Would You Pay $30 Per Month for ESPN?

Would You Pay $30 Per Month

A la carte would decimate the pay TV industry, resulting in loss of $70 billion in revenue, Wall Street analyst warns again

If pay TV providers were forced to sell channels a la carte, retail prices would skyrocket — with ESPN costing in the ballpark of $30 monthly — and the industry overall would lose half its revenue, or $70 billion, according to one Wall Street analyst.

Cable and satellite companies and their programming suppliers have for years fought a la carte, warning that it would only result in higher prices and fewer choices. Needham & Co. analyst Laura Martin, who subscribes to the same school of thought, weighed in on the topic again in a research note Monday.

“We can find no math where unbundling is the best economic answer,” she wrote. Martin cited declines in the value of newspaper and music industries, which have been disrupted by Internet distribution models, for her analysis.

According to Martin, only about 20 cable channels would survive in an a la carte world. Industry execs have repeatedly raised the specter of niche-oriented and minority-targeted channels becoming unsustainable in such a marketplace.

SEE ALSO: McCain: Pay TV Business Is Rigged Against Consumers

With a la carte, ESPN’s audience would shrink by about one-fifth, to 20 million “super fan” homes, and the cost of the network would rise to $30 monthly because ESPN would need to recoup lost subscriber fees and ad revenue, according to Martin.

In a statement ESPN said, “The report underscores what economic studies have said time and time again — that the cable package presents an undeniable value and the consumer would pay more and get less with a la carte.”

As a political issue, a la carte TV plays to a populist base — appealing to consumers’ feeling that they should pay for only what they want, and nothing more. Sen. John McCain (R-Ariz.) in May introduced a bill that would require cable and satellite TV to offer channels on an a la carte basis; however, the legislation has no cosponsors and is not expected to make headway.

McCain and other advocates of a la carte say bundled channel pricing forces people who aren’t interested in certain kinds of programming to subsidize it — as in the case of relatively expensive channels like ESPN and regional sports networks.

At a Senate subcommittee hearing in May, National Cable & Telecommunications Assn. chief Michael Powell argued that government-mandated a la carte would be highly disruptive to the industry and would be unlikely to benefit consumers.

“It’s a very serious question mark whether consumers would have lower bills or cheaper service as a result of a la carte,” he said, citing past studies including one by the Federal Communications Commission in 2004.

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  1. Jedi Master says:

    I wouldn’t pay 10 cents for ESPN either. We need ala carte so people who have no interest in sports wouldn’t have to feed their monopoly. Other channels that show reality crap would go off the air and people would only pay for what they are interested in.

    When ESPN couldn’t pay for the billion dollar contracts they recently signed let them lose the rights to them and let other networks bid on them.

    • gary johnson says:

      ESPN sucks. I will never pay extra for their service. I would
      still have to listen to all their commercials. I love sports but I hate ESPN more.

  2. occultology says:

    The ‘murder’ of Free TV by the cable & satellite oligarchs has led to high prices (Financial Rape) and numerous inane program channels that turn our chemically-contaminated, media-warped brains into Neuron-Mush; why is there no TV channel where I can learn a foreign language? Why is there no ‘Philosophy Channel’? Why is there no ‘Esoteric Show’, where profound information is broadcast to the masses? Why do ‘different’ and supposedly ‘competitive news’ channels always broadcast not only the same ‘Stories’ (I prefer actual ‘News’) but also run them in the exact same order of ‘importance’ nearly every day & night? (Most of which seems to flow directly from the Pentagon disguised as ‘Information’?) Why are we, as a nation, not all brilliant and enlightened super-thinking beings thanks to this electronic supermachine, instead of dumbed-down, half-witted, pre-programmed, illiterate fools without one single original thought in our brains? The answer seems to be the fact that WE don’t watch ‘Programs’…WE ARE THE ‘PROGRAMMED’. And most people don’t want to pay over $100.00 a month to be yet another Mind-Controlled Slave who ‘thinks’ whatever their Daddy-Government wishes them to think. One last question: Why does EVERY ‘News Anchor’ end their broadcast with, “We’ll SEE YOU next time…” [since the conversion from analog (Light & Sound) to Digital Pixels, perhaps some of those tiny pixels work the other way around, and they actually CAN SEE US from the other side of the electronic beast.

  3. w629 says:

    I wouldn’t pay ten cents for ESPN, one of the most useless networks in all of television. Other than broadcasting games I’m not interested in, they took a five minute sports report and turned it into a coma-inducing wall of endless sports talk. The phrase “mental masturbation” comes to mind. I don’t subscribe to pay tv in any manner and never will. It’s overpriced and not worth it. And don’t get me started on dealing with customer service at places like Time Warner, DISH or DirecTV.

  4. Scott says:

    I might pay it because I use it and have no problem with paying for something I actually use. That being said perhaps with a la carte programming it would also cost ESPN less to broadcast certain sports as the demand may go down too. What networks pay for this programming is absurd to start with. If anything I could see this creating MORE jobs and opportunities as there will need to be more variety at more price points for more consumers. Its amazing how many people scream for “competition” and “free market” until you actually get those things and then they cry that its the end of the world. Stated another way, I think its better to have 50 people make $50,000 than one person making $1,000,000. There is plenty of everything for everyone. Its just that the monopoly powers that be insist on having 100% of everything at all times.

  5. ralph says:

    if it kills cable profit, then that would mean more disposable income for other goods and services, which would benefit the consumer. if the producer wants to make money, they will stay in business. if not, they open the way for others to succeed. they are not gifted with the right of having to produce

  6. El Gato Grande says:

    The model exists today with The likes of HBO, showtime, etc. HBO seems to do fine in that model. ESPN would find a way to reduce its cost. And let’s be real, some channels need to go. You pay a basic fee for service–what the cable company needs for infrastructure. Then you pay for what channels you want. You can still offer bundles and specials.

  7. Joe Smart says:

    The pay TV industry is going to price itself out of existence as fewer and fewer people can afford the cost of their service every year. Meanwhile forward thinking HBO is ready to go a la carte on their own the minute they sense the tipping point. All they have to do is make HBO GO available to non-cable subscribers and people who stream programming like Netflix will also be be to get HBO. There’s a reason HBO is looking at how many people download episodes of Game of Thrones but do nothing to actually stop it–they’re getting cheap market research for how much demand there would be for HBO Go should they cut their exclusive ties to the cable model. And it’s going to happen. It’s not a matter of if but when.

  8. Robert says:

    I’m tired of the gloom and doom approach to everything. The world won’t end if ESPN doesn’t exist. And if they can’t find a better business model then bundle packaging thby maybe they shouldn’t exist. I’m tired of supporting a hundred channels when I watch maybe 10, two being SHOWTIME and HBO who only charge me 5.00 a month.

  9. Steve Martin says:

    I cut the cable cord years ago, and more people are doing it everyday. Eventually the cable/satellite providers will be irrelevant.

  10. guest says:

    My husband would pay for it but I would nix it! Wife wins that battle.

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