For Sports Networks, You Gotta Pay to Play


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By Alex Sherman on April 05, 2012 Bloomberg Businessweek

With baseball’s Opening Day come the annual rites of spring: hot dogs, Cracker Jack, and rising cable bills. The insatiable demand for sports has long fed the pay-TV ecosystem, largely because the fees to show all those games are easily passed on to consumers. But this season, pay-TV outfits are struggling to figure out how they can absorb the surging cost of sports programming without alienating customers.
Cable and satellite-TV executives worry that sports programming has become such a lopsided component of basic-cable packages that non-fans may be tempted to drop their subscriptions and make do with Netflix (NFLX), Hulu, and other Web-based entertainment options. Convergence Consulting Group says 1.05 million Americans dropped their pay-TV subscriptions to rely solely on online video in 2011. But attempts to segregate sports channels into premium packages that cost more have hit roadblocks.

A typical cable system pays Walt Disney’s (DIS)ESPN, the most expensive cable channel, $5.06 per subscriber per month, says researcher SNL Kagan. Add to that fees paid to the 50-odd regional sports networks (RSNs) that hold the rights to carry more localized events, everything from the National Basketball Association’s Los Angeles Lakers to Big Ten collegiate sports. On average, the cost of an RSN surged 52 percent in the past five years, to $2.49 per user per month, Kagan estimates. That’s more than four times what Comcast’s (CMCSA)USA, cable’s most-watched network, will charge pay-TV operators monthly in 2012 and more than double the price of No. 2 Disney Channel.

RSNs will raise fees by 8.3 percent this year, Kagan estimates. But the TV portion of a typical cable bill rose only 4.4 percent in 2011, estimates Sanford C. Bernstein (AB). Markets including Boston, New York, and Washington have two or more regional sports channels, multiplying the cost to cable systems and stoking competition for content.
Read More: For Sports Networks, You Gotta Pay to Play - Businessweek

I'm a football fan. I'm not a fan of other sports. Most NFL, and lots of college football is on free OTA TV. On the other hand, if your a local NBA or NHL fan your pretty much stuck with cable. But, you need to understand that your cable bill is a direct reflection of your sports addiction. Gotta pay to play!!!


Here is a not so nice truth. The cable tv subscribers that are not interested in sports are forced to subsidise the sports likers. Cable tv packages are often set up so those that are not interested in sports must take the sports package to get the channels they are interested in. And/or are charged more for the non sports channels to subsidies the sports likers. Here is a truth , most people are not interested in sports and do not follow sports. However sports likers think that every one is interested in sports except for 3 strange people in all of the world , one is in the USA , the second is in Canada , and the third is in South America somewhere.
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My wife and I love golf. The Golf Channel is probably the one channel we miss the most since going OTA a year ago. Wife especially misses having LPGA coverage. If Golf Channel offered a streaming package like MLB or NFL I'd gladly pay $10-$15/month for it. I came close to signing up for MLB's online package but couldn't figure out if Red Sox games broadcast on the other team's TV network would be subject to the blackout their NewEnglandSportsNetwork games are.



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I think the average person likes something, be it gymnastics, figure skating, football, volleyball, baseball, or Olympics. They may not be sports enthusiasts though. My thing these days is NASCAR so I pretty much just care about the Speed Channel and ESPN for a limited number of weeks when they carry the races. NASCAR makes it particularly difficult because its Sprint Cup races are divided upon three channels -- ABC for the beginning of the season, TNT for the summer months, and then ESPN to finish it off.


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I came close to signing up for MLB's online package but couldn't figure out if Red Sox games broadcast on the other team's TV network would be subject to the blackout their NewEnglandSportsNetwork games are.
The answer is yes. The local team's games are going to be blacked out... They are trying to protect their local network/provider. MLB.TV also doesn't show advertising. More on this later over at Internet TV Forums.

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