheaper no one would complain.

~~~
mason55
Sure but there's no incentive for anyone to make them cheaper. The cable
operators make more by creating more expensive packages and then can justify
it by putting a bunch of channels in them. The networks make more by forcing
the operators to take small/niche channels if they want the popular channels.
And since cable networks are not perfect substitutes, you can't just disrupt
the industry by carrying a bunch of channels no one cares about. Also, because
the channels have a fair bit of power in the relationship, they can structure
their contracts with the operators in way that it's not economically viable
for the operators to unbundle.

~~~
bdavisx
>The cable operators make more by creating more expensive packages and then
can justify it by putting a bunch of channels in them.

But they won't make more money if they keep driving more people off.

~~~
mason55
Where are you going to go? All the OTT providers are similar, it's just fewer
channels for less money. No one has an incentive to sell you individual
channels and the channels don't have an incentive to sign contract with
someone who would sell you individual channels (because they can just do that
themselves for $10/mo). Remember that a cable operator can't just decide to
start carrying a channel, they have to sign a contract, so a channel can
ensure that they can always under cut someone who's selling unbundled channels
and still make a healthy profit.

If you're interested in more than a couple channels then it's going to be
cheaper to get a package through someone like Playstation VUE or Sling. You're
paying anywhere from $20-$75 for one of those services and once you put it on
top of your monthly internet how much are you really even saving vs. a Double
Play from a cable provider?

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meri_dian
I may be in the minority here, but one aspect of TV that I'd miss if did end
up 'cutting the cable' would be the communal sense I get from watching TV.
It's a bit hard to articulate, but when I watch TV I know that other people
are watching exactly what I'm watching on that channel at that time. It's sort
of like the feeling you get when you look at the Sun or Moon and know that
people hundreds or thousands of miles from you are looking at the exact same
thing. Or perhaps a more appropriate analogy would be watching a movie in a
theater. Being there in the theater with other people is part of the
experience and adds to it.

Netflix and streaming services don't really offer this because while other
people may have watched what you're currently watching, your viewing
experiences aren't synced up. You can watch whatever you want when you want
and so the chances that you're watching the same thing at the same time,
synced with others, is very small. Though freedom of choice is the major
strength of streaming services and I love them for it, you lose that vague
connection of sharing a singlular experience - watching that show, at that
time - with thousands of others.

Maybe if Netflix were to implement a feature that indicated how many people
were watching a show or movie at any given time it'd restore the communal
aspect.

~~~
imglorp
This is a good point. I could almost imagine a live social site where you
could "watch X with friends" like a meetup and chat on a side channel. Of
course you could do this wholly out of band but NF could certainly be
involved.

~~~
fenwick67
I have seen this with... erm... less-than-legal streaming setups, it would be
great of somebody figured out how to do it legitimately.

With Youtube it would actually be pretty simple because you can embed an
iFrame for the video and manipulate the timestamp, but with other streaming
sites I imagine it would be harder.

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drewg123
It sounds like they are still intent on riding cable into the ground, as they
are "planning to roll out a Netflix-like interface for a section of the ESPN
app that’s limited to cable customers." Seriously? Wouldn't it make sense to
just offer an OTT service at a pricepoint slightly higher than what cable
providers give them per sub? If they cannot get enough subscribers at that
pricepoint, then why not offer pricing per event?

I'm a cord cutter. I follow a single NFL team. They are on MNF maybe once a
year. I'd pay $25 or so to watch that game (legally) at home rather than go to
a bar or deal with a flaky illegal stream. They're leaving my money on the
table.

~~~
eduren
They most likely have a contractual obligation with cable companies to only
serve their content to subscribers. Probably a catch 22 of "We can't afford to
renegotiate with cable companies right now, but we can't innovate on our
current model without marketing to cord cutters".

ESPN (and many other media companies) are stuck and most likely in revenue-
maintenance mode.

~~~
coldcode
This exactly. ESPN was forced to sign such exclusive contracts in order to get
the content. They are not permitted to sell the content any other way (like to
individuals). It's a terrible contract they cannot get out of. If Disney
pushed ESPN out on its own, that entity might be might be able to renegotiate.
Of course the NFL for example could always sell the content to some other
sucker then. Sports content is a nasty business.

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mark_l_watson
My wife and I just cut the cable, and it feels great. Even adding HBO Now and
Turner/Criterion to Netflix and Hulu Prime, we save a ton of money, and no
commercials.

Not being subjected to network news like MSNBC, Fox, and CNN is another fine
bonus.

Paying for ESPN on cable, and never watching it was a nudge to cut the cable.

~~~
M_Grey
It's been about a year for me, and it's blissful. I tried to watch some
Channel 4 UK on demand, and even that small amount of advertising had my teeth
on edge. It's amazing how quickly you stop calmly glazing over for the high
octane mindlessness you find in advertising; the tolerance just vanishes. The
music grates, the acting is more obviously terrible, and messages more
obviously manipulative... when you're not constantly immersed in them.

I also find that I watch less, because I'm actively finding anything I want to
watch, rather than passively channel surfing or just "seeing what's on".

~~~
johneth
It'd be great if Channel 4 let you pay a subscription to go ad-free. I think
ITV does, but I have no interest in their programming (unlike Channel 4, which
would be worth it in my opinion).

~~~
M_Grey
I agree completely, and anecdotally it's the ad-free option that finally got
me on Hulu.

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woliveirajr
Few weeks ago a very fantastic thing happened in my city, about live sports
and so on.

Context: soccer is the main sport, TVs buy the rights to transmit, and pays a
big money for the whole season. But the two biggest teams didn't sold their
rights, so TV can transmit the whole championship except for those two teams.

When the confront of those two teams was about to happen, commercial
controversy arose: the teams didn't accept a one-time-contract to that match
because they estimated to receive 3x more from youtube live stream. The league
had a say, the tv, the teams... bureaucratic problems prevented the have from
happening at the expected day, but it happened a week later.

Live at youtube, enough quality, free, ad sponsored.

League wasn't happy (the championship worths a lot less without those teams,
so smaller teams received a smaller share this year). Tv was more or less, as
it profits selling pay-per-view or live transmission.

Public was happy. Those who wanted to go to the stadium, went and were happy
too. Teams got bigger money and were happier than never.

\---------

I cutted cable because I was paying >$100 to watch just 4 or 5 channels. Would
they have some kind of subscription, I would surely go for them.

I'm still waiting when cables (or channels companies) will allow me to
subscribe for just specific channels.

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patwolf
The article makes a point that if ESPN charged $15 a month for a standalone
streaming channel, they'd need 43 million subscriptions to make up for revenue
it gets from cable packages.

In the same paragraph it mentions that ESPN pays more than $100 million for
the rights to a single Monday Night Football game. What I don't see mentioned
is that the price of content should be a function of how many people watch
that broadcast. And disregarding the fact that some of these prices are locked
in from long-term contracts, if ESPN loses subscribers, fewer people will
watch the content and the price broadcasters will bid in the future for that
content will go down.

Cord cutters aren't all switching to OTA antennas either, so the usual
broadcast networks should be bidding less on the content as well. It seems
like an equilibrium will eventually be reached letting ESPN survive with fewer
subscribers, which makes the $15 a month standalone streaming channel more
feasible. The real loser in all this would be the sports leagues that can no
longer command the same price for broadcast rights.

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kin
I've cut the cord and subscribe to ESPN through Sling. I'm very happy that
ESPN has readily made themselves available on all the different streaming
services (PS Vue, Youtube TV, Sling, etc). However, I also pay for Hulu and
Netflix. In the end it still comes out to be the same price as cable, but with
a more friendly subscription model.

Time Warner tried giving me a free year of basic cable and each month all of
the random fees and surcharges were placed on me. Bills weren't predictable.
All of a sudden the price would change 1 month and they have every right to do
so. So yeah, I'm never trying that experiment again.

In the end, as long as ESPN has games to broadcast, they will no doubt have
viewers and subscribers. Aside from that? People unsubscribe to ESPN either
because they never wanted it to begin with OR because they honestly lack
programming. Football has Sunday Ticket and Basketball has NBA GameTime.

Outside of live sports, IMO Scott Van Pelt is the last great sports
commentator on ESPN and everyone else on the show (Stephen A Smith, Skip
Bayless) and other people I don't care to remember the name of, sucks. The
commentating and the topics they discuss are now more reality TV than it is
about sports. Why did Kaepernick kneeling get so much airtime? Are they same
demographic of people who watch sports on ESPN the same who would care? I felt
like any coverage of that should have been on Bravo or E.

Also Bill Walton's coverage of NCAA Basketball seriously makes me want to shut
the damn game off.

------
gregmac
The root of ESPN's problem seems to be that what they call 'ESPN subscribers'
are actually just 'cable subscribers', because ESPN is bundled with so many
cable subscriptions. The actual number of people that _want_ ESPN is some
subset of all cable subscribers.

Since the only way to get ESPN right now is to be a cable subscriber, it means
two things: everyone that still wants ESPN still has ESPN (because they still
have cable), and all of the people unsubscribing no longer want ESPN. Note: To
keep this away from pricing issues, I am excluding "cannot afford or do not
want to pay the price of cable but still want ESPN" from people that truly
"want ESPN".

The true number of ESPN subscribers as a percentage of cable subscribers is
likely going up. The cable companies probably know what this number is
(feedback from set top boxes), but as far as I know don't share this data.

I would assume their cost to get rights to events seems would be somewhat
based on their published subscriber numbers. Since those are the wrong
numbers, they are getting hit in two ways: the subsidy from non-ESPN viewers
that no longer subscribe to cable is going away, and the cost-per-subscriber
of broadcast rights is going up because number of subscribers (according to
their broken metric) is going down.

Had they just always charged for ESPN separately (meaning 100% of people who
paid for ESPN wanted to pay for ESPN) it seems like neither of these things
would be a problem, though, they'd have lower revenue. The market will correct
itself eventually, and ESPN will either adapt by cutting their costs or
they'll eventually go bankrupt.

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brightball
ESPN is honestly the single biggest selling point FOR cable. If not for ESPN
I'd have cut the cord long ago. Live broadcasts to millions of people at the
same time make tremendously more sense in a broadcast model than a TCP
connection per viewer model.

It works fine for sporting events that are expected to have fairly low
viewership or for content like Netflix which gets preprocessed and pre
delivered to closer-to-viewer nodes. If I'm trying to watch Clemson vs Alabama
in the national title game and the feed goes out because so many people are
trying to watch it at the same time I'm not going to be a happy camper.

~~~
baldfat
Just get Direct TV or Slingbox you get all that for $30 to $35

~~~
brightball
Used to have Direct and got tired of the annual price increase drill.

Step 1) Get pestering phone calls to change your package for 3-5 months for
FREE to include all of the movie channels

Step 2) Promotion runs out and you want to go back to your old package, but
it's now $5 / month more expensive than it used to be

Step 3) Start refusing the free package change calls and watch the calls just
keep...on...coming.

Plus, with Direct I can't use my Tivo Bolt...which is giving up a lot because
it's so much better than any of their DVR tech.

------
ctdonath
ESPN is at the dangerous point that Kodak was at some time back - and made the
wrong decision about.

When the mass popular switch to digital photography was imminent, Kodak still
had enormous sales from film - mostly sold & processed thru retail stores,
which relied on the product/service to generate foot traffic (one visit to buy
film, one to drop it off for processing, one to pick up prints - with likely
tangential purchases while the customer was there). Retailers saw Kodak
starting to make noise about switching to digital, which would have (and
eventually did) destroyed that very lucrative sales model - so the retailers
threatened Kodak with "if you push digital, we'll drop your products" ... so
rather than sacrificing the cash cow, Kodak slowed the digital roadmap to >5
years to keep retailers happy, failing to notice that retailers weren't the
actual end customer making the actual decision to buy film. Competition
emerged from bizarrely non-sequitur competitors, like printer & computer
manufacturers Epson & Hewlett-Packard - leaders in markets that had nothing to
do with photography. Bottom-end digital camera prices fell to around $100,
UI/UX improved, picture-takers discovered that "digital film is free", and the
whole market switched from photochemical consumables to digital capital
equipment practically overnight.

ESPN and other major specialty content producers are facing the same problem.
The bulk of their customers still watch via "cable TV", and cable TV providers
are likely threatening to drop the ESPN-type packages entirely if they start
providing serious streaming/app alternatives. That's a LOT of revenue to lose
fast, so they're avoiding the big push to new media. Unfortunately for them,
some other content delivery companies (like Netflix and Amazon) are seeing the
potential, and putting big money into producing or negotiating highly
desirable alternative content. Remember, there is a new generation coming of
age who were raised playing soccer or other engaging sports instead of
American football; they're looking for content that's not necessarily NFL etc,
they're not so mentally tied to "TV", they want mobile content, and other non-
sequitur competitors are making serious progress toward capturing their
dollars where ESPN et al are reluctant to go under threat of old-model revenue
being abruptly cut off.

If ESPN et al really want to survive the pivot that killed Kodak, they need to
call Comcast et al's bluff, pivot into on-demand streaming, and partner with
Apple, Amazon, Netflix, etc for future survival, and make an ESPN-branded push
for viewers to spend the one-time $50-150 already for a superior & enduring
viewing experience. Otherwise, NFL on iTunes and World Soccer on Netflix etc
will become not just a thing, but the thing. Kodak doubled down on retail,
instead of leaping to the seemingly non-sequitur future, and died. ESPN is
doubling down on cable, with no reason to expect a different result.

~~~
baldfat
> Retailers saw Kodak starting to make noise about switching to digital, which
> would have (and eventually did) destroyed that very lucrative sales model -
> so the retailers threatened Kodak with "if you push digital, we'll drop your
> products" ... so rather than sacrificing the cash cow, Kodak slowed the
> digital roadmap to ....

I don't think that is the right narrative. All those same retailers print out
pictures more now then ever. Kodak's digital products were a sub par and their
competition (Especially Sony and Nixon) were destroying them in the market.

~~~
ctdonath
That _was_ the narrative. That was the perception at the time, and decisions
were about a predictable future (even if the prediction was wrong). The
retailers may (I'll have to check) be printing more than ever, but customers
are walking into the retail store _once_, not three times - and that point
alone terrified retailers.

Kodak had excellent imagers in development and high-end production. They knew
the imaging technology & business better than anyone. They just didn't pivot
(fast!) to making that their core competency. Having literally 5 miles of
chemical processing factories clouded the vision required to build highly
competitive cameras.

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carsongross
I wonder if any other recent changes by ESPN are compounding their viewship
decline.

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bubbabojangles
Black background with white text makes me semi blind for about 5 minutes.

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KZeillmann
Is it just me, or are the images on the page incredibly broken?

~~~
ctvo
That's sort of what they're going for. It's streaming and the distortion that
happens sometimes.

