“Are You Willing To Pay $36 Per Month For ESPN?”

Given how few other channels I regularly watch on Dish, in essence, I already am.

The amusing part of the linked article is this:

Michael Nathanson, of MoffettNathanson Research crunched the numbers to see how much it would really cost to create an a la carte world where consumers only had to pay for the stations they wanted to watch. Looking at “reach” (defined here as the percentage of U.S. viewers watching an individual channel over a finite period of time) and subscriber fees (the price per subscriber a company like Comcastpays to a network like ESPN to carry the network) Nathanson found that users would have to pay $36.30 per month for ESPN.

Of course ESPN is an outlier. With a $6.10 subscriber fee (paid by cable companies) ESPN is far and away the most expensive network.

But even less expensive networks like TNT, Disney Channel and USA would be pricey on an a la carte basis.TNT would cost $8.95 per month, Disney Channel would cost $8.25 and USA would cost $5.45 per month.

Those number are, of course, ridiculously high and they’re even worse when you look at what people believe they should be able to pay for something like ESPN a la carte. Beta Research found that the perceived value of ESPN to viewers is $1.45 per month — a $34.85 difference between what they would actually be asked to pay.

So your average rube undervalues what ESPN currently costs in a bundle by a factor of four.  Yeah, I’d say somebody’s in for a bad case of sticker shock if unbundling cable ever becomes a reality.

34 Comments

Filed under ESPN Is The Devil

34 responses to ““Are You Willing To Pay $36 Per Month For ESPN?”

  1. Addr

    A la carte is what everyone says they want, but I honestly don’t ever see that happening. The TV entertainment industry as it currently stands is a massive money-printing machine for all involved, and those who have the ability to change the industry (like ESPN) have no incentive, monetary or otherwise, to disrupt the status quo. At best you will see tepid rebundling like Sling TV to test the waters, but even that is unsustainable because, as the article mentions, there is a huge gap between the perceived value of the channels on offer and what it actually costs to provide those channels.

    The industry is ripe for disruption, but it won’t be from a la carte channels.

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  2. 7 or 8 bucks a month with a package for the college football season of 30-35 bucks imo.

    Not that it’ll ever happen. Agree that it’s too profitable to alter the revenue model.

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  3. Mark

    I would love to see channels unbundled. The price may start out high, but I bet it wouldn’t stay that way. Plus, a lot of folks that don’t want ESPN would see their bills go way down.

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    • Mayor

      Plus, a lot of annoying BS channels would simply disappear. Now you and I are subsidizing the “Fern Channel” and everybody who wants to watch ferns grow on TV. If every channel had to be paid for separately you would see each channel have to justify itself with revenue and therefore many would just go the way of the dinosaur. As it stands right now, the cable providers include stations as filler (“see, you get 232 channels with our Maxi-package”) to justify the price of the package with maybe only 1 person in the whole system watching that channel. The system we have now is yet another perversion of the free market.

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    • Bright Idea

      And those of us who do want to watch ESPN?

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      • Mark

        You get to pay for it based on what the true market price would be, without being subsidized by those that don’t want to watch it.

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  4. Scorpio Jones, III

    “Are You Willing To Pay $36 Per Month For ESPN?” No.

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  5. Uglydawg

    I sure pay a lot for channels I’ve never watched and never will watch. Maybe one nswer would be neighborhood Bulldog groups that could all watch the games in one guy’s barn or garage. Everyone splits the bill.

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    • Cojones

      Now that is a sociable way to break up a cartel. I’d drive a few miles for that. And bring cookies.

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    • Just Chuck (The Other One)

      I don’t like most of my neighbors. They’re Auburn fans and one of them has a nephew who plays at Auburn.

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  6. Connor

    So currently ESPN is being subsidized by cable viewers who pay the fee but don’t watch the channel, and if only the actual viewers were paying they’d have to pay 36 bucks to make ESPN whole? Couldn’t the question be “are sports leagues prepared to collect 1/6th of their current tv money?”

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    • Mayor

      ^This. ESPN wouldn’t be the high-handed enterprise it is today if not for the current system. Sure ESPN–start charging $36 per month and see how many viewers you have then. I’m betting a small fraction of what they have now.

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  7. Rugbydawg79

    we pay close to $170 a month and all I ever watch is college football and the weather channel (when it is really weather) the wife informs me that also includes internet–there has to be a better way

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  8. 3rdandGrantham

    In a sense, the unbundling has already started with Sling TV, in which you can get/stream ESPN and a host of other channels for $20 a month. As a household that rarely watches tv other than sports ESPN, and the occasional Travel/HGTV type shows, we took the plunge and cut the cord about a month ago.

    So far, we’re more than pleased and are saving $100 in the process. Even better, we bought one of those Mohu antennas for $25 to pull in the local stations on our main tv, and I must say the picture via antenna is far, far superior than we ever got with cable. After all, if you’re a cable subscriber, you are never watching true HDTV programming, due to their compression of the signal in effort to save money (enhanced definition is more like it).

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    • diving duck

      It’s going to be a fun industry to watch over the next couple of decades. The cord cutters will only increase their market share as the new generation replaces the old one. The cable companies are going to have to find ways other than price increases to maintain their revenues.

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      • 3rdandGrantham

        Unless you’re really into TV, including myriad cable stations and their programming, its quite easy to cut the cord and do away with cable without feeling restricted much at all. Get a few Roku’s (I personally do not like Amazon Fire/Fire Stick), a few antennas, a decent internet package, and you’re good to go. Having Amazon Prime and/or a Netflix subscription helps too.

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    • AlphaDawg

      How as the Mohu to setup? Is it inside? How far are you from a major city?

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      • 3rdandGrantham

        Easy. Simply screw it to the back of your tv antenna intake (ANT), stick the flat antenna against the wall, then do a search of OTA signals with your tv remote. Takes 2-3 minutes. We’re only 10 miles from the various ABC/NBC/CBS etc. towers outside of a smaller city, so we only needed a basic, 30 mile range antenna. More expensive ones range up to around 70 miles, and for best results you can mount it in your attic or outside via an outside antenna. Amazon also makes solid antennas identical to Mohu, but cheaper.

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  9. Cousin Eddie

    Great ESPN would be higher than the channels the wife watches, she complains about it bad enough now, I would never hear the end of it.

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  10. Macallanlover

    The only programming I watch live I(very) selected sports, and news. I can do without the live news thanks to the internet, so I basically pay Direct TV $175 for CFB and a handful of golf majors. For all the rest I use the DVR and could get that programming from Hula. So yes, I could find a “designer package” of my shows for less money, or make up my own in an a la carte world. It would work great for me if ESPN allows you to “flex” their signal for only the months I want. Bring it on, the higher number ($36) would actually be a reduction for me.

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  11. Cojones

    How much does PBS cost in those a la carte basics?

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    • Just Chuck (The Other One)

      How about we do it on a per character basis? I’m willing to pay for Oscar. Not sure I want to watch Big Bird.

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    • 3rdandGrantham

      None. I get 2-3 PBS stations, as they are publicly broadcasted. Unless you live way out in some rural outpost, you can pull PBS in easily with an antenna.

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  12. PatinDC

    I am not sure how other cable companies work, but dropping tv programming from your cable in my area does not actually save money. It actually costs money. I have gone thru this exercise twice in the past year and it is extremely painful and unpleasant.
    Remembering that you need internet access to unbundle, HULU , Netflix et al, when you get a price for internet and phone only, it “amazingly” is equal to or more than the total pkg with the tv.
    I don’t know how people unbundle without their provider sticking it to them on the internet charges.

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    • 3rdandGrantham

      I disagree based on recent personal experience; here’s how my ‘cutting the cord’ worked out. Previously I had a Comcast bundle of tv/internet at $180 a month (includes junk fees). I dropped cable and went to a 25 mbps internet plan at $65. I use ObiTalk/Google Voice for free, so no need to pay for some ripoff phone service. In fact, nobody who has broadband should be paying anything for home phone service. If you are, you’re ripping yourself off.

      We’ve had Amazon Prime for several years, as we seemingly buy everything from them and love free 2 day shipping, so that was a big plus and was no added cost in terms of enjoying many shows/movies for free. We added Sling TV (ESPN, travel, hgtv, tbs, tnt, etc.) for $20, bringing our total monthly cost to $85, a savings of just under $100 monthly as mentioned, or just under $1,200 a year.

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      • PatinDC

        Well, my recent experience with COMCAST was very different. 🙂

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        • 3rdandGrantham

          How so? I’m truly curious as we’re contemplating a move up your way in the near future. I absolutely despise Comcast but they’re the only game in town here, though Century Link is supposed to be available soon where I live. I frankly think the $65 for internet alone is absurd, but at least we’re no longer paying $180. Of course, during peak hours we’re often getting nowhere near our promised 25 mps; more like 7-10. And of course their first response is to blame your equipment while refusing to admit that they aren’t meeting demand, which has been a minor thorn in our side.

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          • Macallanlover

            True, in a very remote area in the mountains cable is not an option for us. I have Direct TV, and get my internet and unlimited long distance phone service from TDS for about $65 per month. It is the Direct TV cost that is high to me with fees for five receivers. All my services work great for me but I only need about 35 channels to satisfy my needs.

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  13. This is bs article intended to scare people into maintaining the status quo. There is no reason for ala carte prices to be this high and even if the studios create an artificial price to protect (read maximize) their margins, true competition will force that price back down to reality in the long run.

    The cable cartels need to be smashed into a million pieces. They are the very picture of government manipulation of markets and corporate welfare run amuck.

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  14. Faulkner

    I could get by with watching ESPN only during football season. So 5 months at $30+ is not bad. I recently had ATT for everything. I dumped them and went to direct TV for video and Comcast for internet. I’m saving $50-$60 a month the first year. My area is getting Google fiber soon so Comcast will be leaving my house soon enough.

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  15. I cut the cord like 3rdandGrantham just last week actually. I was paying $170 for AT&T uverse, and was fine with the exorbitant fees until my DVR died for the second time in 6 months. When I went through the trouble of trying to watch everything we lost, I realized cutting the cord wasn’t as much of a hassle as I thought. So, I dropped it.

    I switched to Charter 60Mbps internet for $45 which does laps around the uverse internet I had. I got my own wireless router so I don’t have to pay Charter that extra $5 per month for eternity. I got the sling tv service and a roku 3, and I am paying $30 per month for the disney package. Sling is $20 for the basic pack that includes ESPN1&2, TBS, TNT, HGTV, Travel, History, H2, A&E, and AMC. They have $5 add-on packs for the rest of the ESPN’s including SECN, and the rest of the Disney Channels (XD, Jr) for the kids. You do get some WatchESPN access (1,2,&3, I believe), and hulu plus plays the ABC, FOX, and NBC shows that I watched, which aren’t that many (Blacklist, Gotham, etc.). So, I went from $170 per month to $83 per month for a $87 per month savings. Unfortunately, I can’t pick up the Atlanta channels OTA where I live in Athens, so an OTA antenna doesn’t work for me, but I can use a chromecast to stream that over my laptop if I so desire (like CBS for the tourney games). I’d even subscribe to the CBS all-access during football season for an additional $7 per month if they would put it on Roku. As a web-only thing, I’m not interested. I don’t really watch the “most watched network,” so I’m not paying otherwise.

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    • 3rdandGrantham

      Well done. For streaming, you can also run a micro hdmi/hdmi cable from your smartphone directly to your tv. I did this for a few early round NCAA games on truTV, and it worked out perfectly.

      Again what really sold me was the picture you get with an OTA antenna compared to cable or directv. Many of the tv/audio geeks on AVSforum.com all use antennas for their NBC/CBS/etc stations, even if they have cable/satellite service as the picture is so much better. Now I have a better idea what they’re talking about. Even after having top video equipment (perfectly calibrated, no less) all these years, I honestly feel like I’m just now watching hdtv for the first time, even though I’ve owned HD tv’s going back to ’03.

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  16. doiknowu

    Up here in my mountainous section of Georgia we get no OTA signals at all, and the internet is limited to 16 mbps (if you’re one of the lucky ones, and I am). Cutting the cord means NO live CBS, ABC, NBC, FOX, PBS, or Atlanta local programming. I’m holding out hope that the rumored Apple deal with the all the main commercial networks (sans NBC) will turn out to be true. That plus Sling will be enough to suit my needs.

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