$7/Month Isn’t a Bad Deal for ESPN

Mari Silbey —  February 20, 2013 — 24 Comments

ESPN for $7

I love ESPN. I am entirely willing to spend gobs of money on my cable bill just to get it. Even so, my jaw dropped when I read that the licensing fee for ESPN programming is set to go above $7 per month in 2017. That’s the amount pay-TV operators have to spend per subscriber to get ESPN programming, and the amount that gets factored into our monthly cable bills for including the sports juggernaut. For $7 a month, I get ESPN, ESPN2, ESPNU, ESPN3, the WatchESPN app, and… wait a minute. I get all that for $7?

Yes, I was all set to write a snarky post about retransmission fees and the high cost of programming these days, and then I thought about all that I get from ESPN. Pretty much any sporting event I want to watch that’s not being broadcast on the free networks is available somewhere on ESPN. And that WatchESPN app? Man that’s come in handy when I’ve been away from the living room TV and wanted to catch a college basketball game or two. And it works on both my iPad and my Android phone. Inside and outside my house.

The big catch of course is that not everyone is a sports fan, and most cable subscribers have to pay for ESPN programming whether they watch it or not. On the other hand, I don’t watch a lot of the junk on the “free” networks (morning news programs, terrible reality TV shows, etc.), and I still have to pay for their skyrocketing licensing fees. So maybe all’s fair in love and TV programming. Regardless, there’s no cord-cutting in my future. Cable is expensive, but at least I enjoy what I get for my money.

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24 responses to $7/Month Isn’t a Bad Deal for ESPN

  1. No, you don’t get all that for $7. You get it for, what, $60 at the least (excluding any specials). And as you point out, this is subsidized by a huge number of people that pay for ESPN but never watch it.

    I’d be thrilled to ONLY subscribe to WatchESPN with full online content for $7/month though.

  2. $7 here, $7 there, and you’re quickly over $100/month. Of course, cable’s got me by the short hairs. Since the digital television transition, I can’t reliably tune in over-the-air broadcasts (and Hulu’s Scientology ads are a turn off). Interestingly, Verizon introduced a lower tiered non-Sports FiOS TV lineup that costs less than what I currently pay BUT adds BBCA in high def – which I don’t currently get. Hm.

  3. I would love to opt-out of paying for any sports programming, ever! It’s the largest component of my cable TV bill and I don’t want it. What a rip-off.

    I am thinking of blowing off my cable TV just because of this.

  4. Yeah, the Verizon non-sports tier is interesting. Not for me (or you, Dave- be honest), but as an option for people like Richard.

    As for the cost of bundled content- you have to subsidize content development somehow.

  5. Funny, all I seem to watch is sports or premium channels. Most of the “basic” cable channels I have no use for.

    As fees and bills grow, the demand to customize one’s content will grow. The current model is unsustainable as far as I can tell, but that doesn’t mean we don’t have some more good years of it.

    Mari, I read recently that Duke undergrads don’t even have cable tv in their dorms anymore… and they don’t miss it. The younger generation is a completely different kind of customer.

    Dave, I just noticed the footer on the page. Amusing.

  6. What would be more interesting than a sports-free bundle, would be a sports only bundle.

    Of course none of us really want less channels, just to pay less money. Can’t expect anyone to want to receive less money, though.

  7. ESPN and other media giants need to get wise and realize that ala cart is the future. I’d pay $10 a month for all that sports coverage and i’d bet there would be plenty of others that would too and the bigger profits would start rolling in. These company execs just need to stop operating under this archaic model.

  8. Tom- You’re saying I’m old, aren’t you? :)

    Yes, I know. It’s the younger cohort that’s going to be interesting to watch. Will they start paying for cable TV once they have their own incomes? Going to a bar to watch every game gets expensive too.

    And will today’s college kids be able to get jobs to afford pay-TV?

  9. “The big catch of course is that not everyone is a sports fan, and most cable subscribers have to pay for ESPN programming whether they watch it or not.”

    Let’s take my particular use-case scenario:

    I’m not a sports fan. I don’t watch sports, and neither does anyone else in my household. Don’t watch the Superbowl, the World Series, college sports, bowling, whatever have you.

    However, I do religiously watch the NBA. And ESPN has blockout coverage on a substantial portion of the playoffs. So even if I had the option to not pay the $84/year in some bizarro a-la-carte world, which of course I don’t, I’d still pay because ESPN pays just enough to the NBA for it to be a must-have for me. Disney has done very crafty stuff with ESPN.

  10. Sports drives TV viewing. I don’t have a problem paying for the sports I want to watch either on ESPN or my local RSN(s). That’s why many of us on the West Coast continue to complain to DirecTV abotu the lack of Pac 12 Networks. I would guess if you took a poll of why people haven’t “cut the cord” most would say it’s for sports. If you cut the cord you can’t view most sporting events outside of the few that appear on OTA stations but if you’re in an area w/out good OTA coverage you’d be out of luck.

    There is a reason that Comcast/NBC turned Versus into NBC Sportsnetwork and are starting up so many CSN RSN. TWC just gave a gazillion dollars to The Dodgers to start up their own RSN. Fox is flipping Speed into Fox Sports 1, CBS rebranded CBS College Sports into CBS Sportsnetwork. We can’t get enough of the sports we crave.

  11. “Interestingly, Verizon introduced a lower tiered non-Sports FiOS TV lineup that costs less than what I currently pay”

    That is indeed interesting. And I’m curious about how Verizon gets away with that.

    I’ve been under the impression that channels like ESPN avoided bizarro a-la-carte world by structuring their contracts so the MSO would have to pay substantially more for each ESPN sub if they didn’t have it on a basic-enough tier that a certain (high) minimum percentage of their subs received.

  12. Rob- I know Comcast users can’t get the Pac12 app, but are you saying DirecTV subs can’t get the Pac12 networks at all?

    On that front, I have a Q&A piece coming out soon with the head of Pac12 Enterprise’s digital programming. (Fierce Cable) Interesting stuff. And what I wouldn’t give for the ACC to consolidate media rights the way the Pac12 has. The ACC can’t even figure out which schools should be in its conference.

  13. Ben, yeah I’m mostly fine with my package. But it’s weird that by paying less money I could receive BBCA HD – a channel I currently don’t get on a higher tier. Folks who watch Downton Abbey still might enjoy college football and vice versa, sheesh.

  14. The problem I have with Verizon’s “Select HD” package is that it removes a lot more than sports. AMC, C-SPAN, CMT, Comedy Central, Cooking, C&I, E!, Fox Movies, HD Net Movies, OWN, Science, Smithsonian, Spike, Syfy, TNT, Travel, TCM, Universal, and others… I don’t care about sports, but there are a handful of these channels that I do care about.

    My guess is more than some of them are part of contractual bundles with the sports channels. If they had a true “remove ONLY sports from my current tier”, I would greatly consider it.

  15. Exactly, and in reverse the $5/month to add the channels you mention plus the sports seems like a decent deal. Still don’t understand where my BBCA HD is, tho. Available to 3 of the 4 tiers, above and below mine – weird.

  16. Ala carte would be ideal, But I would welcome cable tv back to my home if there were smaller channel packages that did not require the prerequisite purchase of another tier.

    My broadcast channels are free OTA, but every provider includes them in their basic package.

    I’m not an ESPN viewer, but it is pushed on you is you want any tier of service above “basic cable”. As already pointed out, sports-less packages have other deficiencies as well.

    While the cable & satellite companies deserve to cover their operating costs, the programming costs are always structured so that you have to pay for something that you don’t want in order to get what you want. I can’t name any other industry that gets away with that.

  17. I would also happily opt for a no sports tier. I have always told Verizon they need to consider offering an Ultimate package that replaces Red Zone with more movie channels. I don’t even have the sports stations added to my channels on my TiVo since nothing is ever watched on those channels. The last thing I watched on ESPN was Playmakers before the NFL got their feelings hurt and pressured them to cancel the series.

  18. Can I drop the $140 of channels I don’t use and just pay $7 for the suite of ESPNs? (haha) Sports is the only reason I get cable.

  19. @Ben,

    Nobody wants fewer channels? Be careful there. I’d happily drop all my SD channels, all the non-English channels (Comcast 6xx in my area), all the shopping channels (HSN et al), and lots of the others too. On my TiVo’s the only channels that are checked are the ones between 700 and 826, and probably only half of those (unused, channels I hate, channels I don’t subscribe to…). So really I have some 60-ish HD channels out of the <1000 Comcast theoretically supplies me with enabled.

    I wish TiVo would give me an option to keep them from re-adding all the junk channels whenever Comcast messes around with their channel line-up actually…

  20. I know that article a couple of months back on “half the costs of cable” being sports was disputed, but I don’t recall where I read the article that took it apart.

    I wonder if there are any reasonable numbers on how many households watch the sports channels, would drop them if they could to save money, etc? Most of the articles I’ve seen just ramble on about “large numbers of households” and such without any stats or figures at all.

    I love that John Malone of all people thinks that government intervention is the only solution to this problem. Ha!

    I certainly agree that in the long run these sorts of fee increases (and others due to channel bundling) will eventually drive us to some kind of unbundling. But as others have said, as long as consumers aren’t abandoning cable in droves (or screaming for reform to their congressmen), nothing is going to happen.

  21. Live sports is the weak link in cutting the cord.

    Most scripted shows are already available a la carte via iTunes or Amazon video (e.g. I have “Walking Dead” pushed down to my Tivo for $2.84/episode, commercial-free)

    Broadcast shows are normally free via Hulu or on the company website with limited commercials.

    Frankly for $0/month I’m content with the college & pro sports I can see OTA.

  22. @Mari
    Yes DirecTV customers still don’t have Pac12 networks. It is a very frustrating process for many DirecTV subs becuase we want Pac 12 Networks but like the other channels offered by DirecTV in HD. Hopefully that is going to change soon as DirecTV has now “floated the idea” they will be adding a surcharge for those people that have more than 1 RSN in their area. If they include Pac12 as an RSN that would mean most markets covered would have 2-4 RSNs. I would pay the charge if I was told Pac12 networks were being added. In my Nor Cal market the only major w/out Pac12 is DirecTV. (Comcast, Suddenlink, Dish, Astound all carry it)

    As for the Comcast deal not adding the streaming app option for Pac12 networks, that has also been an issue. I was lucky enough that my sister shared her info with me so I could watch Pac12 games (Mostly Cal games). The frustrating part was the fact I had to use my laptop to stream the games since Comcast won’t authorize the app on iPads.

  23. Ironically, as expensive as ESPN is to MVPD’s, it is not a network highly criticized by the king of high programming cost critics, Charlie Ergen. Even the fiscally tight Ergen has stated that ESPN has a lot of high quality content and that player salaries and other have to be covered somehow when ESPN makes those massive winning bids for the content. The real frustrating sports programming costs, according to Ergen, are the RSN’s. While ESPN does have high ratings, the RSN’s are surprisingly slim by comparison. Ergen claims that Dish seriously considered not having RSN’s at all during the last round of negotiations. Comcast Lakers (now Lakers and Dodgers channel) is reported to have a cost to MVPD’s close to ESPN’s, and most of the air time is to be filled with Laker girl and player reality shows when there are no live games to air. However, even ESPN’s filler programming is pretty good, but they need much less of it than the RSN’s. OK, ESPN, TNT, and broadcast nets are the primary source for sports viewing for the vast majority of viewers, and we may have to accept them on our tiers and subsidize them justified by the high ratings, but RSN’s are mostly for the die-hards and we subsidize them for a far smaller audience. I think the RSN’s ought to be jettisoned and let OTT provide the RSN’s for whatever fee. Of course, that isn’t likely to happen, but while EVERY MVPD has ESPN for its broad appeal and high popularity, it is a few RSN’s here and there, such as DirecTV balking at adding PAC12 as one example, that MVPD’s seem willing to risk the wrath of it’s elite audience.

  24. Oops, I meant TWC Lakers/Dodgers channel.

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