Expansion Talk 2021

[Coloradojacket]

No offense to @RonJohn , one of the better posters on here whose opinion I hold in high regard, but none of us knows the ultimate plan here...but if you look at where everything is headed (one off "premium" subscribtions like HBO max, ESPN+, NBC Peacock Premium, etc), and the rumored schools that are being attached to the SEC (big name 'brands"), you can read the tea leaves.

At some point, the old revenue model makes zero sense because of the velocity at which "cord cutters" are leaving the old model. This move isn't about today or 5 years from now, it's about decades from now. This isn't just for the SEC, but ESPN as well...it's why the current business model is starting to lose money. This is why the SEC is has been ahead of everyone one else, outside of the B1G, at every turn. If the B1G doesn't think strategically, they could be in trouble as well.

There will come a day where the only way to watch Alabama versus LSU, or Texas versus OU, Clemson vs UGA...basically all of the Tier One matchups is through the premium SEC Network subscription. SEC network currently has 70 million subscribers. It cost $65 to get SEC Network through Hulu, $99 for NFL Game Pass. Do math on when the those 70 million subscribers (that's BEFORE Texas and OU...maybe Clemson/FSU/etc join) have to all pay $65-$100 to watch SEC games (football/basketball/baseball/etc.). You could see sports leave the networks altogether to go subscription platforms only. It would have been unheard of years ago, but now that's where almost everything that use to be on TV is going.

Exactly. Network TV will be gone in 7-10 years

 

[BurdellJacket]

I don't consider people who have Hulu Live TV, YoutubeTV, or Sling as cord cutters. Sure they don't have cable or sat, but they still pay for live channel packages, and the rates are slowly creeping up to sat/cable rates.

You might consider them (streamers) the same as cable watchers but I will garooonteeeee the cost is much less. My entire package of YouTubeTV, Netflix and Prime is about one-third what I was paying for cable which had much less good content.

 

[Techster]

I do agree that the future is not in media markets. However, the revenue that sports has been getting has been extremely heavily subsidized by people who do not watch sports and would not willingly pay $1 per month for sports. Those people have been providing somewhere between 60-70% of the subscription revenue.

Will you pay $40 to watch ND vs USC? Will you pay $10 to watch ND vs USC? The SEC is getting big names, but will people in California pay $40 to watch Texas vs Alabama? If they don't do ppv, but a college football subscription, are you willing to pay $40 or $60 per month for that? What if you have to sign a 12 month agreement in order to get it? That is probably the level of pricing ESPN would need to have the same level of revenue as traditional TV subscriptions. If they do charge that, how many individual houses are going to sign up? How many people are going to pool an account to split the subscription 4 or 5 ways? That would reduce the revenue that ESPN gets, and Disney might take steps to prevent it.

I am not trying to argue that the current market based business model will work forever. In fact, I have stated that it is falling apart. There are a few problems with replacing it. The first is the fact that sports have been subsidized by non-sports subscribers. The second is that college football is regional. I hardly ever watch Big10 games. I rarely watch Pac12 games. I might watch a G5 game once in a while if it is the only thing on. The SEC expansion looks huge, but do people in Washington state care? Do people in the Northeast? Do people in the Midwest? They might be interested, but are they willing to pay money?

The business model will change, but I don't think there is a clear picture on what it will change to. Many people have speculations, but nobody during the Betamax vs VHS format war would have even suggested that in 30 years the future of movies would be streaming thru a cable to your house on demand.

College football is regional...BUT, that's why the SEC is trying to poach the marquee names from around the country. You get the marquee names to join, then it becomes like the NFL/NBA/MLB all in one package. Even if it is regional, look at the numbers the SEC network subscription is pulling in. I've seen anywhere between 60-70 MILLION subscribers BEFORE Texas and OU (among others) join. Even at a low $50 (more likely north of $65 which is what it cost on HULU) pop for the year to get all the games, that's an astronomical number for a conference with 20-30 members.

Again, this is on another level most of us probably haven't even thought of yet, but on the face of it (that I outlined above) it's a pretty good reason why the SEC is being so aggressive...because the first conference to lock up all the marquee names will be the big winner.

 

[RonJohn]

No offense to @RonJohn , one of the better posters on here whose opinion I hold in high regard, but none of us knows the ultimate plan here...but if you look at where everything is headed (one off "premium" subscribtions like HBO max, ESPN+, NBC Peacock Premium, etc), and the rumored schools that are being attached to the SEC (big name 'brands"), you can read the tea leaves.

At some point, the old revenue model makes zero sense because of the velocity at which "cord cutters" are leaving the old model. This move isn't about today or 5 years from now, it's about decades from now. This isn't just for the SEC, but ESPN as well...it's why the current business model is starting to lose money. This is why the SEC is has been ahead of everyone one else, outside of the B1G, at every turn. If the B1G doesn't think strategically, they could be in trouble as well.

There will come a day where the only way to watch Alabama versus LSU, or Texas versus OU, Clemson vs UGA...basically all of the Tier One matchups is through the premium SEC Network subscription. SEC network currently has 70 million subscribers. It cost $65 to get SEC Network through Hulu, $99 for NFL Game Pass. Do math on when the those 70 million subscribers (that's BEFORE Texas and OU...maybe Clemson/FSU/etc join) have to all pay $65-$100 to watch SEC games (football/basketball/baseball/etc.). You could see sports leave the networks altogether to go subscription platforms only. It would have been unheard of years ago, but now that's where almost everything that use to be on TV is going.

I stated in a post a few minutes ago that I do agree that things are headed in that direction.

You are missing a few things you are missing in the 70 million subscribers at $65 minimum per month though. A large majority of people with TV subscriptions never, ever watch the SECN. A large majority of people with a TV subscription never even watch ESPN. (In the article I linked to they estimate 80 million ESPN subscribers and 50 million SECN subscribers). Just out of a hat, you might end up with 30 million people who want the ESPN content and 20 million who want the SEC content. The audience base is a lot smaller than 70 million. In addition, the $65 cost isn't what the average person pays for sports content. The average person actually doesn't want to pay for sports content. If you take the 30 million who do want sports content, many of those also are paying for the TV subscription so their wives can watch Lifetime Movies and the Oscars. So their kids can watch Nickelodeon and Cartoon Network. If those people have to pay $65 for the premium SEC Network, they will also have to pay extra for Lifetime and Cartoon Network.

If the solution was simple, someone would have already replaced the business model. ESPN built a house of cards. They forced TV providers to pay outrageous fees for their channels and force people who don't want the channel to pay for it. They paid outrageous fees for content to be able to strongarm the TV providers into those deals. The people with content are not willing to go backwards. They want more money for the content not less. Cord cutting is putting a serious strain on ESPN, because they can't use non-sports people to subsidize their content as easily. I have no inside information about it, but I think it is interesting that Comcast has up to this point basically turned away from the ACCN. I think every TV provider that has had their contract end with Fox/Sinclair/Bally's has flat out said they weren't willing to pay for it. ESPN's house of cards if falling in. I could see the SEC trying to totally separate from ESPN and just run their TV content themselves. Maybe this expansion is the SECs first step in separating from ESPN.

 

[Northeast Stinger]

You might consider them (streamers) the same as cable watchers but I will garooonteeeee the cost is much less. My entire package of YouTubeTV, Netflix and Prime is about one-third what I was paying for cable which had much less good content.

Same here.

 

[IM79]

Same here.

True here as well but YouTube TV still pays the ESPN fee for each subscriber. At some point, if they keep raising the fees per subscriber, they will price the people who don't watch sports out. These people will migrate to the providers that don't have the ESPN channels.

 

[BurdellJacket]

True here as well but YouTube TV still pays the ESPN fee for each subscriber. At some point, if they keep raising the fees per subscriber, they will price the people who don't watch sports out. These people will migrate to the providers that don't have the ESPN channels.

Correct, but as my streaming package goes up, so will cable, so I, who do watch sports, will still be netting a good savings.

 

[iceeater1969]

Perhaps i missed it but how is Vanderbilt still in the SEC super conference mix?

 

[roadkill]

You also get ESPN+ if you subscribe to Disney+. You don't get access to ESPN, ESPN2, SECN, ACCN, or ESPNU content with ESPN+. You do get access to some of those sports programs as replay, but you can't watch an ESPN live game with an ESPN+ subscription. Using those numbers, they can bring in about $1 billion for ESPN+. The estimates are that they bring in about $8 billion for the ESPN channel alone. Once you add in ESPN2, SECN, ACCN, ESPNU, etc. I have seen estimates that they bring in $14-$16 per subscriber. Much of that is spread across subscribers who do not watch and do not want ESPN. Just spitballing numbers, if the ESPN suite brings in $12 per subscriber with 80 million subscribers and only 30% actually want sports, they will have to charge $40 per streaming subscriber to have the same revenue. They would need to have that across 12 months, not just allow people to sign up when the sport they are interested in is starting and cancel when it is over.

ESPN charts streaming growth, but cable network still Disney's No. 1 sports star

Given ESPN's strong linear economics and rights transfer issues, Walt Disney CEO Bob Chapek said transitioning ESPN in the direct-to-consumer arena is

www.spglobal.com

They are working on things, but I have not seen anything that looks like it could replace their previous revenue. They were able to pull in much more revenue than their product was worth by leveraging the audience that they do have to hijack subscription fees from people who never wanted their content. It will be a struggle for them.

I was responding to comments about ESPN needing to change their business model and needing to respond to cord-cutters - but as you correctly stated (thanks), currently ESPN+ does not have the college football content to be a substitute for their standard linear TV service. I imagine that their existing provider contracts and/or desire to not cannibalize their linear product plays into that. But since they already have a launched streaming service, it seems like they already have the platform, should things continue to evolve in the direction they are currently headed.

 

[GTNavyNuke]

I stated in a post a few minutes ago that I do agree that things are headed in that direction.

You are missing a few things you are missing in the 70 million subscribers at $65 minimum per month though. A large majority of people with TV subscriptions never, ever watch the SECN. A large majority of people with a TV subscription never even watch ESPN. (In the article I linked to they estimate 80 million ESPN subscribers and 50 million SECN subscribers). Just out of a hat, you might end up with 30 million people who want the ESPN content and 20 million who want the SEC content. The audience base is a lot smaller than 70 million. In addition, the $65 cost isn't what the average person pays for sports content. The average person actually doesn't want to pay for sports content. If you take the 30 million who do want sports content, many of those also are paying for the TV subscription so their wives can watch Lifetime Movies and the Oscars. So their kids can watch Nickelodeon and Cartoon Network. If those people have to pay $65 for the premium SEC Network, they will also have to pay extra for Lifetime and Cartoon Network.

If the solution was simple, someone would have already replaced the business model. ESPN built a house of cards. They forced TV providers to pay outrageous fees for their channels and force people who don't want the channel to pay for it. They paid outrageous fees for content to be able to strongarm the TV providers into those deals. The people with content are not willing to go backwards. They want more money for the content not less. Cord cutting is putting a serious strain on ESPN, because they can't use non-sports people to subsidize their content as easily. I have no inside information about it, but I think it is interesting that Comcast has up to this point basically turned away from the ACCN. I think every TV provider that has had their contract end with Fox/Sinclair/Bally's has flat out said they weren't willing to pay for it. ESPN's house of cards if falling in. I could see the SEC trying to totally separate from ESPN and just run their TV content themselves. Maybe this expansion is the SECs first step in separating from ESPN.

Agree that cable is built on the PT Barnum idea of suckers. That platform will die fast with 5G and content anywhere. I pick up and drop content monthly based on what we are watching. No reason to pay for anything but good internet and the content of the season. Plus I share account info with my family and they do with me so we maximize the benefit. Since we watch stuff about 2 hours a day, there is no need for a lot of providers.

I'm posted in the baseball section about the important college sport. College football and men's basketball have been semi-pro for a long time. I have better things to do than watch college money ball sports when GT isn't playing.

 

[BurdellJacket]

While we are all arguing over ESPN and television content, has anyone noticed that Fox Sports has announced that it is official that Texas and Oklahoma will join the SEC as of 2025.

it would seem that either Bama or Auburn would shift to the Eastern division. Wouldn't the dwags just love it if it were to be Alabama joining them.

 

[GT05]

**** the SeC- that is all

 

[Northeast Stinger]

While we are all arguing over ESPN and television content, has anyone noticed that Fox Sports has announced that it is official that Texas and Oklahoma will join the SEC as of 2025.

it would seem that either Bama or Auburn would shift to the Eastern division. Wouldn't the dwags just love it if it were to be Alabama joining them.

Geographically Alabama is about 160 miles west of Auburn so it may be Auburn that goes to Eastern division. Dang it.

 

[randerto]

You might consider them (streamers) the same as cable watchers but I will garooonteeeee the cost is much less. My entire package of YouTubeTV, Netflix and Prime is about one-third what I was paying for cable which had much less good content.

I am a former Comcast cable customer currently using YouTubeTV. Currently considering going back to Comcast in order to watch Braves and Hawks games (RSN) but only if Comcast adds the ACCN so I can watch GT games like I currently can with YouTubeTV. Actually, the CURRENT cost of cable content is about the same as the current cost of YouTubeTV or HuluTV content. The primary cost differential between the two lies in the hardware rental fees cable providers charge and additional fees which simulate taxes. If Comcast streaming app was worth a darn, the cost differential is about a wash. And YouTubeTV does have a very good cloud DVR service which is much better than Comcast DVR service. Very frustrating when the streaming services all lost the RSN's...

 

[Jacket4Life]

Just with too AT&T TV Now. You will get all of that for less than Comcast.

 

[LawTalkin Jacket]

I am a former Comcast cable customer currently using YouTubeTV. Currently considering going back to Comcast in order to watch Braves and Hawks games (RSN) but only if Comcast adds the ACCN so I can watch GT games like I currently can with YouTubeTV. Actually, the CURRENT cost of cable content is about the same as the current cost of YouTubeTV or HuluTV content. The primary cost differential between the two lies in the hardware rental fees cable providers charge and additional fees which simulate taxes. If Comcast streaming app was worth a darn, the cost differential is about a wash. And YouTubeTV does have a very good cloud DVR service which is much better than Comcast DVR service. Very frustrating when the streaming services all lost the

 

[LawTalkin Jacket]

I am a former Comcast cable customer currently using YouTubeTV. Currently considering going back to Comcast in order to watch Braves and Hawks games (RSN) but only if Comcast adds the ACCN so I can watch GT games like I currently can with YouTubeTV. Actually, the CURRENT cost of cable content is about the same as the current cost of YouTubeTV or HuluTV content. The primary cost differential between the two lies in the hardware rental fees cable providers charge and additional fees which simulate taxes. If Comcast streaming app was worth a darn, the cost differential is about a wash. And YouTubeTV does have a very good cloud DVR service which is much better than Comcast DVR service. Very frustrating when the streaming services all lost the RSN's...

Don’t go to Comcast
Try Uzzu for Braves

 

[Oldgoldandwhite]

I can’t imagine LSU, A&M, And the two Mississippis letting them add Texas, Oklahoma, and keeping Alabama in the same division.

 

[RamblinRed]

Dennis Dodd article suggesting that the SEC's moves may kill any expansion of the playoffs in the short term. Alot of administrators unhappy with the SEC move -especially when they were one of the voices advocating for expansion of the CFP and that other conferences are unlikely to expand the playoffs just so the SEC can get a bunch more teams into it.

Pac-12 commish leads voices suggesting College Football Playoff expansion be paused amid SEC additions

With Texas and Oklahoma further strengthening the SEC, playoff expansion may be reconsidered

www.cbssports.com

 

[yjack]

I can’t imagine LSU, A&M, And the two Mississippis letting them add Texas, Oklahoma, and keeping Alabama in the same division.

Think 4-team pod structure and rotate opponents.