I wonder: can espn , which holds streaming right for most live sports event until 2020 , use that power to start an online subscription service that also includes other content , and become the de facto tv provider ?
I'm sure ESPN could, but they probably wouldn't. Online streaming on this scale would essentially become pay-per-view, and the pay-per-view revenue for most games would not match the current broadcast revenue.
Would you pay $50 per football game you wanted to watch online? I only say that because I used to pay $20 for a Houston Rockets playoff game on pay-per-view in the mid-90's, and they went away from that model once the broadcast revenue from having every subscriber pay into a bundled package overcame the pay-per-view model.
I think you're assuming the pay per view model would not change as well. Pay-per-view makes a fortune, but only appeals to a small set of the audience due to the currently high-costs. However, if we use the superbowl as an example (huge adverstising costs, and large audience).
110 Million people watch the superbowl, a 30 second commercial costs about $3 million (time slot fee only). Are there more than 30 commercials during the superbowl? I couldn't find that number, but 30 seems like a lot, so let's go with that.
The revenue per viewer is about $1.20. So even if the cost to watch the superbowl was $4, the broadcaster would still be making more than they currently are with the advertising model.
Where this breaks down is the amount of time people spend channel surfing. I think as people channel surf less, they'll watch less, which is why the model of paying directly for each piece of content is a challenge.
Sure but they never will. ESPN makes $5 per cable subscriber in the US regardless of whether you watch it or not. You think your model works better for them?
BTW 90% of my US sports are not done on ESPN. Of the 4 major sports they only do a few select games.
akgoel|12 years ago
pedalpete|12 years ago
110 Million people watch the superbowl, a 30 second commercial costs about $3 million (time slot fee only). Are there more than 30 commercials during the superbowl? I couldn't find that number, but 30 seems like a lot, so let's go with that. The revenue per viewer is about $1.20. So even if the cost to watch the superbowl was $4, the broadcaster would still be making more than they currently are with the advertising model.
Where this breaks down is the amount of time people spend channel surfing. I think as people channel surf less, they'll watch less, which is why the model of paying directly for each piece of content is a challenge.
mikeryan|12 years ago
BTW 90% of my US sports are not done on ESPN. Of the 4 major sports they only do a few select games.