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Started By
Message
re: LHN Struggling. Surprise, Surprise, Surprise.
Posted on 10/26/11 at 2:54 pm to Big Kat
Posted on 10/26/11 at 2:54 pm to Big Kat
Part of the problem that the LHN is going to face is that the cable network business model is going to fail in the next 5 to 10 years.
Internet delivery of a-la-carte networks is the future.
If you know anything about the way cable networks offer their channels to cable companies, then you'll know how it can't survive. Here's a post I made months ago on the LHN's business model:
~~~~~~~~~~~~~~~~~~~~
Well, with the business model that cable networks and cable providers have set up, the number of viewers doesn't matter all that much, at least not to the point of it being the primary issue.
The LHN's primary goal right now is to get on as many cable providers as possible. They would then get x amount of dollars per subscriber for that company.
For instance, if Cox Cable in the NOLA area picks up the LHN, and say Cox has 500,000 subscribers in that area (I have no idea how many they actually have), and say the LHN charges $0.75 per month per subscriber, then the LHN would get $375,000 every month, from just that one cable company. Extrapolate that to many companies all over Texas, Louisiana, Arkansas, etc... and you have big bucks coming in, and that's not even counting advertising revenue.
FWIW, I don't know what the LHN per subscriber fee is going to be.
But this gives you an idea of how the network can be feasible.
Also, this demonstrates how shitty the cable TV business model is for the consumer.
But the good news is that its a dying model due to the internet and other delivery methods, and the real question is whether or not the LHN can survive in an "a la carte" type environment.
ETA: Obviously, if the cable company puts it in a "sports tier" then only subscribers to that "sports tier" would count towards the number of subscribers that pay the fee.
Found this chart from 2009 that details the subscriber fees for many networks. If you have cable and you get any of these channels, then you are paying these fees every month whether you watch them or not:
~~~~~~~~~~~~~~~~~~~~~~
But like I said, that model is unsustainable. Technology is changing that, and rapidly.
One of the reasons people may not be yelling and screaming to their cable provider about getting the LHN is that they can probably easily do a google search for "college football games live streaming" and find a site that has a pirated stream available.
They will need to adjust to an internet model, and they will find when they do that it ain't worth 300 million.
Internet delivery of a-la-carte networks is the future.
If you know anything about the way cable networks offer their channels to cable companies, then you'll know how it can't survive. Here's a post I made months ago on the LHN's business model:
~~~~~~~~~~~~~~~~~~~~
Well, with the business model that cable networks and cable providers have set up, the number of viewers doesn't matter all that much, at least not to the point of it being the primary issue.
The LHN's primary goal right now is to get on as many cable providers as possible. They would then get x amount of dollars per subscriber for that company.
For instance, if Cox Cable in the NOLA area picks up the LHN, and say Cox has 500,000 subscribers in that area (I have no idea how many they actually have), and say the LHN charges $0.75 per month per subscriber, then the LHN would get $375,000 every month, from just that one cable company. Extrapolate that to many companies all over Texas, Louisiana, Arkansas, etc... and you have big bucks coming in, and that's not even counting advertising revenue.
FWIW, I don't know what the LHN per subscriber fee is going to be.
But this gives you an idea of how the network can be feasible.
Also, this demonstrates how shitty the cable TV business model is for the consumer.
But the good news is that its a dying model due to the internet and other delivery methods, and the real question is whether or not the LHN can survive in an "a la carte" type environment.
ETA: Obviously, if the cable company puts it in a "sports tier" then only subscribers to that "sports tier" would count towards the number of subscribers that pay the fee.
Found this chart from 2009 that details the subscriber fees for many networks. If you have cable and you get any of these channels, then you are paying these fees every month whether you watch them or not:
~~~~~~~~~~~~~~~~~~~~~~
But like I said, that model is unsustainable. Technology is changing that, and rapidly.
One of the reasons people may not be yelling and screaming to their cable provider about getting the LHN is that they can probably easily do a google search for "college football games live streaming" and find a site that has a pirated stream available.
They will need to adjust to an internet model, and they will find when they do that it ain't worth 300 million.
4
Posted on 10/26/11 at 3:00 pm to WikiTiger
quote:
One of the reasons people may not be yelling and screaming to their cable provider about getting the LHN is that they can probably easily do a google search for "college football games live streaming" and find a site that has a pirated stream available.
Bingo
Posted on 10/26/11 at 3:04 pm to WikiTiger
quote:
Here's a post I made months ago on the LHN's business model:
Very interesting take on the possible shift in media consumption. I'm not 100% on board with the thought that cable will go to a full "a la carte" system, but major changes will certainly take place.
The guy who makes the best hot dogs only has so much leverage over Wal Mart for so long; Wal Mart will eventually find a supplier as good and cheaper. Cable operators are the "Wal Marts" of modern media distribution to consumers!
This post was edited on 10/26/11 at 3:05 pm
Posted on 10/26/11 at 3:15 pm to WikiTiger
This is basically spot on. The biggest reason the LHN will fail is because ESPN believed it could leverage cable companies to add it at $0.40/customer to standard or expanded basic cable packages, forcing the majority of cable consumers to pay for the channel. This is why they agreed to pay Texas so much for the rights.
The problem with that is the demand didn't even come close to supporting that model, and a lot of non-Texas fans have been calling carriers threatening to switch to a another cable provider if forced to pay for the channel.
Because ESPN drastically overpaid Texas and guaranteed the payments, it isn't fiscally viable for ESPN to allow LHN to be offered a-la-carte or included in a sports tier. Furthermore, demand from the Texas fanbase itself isn't enough to warrant this option, regardless of price or financial obligations to Texas.
I will be highly surprised if LHN doesn't fail, and fail epically. Even if they are able to acquire rights to air more football games on it, I'm still not sure cable providers will agree to force it on consumers for fear of blowback from a large contingent of non-Texas fans.
The problem with that is the demand didn't even come close to supporting that model, and a lot of non-Texas fans have been calling carriers threatening to switch to a another cable provider if forced to pay for the channel.
Because ESPN drastically overpaid Texas and guaranteed the payments, it isn't fiscally viable for ESPN to allow LHN to be offered a-la-carte or included in a sports tier. Furthermore, demand from the Texas fanbase itself isn't enough to warrant this option, regardless of price or financial obligations to Texas.
I will be highly surprised if LHN doesn't fail, and fail epically. Even if they are able to acquire rights to air more football games on it, I'm still not sure cable providers will agree to force it on consumers for fear of blowback from a large contingent of non-Texas fans.
Posted on 10/26/11 at 6:20 pm to WikiTiger
quote:
Also, this demonstrates how shitty the cable TV business model is for the consumer
yes indeed. for us old timers that remember when cable was introduced it has morped into the a very expensive enterprise. believe it or not, cable was first sold to us as programming w/o commercials; that's right our $5 or $6 bucks a month provided programming commercial free. that is probably where the business model originated. the one that viewership is not important; it was all about the number of subscribers. the cost of advertising, however, is most definately dependent on actual viewership (as it should be). we, as consumers, pay both costs and the cable monopolies continue to operate in a competitive vacuum. in the future, i cannot see this model surviving. given a choice, why do i have to pay for seemingly endless channels in a foreign language and about 50 channels that i never watch? sure, i pay thru the nose now, but i'm jumping off of this ship the minute an acceptable alternative is available. this is one industry that sorely needs competitors from a cost and from a service standpoint. oh, and i don't want to pay one damn penny for tejas U. programming even if they have a great volleyball team (or all the other wonderful sports progamming they offer).
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