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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Posted by Dr RC

The Money Pit

Member since Aug 2011

58174 posts

Posted on 2/9/15 at 10:48 am to rintintin

quote:

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.

Again, ESPN CANT do that b/c they wouldnt be able to pay the money they owe to the content providers.

ESPN doesn't want it b/c they are a middle man for sports content providers and need to be have an extremely high subscription rate in order to function. Cable and satellite tv providers don't want it b/c they are the middle man for tv networks. Sports content providers don't want it b/c their enormous profits are heavily based of the exorbitant deals ESPN (and others) pays for the rights to air their product. Athlete players associations (and athletes by extension) don't want it b/c their salaries are now huge due to the revenues generated from TV deals. Disney doesn't want it b/c ESPN is one of their most profitable investments.

Its not just ESPN that has a vested interest against a la carte. Nobody involved in providing the content to us is going to want to go to a la carte b/c its all just one big merry go round of money that would be severely cut into if the model drastically changes.

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

again, I never said ESPN by itself would be $100 a month.

the max I put it at was $50.

The $100 would be far ESPN, ESPN2, ESPN3, ESPNU, and SECN as a package.

Also, for many reasons, HBO cannot be compared to ESPN like has been done in this thread. Their business model is not heavily based off of captive audience advertising like ESPN, they do not pay anywhere near the fees ESPN does for the rights to air movies, and they actually create original content that people want to see.

This post was edited on 2/9/15 at 10:58 am

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