Their entire buisiness model is based on having a high subscriber base. They cannot function if their revenue stream is suddenly cut in half (or even lower)

quote:
And their contracts with the sports league are of no concern to consumers. If they can't pay up, it is up to them to make up the revenue elsewhere. That's how the market works. The only reason they payed those huge figures to broadcast games is because they know they have 100 million subscribers through cable. The price would be different if viewership was different.

Their contracts with sports entities ARE of concern to the consumers. Again, they can't simply tear those contracts up and tell the content providers their can't pay them money owed. The only reason ESPN is as cheap as it is now is because they have 100 million subs to help lower costs to current subscribers.

What other revenue streams could they possibly create other than more advertising? Advertisers are not going to be able to make up the difference in lost revenue from subscribers.

ESPN doesn't actually create own or content that people want to see so they cannot "find a sweet spot".

ESPN is a middle man and w/current the current middle man cable structure remaining in place they cannot exist.

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Posted by rocket31

Member since Jan 2008

41819 posts

Posted on 2/9/15 at 10:32 am to Dr RC

while both sides are making good arguments, its pretty naive to think anyone knows how this all will play out, especially since the a la carte model is still in its infancy stages.

however, every year, more and more younger people continue to cut the cord, so in time, adjustments will need to be made.

i see it as having a few large networks (ESPN, CNN, TNT etc) that we will pay a monthly subscription fee and the rest of the bloat networks will be regulated to youtube and make money off of ads.

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Posted by rintintin

Life is Life

Member since Nov 2008

16227 posts

Posted on 2/9/15 at 10:36 am to Dr RC

quote:
Their entire buisiness model is based on having a high subscriber base. They cannot function if their revenue stream is suddenly cut in half (or even lower)

I'm simply stating the laws of supply and demand. They would never be able to charge $100/Mo, or anything close, as you said in your earlier post, simply because demand would dry up at those prices. I'm not getting what you don't understand about that point I'm making. It's economics 101.

Their business model is based around offering services through cable providers. If they went a la carte, which is what we're talking about, they would have to develop a new business model.

quote:
Their contracts with sports entities ARE of concern to the consumers. Again, they can't simply tear those contracts up and tell the content providers their can't pay them money owed. The only reason ESPN is as cheap as it is now is because they have 100 million subs to help lower costs to current subscribers.

What other revenue streams could they possibly create other than more advertising? Advertisers are not going to be able to make up the difference in lost revenue from subscribers.

ESPN doesn't actually create own or content that people want to see so they cannot "find a sweet spot".

ESPN is a middle man and w/current the current middle man cable structure remaining in place they cannot exist.

None of this has anything to do with my argument, and I think we're getting a little off track.

Simply put, if ESPN went a la carte, they would not be able to charge anything close to $100/Mo.

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