Dienhart: Big Ten's big, bold move East

[itgoeslike]

That's where we're headed, eventually. Cable TV rates are too high compared to other carriers like wireless telecomm, dish and broadband Internet. People will simply mirror the app feed to their large screens. That's what I already do today when I can't get a soccer match on TV, I get it online and watch in my living room.

My point is that if Delany thinks he's going to get an extra $20M a year from cable TV for the BTN, he's smoking crack. I've watched BTN, had it for a few years. Its production values are poor and the product is kind of boring, but money can fix some of those things.

You're confusing cable companies with content owners/licensees (although some would like to be both). It's no accident you get some content for free (until you don't). Most content owners see the potential for added profit. When and how it transitions, popular content will still generate a good return. With regard to the BTN, I am going to be lazy and reiterate a response a gave to you in another thread. . .

"Under the scenario you describe the Big Ten and/or BTN could actually thrive. Content owners/licensees stand to profit the most. In many respects this is why Netflix and other are investing in developing or acquiring content. The Big Ten stands to benefit the most because of its alumni base. National following aside, Michigan and Ohio State have a million living alumni between them. The conference as a whole probably has close to 10 million alumni. Throw in local populations and national fans and that number grows substantially. It's the small privates without a national following that will suffer most."

 

[IthacaMatt]

You're confusing cable companies with content owners/licensees (although some would like to be both). It's no accident you get some content for free (until you don't). Most content owners see the potential for added profit. When and how it transitions, popular content will still generate a good return. With regard to the BTN, I am going to be lazy and reiterate a response a gave to you in another thread. . .
"

Customers will only pay for content up to a certain point. Portability of viewing across devices works against them getting you to pay for the same product multiple times.

For instance, we have Verizon FIOS, and I use that subscription to get my HBO and Showtime on demand on tablet, phone, home computer hooked to TV screen, etc.

If I eventually cut the cable for TV programming, of course I will still buy Internet and wireless access like I do now, and the $100+/month I'm paying just for television will go down. Amazon Instant has most of the top TV series, as well as a great movie catalog. That costs me $79 (soon $99) per year, or still only $8 a month. I won't have to pay $15-20 a month to rent VCR machines in each room. I won't have to pay all these BS taxes and surcharges. That leaves me plenty of room financially to pay to watch HBO, Showtime and ESPN ala carte and still be way ahead of the game.

I am not a unique case. Many people are far more tech savvy than me. Delany is hoping we will pay for content twice. I don't see that happening, long term. It may as we transition, and people are willing to pay a surcharge for convenience. But long term, there's not enough value in the bundled cable TV proposition for it to continue to grow and generate more revenues.

We're approaching the limit. That's why this net neutrality fight is taking place. Cable TV operators see themselves as losing their gatekeeping status if they don't rig the laws against streaming online content, and they feel compelled to do it now.

 

[itgoeslike]

Customers will only pay for content up to a certain point. Portability of viewing across devices works against them getting you to pay for the same product multiple times.

For instance, we have Verizon FIOS, and I use that subscription to get my HBO and Showtime on demand on tablet, phone, home computer hooked to TV screen, etc.

If I eventually cut the cable for TV programming, of course I will still buy Internet and wireless access like I do now, and the $100+/month I'm paying just for television will go down. Amazon Instant has most of the top TV series, as well as a great movie catalog. That costs me $79 (soon $99) per year, or still only $8 a month. I won't have to pay $15-20 a month to rent VCR machines in each room. I won't have to pay all these BS taxes and surcharges. That leaves me plenty of room financially to pay to watch HBO, Showtime and ESPN ala carte and still be way ahead of the game.

I am not a unique case. Many people are far more tech savvy than me. Delany is hoping we will pay for content twice. I don't see that happening, long term. It may as we transition, and people are willing to pay a surcharge for convenience. But long term, there's not enough value in the bundled cable TV proposition for it to continue to grow and generate more revenues.

We're approaching the limit. That's why this net neutrality fight is taking place. Cable TV operators see themselves as losing their gatekeeping status if they don't rig the laws against streaming online content, and they feel compelled to do it now.

There's money lined up on all sides of this issue. You're right in that things are going to change, whether it's by technology or old fashioned payola. The one constant in your HBO example is the content itself, which is why I think coveted content and live programming will still be valuable, especially when you flatten the distribution channel. These providers will figure out a way to monetize the content over multiple platforms and devices. You might even get your bundled (and a la carte) programming from Google, Facebook or Apple. With regard to cutting ties to the cable company, in many markets the cable guy and broadband guy is one and the same, but it's definitely going to be more fragmented moving forward. Just like cellular displaced the landline phone, its possible down the road a high speed wireless solution coupled with compression technology could displace some of cable guys (although not without a fight). There's still some, including Google, that are still playing around with fiber optics and maybe the cable guys buy/invest in new platforms (some are). Politics, greed, infrastructure and technology are all impediments to progress, but it will eventually happen.

 

[bobbyinaz]

Customers will only pay for content up to a certain point. Portability of viewing across devices works against them getting you to pay for the same product multiple times.

For instance, we have Verizon FIOS, and I use that subscription to get my HBO and Showtime on demand on tablet, phone, home computer hooked to TV screen, etc.

If I eventually cut the cable for TV programming, of course I will still buy Internet and wireless access like I do now, and the $100+/month I'm paying just for television will go down. Amazon Instant has most of the top TV series, as well as a great movie catalog. That costs me $79 (soon $99) per year, or still only $8 a month. I won't have to pay $15-20 a month to rent VCR machines in each room. I won't have to pay all these BS taxes and surcharges. That leaves me plenty of room financially to pay to watch HBO, Showtime and ESPN ala carte and still be way ahead of the game.

I am not a unique case. Many people are far more tech savvy than me. Delany is hoping we will pay for content twice. I don't see that happening, long term. It may as we transition, and people are willing to pay a surcharge for convenience. But long term, there's not enough value in the bundled cable TV proposition for it to continue to grow and generate more revenues.

We're approaching the limit. That's why this net neutrality fight is taking place. Cable TV operators see themselves as losing their gatekeeping status if they don't rig the laws against streaming online content, and they feel compelled to do it now.

In an ala carte world Amazon Instant will not be $99 because the content that they have to acquire will become significantly more expensive plus, you will not be able to "buy" ESPN for a couple bucks a month. As one of the sole providers of live sporting broadcasts they would be able to charge (and get in many cases) $25-$30 or more per month.

All of the "wait til you can buy things ala carte" prognosticators base their math on today's bundled costs where as in an ala carte world fees will go up significantly.

The owners of the programming will get their money either way

 

[huskypantz]

In an ala carte world Amazon Instant will not be $99 because the content that they have to acquire will become significantly more expensive plus, you will not be able to "buy" ESPN for a couple bucks a month. As one of the sole providers of live sporting broadcasts they would be able to charge (and get in many cases) $25-$30 or more per month.

All of the "wait til you can buy things ala carte" prognosticators base their math on today's bundled costs where as in an ala carte world fees will go up significantly.

The owners of the programming will get their money either way

This. I know there are folks who only watch 6 or 7 channels and going from 200 to 7 looks great in math-speak, but in reality either you are going to pay or your neighbor is.

Price of ESPN in UK? 9-12 pounds per month, or $15-20 USD. Sure, you can stream it a la carte without a cable deal, but you're going to tack that price onto your internet monthly bill. Better pray you're not like me, wife watches Bravo etc, kids watch Disney/Nick Jr. I pay less than $100 a month for fios internet/cable - a couple hundred HD channels, ESPN3, 2 HD boxes, DVR. A la carte will double my bill.

 

[upstater]

This. I know there are folks who only watch 6 or 7 channels and going from 200 to 7 looks great in math-speak, but in reality either you are going to pay or your neighbor is.

Price of ESPN in UK? 9-12 pounds per month, or $15-20 USD. Sure, you can stream it a la carte without a cable deal, but you're going to tack that price onto your internet monthly bill. Better pray you're not like me, wife watches Bravo etc, kids watch Disney/Nick Jr. I pay less than $100 a month for fios internet/cable - a couple hundred HD channels, ESPN3, 2 HD boxes, DVR. A la carte will double my bill.

Ala carte would only work for some families. Like mine. ESPN is the only thing I watch. Wife watches AMC. My kids don't watch at all. They are stuck on Netflix ($8 a month). We didn't have cable for the longest time, until last summer. Then we got it because I had my internet and landline rates jacked up and the TV package was reasonable. I introduced my children to it, but they don't understand the concept. "Wait, you mean we don't get to choose what to watch? We just have to wait to see what they put on? And there are constant interruptions with commercials?" That's their attitude. They think cable is the worst invention known to man.We also have Amazon, a Roku, an AppleTV with fave movies already in the cloud. My youngest has watched Frozen 13 times in the last 3 months.

 

[tzznandrew]

Ala carte would only work for some families. Like mine. ESPN is the only thing I watch. Wife watches AMC. My kids don't watch at all. They are stuck on Netflix ($8 a month). We didn't have cable for the longest time, until last summer. Then we got it because I had my internet and landline rates jacked up and the TV package was reasonable. I introduced my children to it, but they don't understand the concept. "Wait, you mean we don't get to choose what to watch? We just have to wait to see what they put on? And there are constant interruptions with commercials?" That's their attitude. They think cable is the worst invention known to man.We also have Amazon, a Roku, an AppleTV with fave movies already in the cloud. My youngest has watched Frozen 13 times in the last 3 months.

Right. But the point is that something like Netflix or Amazon Prime will either go out of business, or have to charge a lot more, in a world without cable.

 

[bobbyinaz]

Right. But the point is that something like Netflix or Amazon Prime will either go out of business, or have to charge a lot more, in a world without cable.

That's my point exactly. In an ala carte world the only way for the owners of programming to make their money is to jack up their fees significantly.

There will be no such thing as Netflix for $8 per month anymore. Might some households get away with reducing their costs? Of course, but, the reality is that in order to get at a minimum what is being watched now the costs will be the came or higher

 

[upstater]

That's my point exactly. In an ala carte world the only way for the owners of programming to make their money is to jack up their fees significantly.

There will be no such thing as Netflix for $8 per month anymore. Might some households get away with reducing their costs? Of course, but, the reality is that in order to get at a minimum what is being watched now the costs will be the came or higher

The part that confuses me is that Netflix originates very little programming. They piggyback on the cable lines and ay a premium for the ability to do so. so how would ala carte impact them?

 

[dayooper]

The part that confuses me is that Netflix originates very little programming. They piggyback on the cable lines and ay a premium for the ability to do so. so how would ala carte impact them?

They would have to pay more for the syndication of the shows. If AMC isn't making the money from subscription rates, they need to find a way to make up for that. They charge Netflix more for their shows and that cost is passed on to us consumers. Then you get into the whole bandwidth issue. Comcast already has a cap on their free data usage. Right now, it's very manageable (we have cut the cord and have never come close), but that may not be that way in the future. They may require us to pay per gig used of cap it at a fairly low rate and have to pay very high fees if we go over.

 

[upstater]

They would have to pay more for the syndication of the shows. If AMC isn't making the money from subscription rates, they need to find a way to make up for that. They charge Netflix more for their shows and that cost is passed on to us consumers. Then you get into the whole bandwidth issue. Comcast already has a cap on their free data usage. Right now, it's very manageable (we have cut the cord and have never come close), but that may not be that way in the future. They may require us to pay per gig used of cap it at a fairly low rate and have to pay very high fees if we go over.

It may be that AMC's only mode of survival is Netflix. It will be interesting to see what happens.

 

[Sportsman5]

That making the assumption that live sports programming will be available online and that it will be the price of something like Netflix or hulu. If the ala carte model of TV happens, the average sports viewer will probably see an increase in price to watch their teams. The sports fan will no longer have the bravo fan sharing the cost of espn, sny, etc.

The B1G would not be the only conference affected by that as the whole model these conference TV deals and the networks that pay them are based on would crumble.

The pricing won't necessarily be much cheaper, but it will help UConn out immensely as there are a lot of well off UConn fans and diehard UConn fans willing to pay for premium programing. MANY schools can not say that. Especially since UConn has multiple programs that people will pay money to watch. Most schools are lucky to have one.

 

[itgoeslike]

It will all rebalance–eventually. In the short term, heavy users across multiple platforms will pay a premium for convenience (and redundancies). But when everything becomes more standardized, it will balance out for most people. Light and limited users will benefit while some with extensive and diverse tastes may not. However some of the pay for play channels will likely offer bundles. In some respects change will kind of be like pushing on a balloon. Cable operators that lose money on cable will recover some of it on the broadband side. Content owners that get less for cable will make it up on other conduits as they emerge. But, I think all in all, most consumers will benefit from the flattening of distribution (and greater competition) with regard to cost as it relates to relevant content. Look at books and music—do you pay more or less for the content you want today than you did 15 years ago?

 

[huskypantz]

Ala carte would only work for some families. Like mine. ESPN is the only thing I watch. Wife watches AMC. My kids don't watch at all. They are stuck on Netflix ($8 a month). We didn't have cable for the longest time, until last summer. Then we got it because I had my internet and landline rates jacked up and the TV package was reasonable. I introduced my children to it, but they don't understand the concept. "Wait, you mean we don't get to choose what to watch? We just have to wait to see what they put on? And there are constant interruptions with commercials?" That's their attitude. They think cable is the worst invention known to man.We also have Amazon, a Roku, an AppleTV with fave movies already in the cloud. My youngest has watched Frozen 13 times in the last 3 months.

I think you can get around a lot of that with a DVR or VOD(watch what you want, when you want and skip commercials). I am probably the last person left without netflix, but at this stage my wife and I don't get 90-120 minutes alone to watch a movie more than once or twice a month.

 

[upstater]

I think you can get around a lot of that with a DVR or VOD(watch what you want, when you want and skip commercials). I am probably the last person left without netflix, but at this stage my wife and I don't get 90-120 minutes alone to watch a movie more than once or twice a month.

I think Netflix's base in the US is only 30-35 million. That's going from memory. So they only have 30% of the market.