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ACC AD Meetings - New Revenue Distribution Model?
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<blockquote data-quote="RonJohn" data-source="post: 947636" data-attributes="member: 2426"><p>ESPN's revenue is still more reliant on subscriber fees than it is advertisement. Having more viewers for a Saturday night broadcast, which raises ad rates, is a small amount of the ad revenue, which in total is smaller than subscriber fees. I am not saying that more viewers equals zero additional revenue, however I am saying that more viewers is less than pennies on the dollar compared to overall revenue.</p><p></p><p>ESPN has played games with cable/sat/internet distribution companies. There are not infinite SEC fans in the Southeast, but there are a large number of rabid SEC fans in the Southeast. They are able to charge very high fees for ESPN and for the SEC network because distributors know that some percentage of their subscribers will leave if those channels are not on the service. Fans in North Dakota are not rabid SEC fans, and the SEC doesn't have the same influence in the rest of the country.</p><p></p><p>The ACC didn't push for a network when the SEC and Big10 did, and then submitted to the whims of ESPN in order to try to catch up. The biggest problem that I see, is that they paid a huge price to catch up to where the SEC and Big10 were at that time. It would be like signing a 10 year salary contract in order to match the current salary of a coworker whose contract expires in a couple of years.</p><p></p><p>If the ACC wants to get more money, they need to come up with other revenue streams than broadcast media rights. It will be impossible to catch up to the SEC and Big10 trying to copy the way they are doing it (As you said), especially since there are still 13 years left on the media contract. If the ACC wants to catch up, they need to get ahead in other areas.</p></blockquote><p></p>
[QUOTE="RonJohn, post: 947636, member: 2426"] ESPN's revenue is still more reliant on subscriber fees than it is advertisement. Having more viewers for a Saturday night broadcast, which raises ad rates, is a small amount of the ad revenue, which in total is smaller than subscriber fees. I am not saying that more viewers equals zero additional revenue, however I am saying that more viewers is less than pennies on the dollar compared to overall revenue. ESPN has played games with cable/sat/internet distribution companies. There are not infinite SEC fans in the Southeast, but there are a large number of rabid SEC fans in the Southeast. They are able to charge very high fees for ESPN and for the SEC network because distributors know that some percentage of their subscribers will leave if those channels are not on the service. Fans in North Dakota are not rabid SEC fans, and the SEC doesn't have the same influence in the rest of the country. The ACC didn't push for a network when the SEC and Big10 did, and then submitted to the whims of ESPN in order to try to catch up. The biggest problem that I see, is that they paid a huge price to catch up to where the SEC and Big10 were at that time. It would be like signing a 10 year salary contract in order to match the current salary of a coworker whose contract expires in a couple of years. If the ACC wants to get more money, they need to come up with other revenue streams than broadcast media rights. It will be impossible to catch up to the SEC and Big10 trying to copy the way they are doing it (As you said), especially since there are still 13 years left on the media contract. If the ACC wants to catch up, they need to get ahead in other areas. [/QUOTE]
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