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Expansion Talk 2021
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<blockquote data-quote="RonJohn" data-source="post: 813513" data-attributes="member: 2426"><p>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.</p><p></p><p>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.</p><p></p><p>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?</p><p></p><p>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.</p></blockquote><p></p>
[QUOTE="RonJohn, post: 813513, member: 2426"] 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. [/QUOTE]
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