(06-09-2016 03:18 PM)mturn017 Wrote: (06-09-2016 10:54 AM)BullsFanInTX Wrote: (06-08-2016 07:00 PM)Attackcoog Wrote: (06-08-2016 06:23 PM)JHS55 Wrote: Self produced live streaming games is the future of not just football from each college and packeged together. Its really everything...
Cable companys are all ready bracing for their own demise...
All this money that they make and distrubute to college confrences will and is drying up
C-usa at $200k per school per year is just the start for all conf...
Is it? Or is it simply a period in which the method of content delivery and the way you pay for that content is changing. I'm not seeing a decline in the demand for college sports on the consumers part. Im just seeing them look for different cheaper ways to get that content.
You charge what the traffic will bear. Right now---the traffic (cable TV users) are finding their content cheaper from other sources. But the content is actually being consumed in greater amounts. Streaming is only cheaper because content providers have been charging streamers less money because they have not really represented a large enough income stream---cable was the big earner. Streamers just represented another small income stream. Cable made the big money so cable paid the freight for content providers.
As that changes and streaming become a bigger and bigger portion of the way consumer access content--then income to cable companies will drop. They wont be able to pay what they did for content. The content providers still have bills to pay. At that point, content providers will look to the streaming companies to make up that lost income. Thus, the streaming companies will have to pay more for right, because of the cable companies cannot, As they have to pay more for content---streaming prices to consumers will go up. Cable will be looked to cover less of the content providers productions costs. Thus, cable costs will begin to decrease. You'll also see cable unbundle services so you can control your bill by buying only what you really need or desire. Its all going to even out.
The market always reacts. It just takes time for it to adjust to new technologies and shifts in demand.
Sounds like you took Econ 101 and learned about supply and demand. A simple concept many do not get. In any supply and demand curve, if less and less people buy cable products, the price WILL go down at some point or cable companies will go out of business at a certain point.
The price will go down for cable but the price that ESPN is able to charge will go down as well and thus the price they pay for content. ESPN has been extremely profitable due to the cable TV model and they can't hope to make up those profits via streaming revenue once they start to lose them from cable. Every cable subscriber buys ESPN but only about half actually want the channel. So for every two that cut the cord only one will seek out ESPN via Sling or something of the like. The rest will be perfectly happy with their Netflix and Hulu. Not only that but they have to deal with pirating online, so even if the average ESPN customer was willing to pay more for online access many are going to say F that and use their buddies login. That's why HBO has started offering online service without a cable subscription, they realized that they're better off selling online service to people who wouldn't buy cable anyway rather than let them steal it. ECON 101 (or maybe 102) also tells us than in a perfectly competitive market firms can't be profitable over the long term, only in the short term before market competition catches up. That's what we're seeing here, new technologies have enhanced competition in the market. This IS the market correction and it's not going back. Media's getting cheaper and companies are going to have to broaden their base to grow. I agree that cable isn't going away but cord cutting is going to continue to grow and moving away from bundling is not good for networks like ESPN.
A couple of base facts---
**Consumers are watching and consuming more content faster than they every have in history. Content is what drives people to ESPN.
**Without the content, ESPN is just 4 letters. Nobody will pay a premium price for ESPN (or ANY network) if they don't have content you want.
**One third of all TV content consumed is sports
People subscribe to your network or to your streaming service based on the content you offer. ESPN has become the HIGHEST paid network because they have content that people will SWITCH cable services to get. If a cable provider didn't offer ESPN---people will dump that provider and move to a provider that does carry ESPN. That gave them pricing power. So, the content ESPN owns is attractive to viewers and will draw a large loyal following of high paying subscribers.
In an unbundled world---networks who don't have high demand content are going to die. To me, that says other services/networks will be aggressively bidding on exactly the type of content that ESPN has (in order to spur higher subscription numbers--hopefully at higher rates). More services/networks competing for a limited pool of high demand content spells rising content prices for sports content in the long run.
This is just a period of disruptive change. Once the cable companies and content providers begin to figure out new ways to deliver and monetize the content, the content bidding wars will begin. In short--my view is content is king. If you don't have content, you have nothing to draw viewers to your streaming site or network. Worse yet, unlike TV Networks, the barriers to enter the streaming site business are quite low--if you try to low ball a rights holder, its not that hard for them to create their own streaming site to distribute their content independently. Long term, I think profit margins will be much thinner for networks like ESPN---but I think content providers are going to do very well in an unbundled world.
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