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If ESPN Goes Direct to Streaming, Prepare Your Wallets

The more we move to streaming… the closer we get to a direct to consumer a la carte model. I’m not certain it will be the financial freedom some anticipate it will be.

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Streaming

When given the opportunity in a restaurant, I rarely order a la carte. I mean, the people in the kitchen do this every day, right? They have to know what sides best compliment my main entrée. I type this as if I hit high end five-star joints more than the Chick-fil-a drive-thru. The idea of a la carte TV has always been one that is presented as giving the consumer the ultimate decision making upper hand. Problem, is, nobody does the math.

The pesky math tells you the a la carte menu is very much separate from the value menu. This is why cable and satellite conglomerates have thrived over the years, they have the ability to make you pay for the crap you don’t want in order to keep down the prices for the crap you do want.

I’m the biggest sucker there is when it comes to this. I’ll look at the menu of package choices and have a conversation in my brain that goes something like this: “Wait, am I really willing to live without Bravo Spanish – West Coast? Well, I’m not sure I’ve ever watched the English language Bravo and my knowledge of Spanish is limited to menu items in a Mexican restaurant but one can never be too careful. Sign me up for the Elite Triple Diamond Platinum Package.”

If I had to find the actual Bravo on my DIRECTV channel lineup right now in order to guarantee a Dolphins Super Bowl victory, I’d have no idea where to start. Since my Dolphins fandom is involved in this absurd scenario, I’d probably get lucky enough to find Bravo then rain fade would prevent me from actually watching that Super Bowl.

As hard as it might be to believe, there are people in this world that feel about the sports channels the same way I feel about Bravo. They would have no idea where to find them but are paying the same freight we pay for those sports channels. The big difference is we pay pennies not to watch theirs, they pay a lot not to watch ours.

The exact amount each viewer pays for ESPN, the top model in this discussion, is not publicly known. However, S&P Global Marketing Intelligence estimates that number is $8.72 per subscriber, per month. That’s about as good an entertainment value as I can find. If you multiply that number by the roughly 87 million ESPN subscribers, that means the sports network pulls down around $9 billion per year in subscriber fees.

Just assume a third of those 87 million subscribers would pay for ESPN on an a la carte basis, congrats, your new annual total is $300 and you have one channel. Make no mistake, I get $300 of usage out of my ESPN subscription but my wife also enjoys watching people take old houses and make them new again. Chip and Jojo aren’t going to be free, either. You can see how quickly this adds up.

Speculation on this topic has been so strong that ESPN President Jimmy Pitaro had to squash rumors that the sports giant was greasing the skids to move to a direct to consumer model. That speculation grew when ESPN announced an ESPN+ price hike to $9.99 a month. That’s significant growth when you consider you could buy the same product for $3.99 per month just four years ago.

ESPN+ now has more than 22 million subscribers, roughly a quarter the number of subscribers to the traditional ESPN network. There has to be considerable overlap in those subscriber groups but the math is the math. That means ESPN could be adding an additional $2.2 billion in subscriber fees to the $9 billion they pull in on cable and satellite. What would Disney need to charge monthly on an a la carte basis to equal $9-$11 billion in subscriber fees? 

It doesn’t seem crazy to pay $300 – $350 annually for ESPN but it is a huge chunk to start out with when it is the first network you select and you realize there are a dozen more you can’t live without. In fact, that same S&P Global Market Intelligence estimate shows you pay roughly $23.00 a month for the 13 most expensive sports networks. If that number simply tripled, just as my ESPN estimate did, that’s $850-$1000 annually on just sports.

The more we move to streaming and, seemingly, everyone has a streaming platform that is the network’s name with a plus sign next to it, the closer we get to a direct to consumer a la carte model. I’m not certain it will be the financial freedom some anticipate it will be.

What we may discover is a la carte only makes financial sense when I want a taco and burrito but no rice and beans.

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BSM Writers

Your Football Conversation Has To Be Different

I don’t know why any host would go with B- or C-material just for the sake of providing variety. That’s silly to me.

Brian Noe

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Radio

Rejoice! Ball is back, baby. Life is just better when football season is included; am I right? (That was a rhetorical question because I know I’m right in this case.) Like many people in this country, I’m all about the pigskin. Outside of my family and friends, there aren’t many things in life that I love more than BALL.

With all of that being established, a simple question still exists: is there such a thing as talking too much football on a sports radio show?

I think it isn’t as much what you’re talking about; it’s how you’re talking about it. For instance, it isn’t good enough to lazily say, “Ehh, we’ll start off by talking about the game last night.” Well, how are you going to talk about it? Do you have anything original, interesting or entertaining to say? Or are you just gonna start riffing like you’re in a jam band hoping to accidentally stumble onto something cool after six minutes of nothing?

Talking about football is like opening a new burger joint. Hang with me on this one. There are so many options — Burger King, McDonald’s, Five Guys, Wendy’s, In-N-Out, etc. — that you can’t expect to have great success if you open a run-of-the-mill burger joint of your own. Having an inferior product is going to produce an inferior result.

It comes down to whether a topic or angle will cause the show to stand out or blend in. Going knee-deep on a national show about the competition at left guard between two Buffalo Bills offensive lineman doesn’t stand out. You’ll get lost in the shuffle that way.

A show needs to constantly be entertaining and engaging. One way to check that box is with unique viewpoints. Don’t say what other shows are saying. Your burger joint (aka football conversation) needs to be different than the competition. Otherwise, why are you special?

Another way to stand out is with personality. It’s impossible to have unique angles with every single topic that’s presented. A lot of hosts recently pointed out that the Dallas Cowboys committed 17 penalties in their first preseason game against the Denver Broncos. But Stephen A. Smith said it differently than everybody else. That’s what it comes down to; either say things that other shows aren’t saying, or say them differently.

New York Jets head coach Robert Saleh made a comment recently that too much of anything is a bad thing. So back to the original question, is there such a thing as too much football talk on a sports radio show?

Variety is the spice of life, but quality is the spice of sports radio. If a show provides quality, listeners will keep coming back. It’s really that simple. Sure, hosts will hear “talk more this, talk more that” from time to time, but you know what’s funny about that? It means the listeners haven’t left. The show is providing enough quality for them to stick around. If the quality goes away, so will the audience.

It’s smart for hosts and programmers to think, “What’s our strongest stuff?” If that happens to be a bunch of football topics, great, roll with it. I don’t know why any host would go with B- or C-material just for the sake of providing variety. That’s silly to me.

Former NFL quarterback Michael Vick said something interesting last week while visiting Atlanta’s training camp. Vick was asked which team’s offense he’d like to run if he was still playing today. “The offense Tom Brady is running in Tampa,” Vick said. “Pass first.”

The answer stood out to me because throwing the ball isn’t what made Vick special with the Falcons. He was a decent passer and a dynamic runner. The run/pass blend made Vick a problem. I totally understand wanting to prove doubters wrong, but there are a lot of athletes that get away from what they do best while relying on something else that isn’t their specialty.

Los Angeles Lakers guard Russell Westbrook is not an outside shooter. He’s brutal in that area. Yet Russ will keep firing threes at a 30% clip. Why? Attacking the rim and working the midrange is his game. You don’t see Phoenix Suns guard Chris Paul bombing threes if they aren’t going in. He kills opponents with his midrange skills all day.

It’ll be interesting to see how Miami Dolphins quarterback Tua Tagovailoa approaches this season. He’s received a steady diet of “can’t throw the deep ball.” Will he try to a fault to prove doubters wrong, or will he rely on what he does best? Beating defenders with timing and accuracy on shorter throws is where he finds the most success.

Working to improve your weaknesses makes sense, but it shouldn’t come at the expense of going away from your strengths. How is it any different in sports radio? If a host isn’t strong when it comes to talking basketball or baseball, it definitely makes sense to improve in those areas. But if that same host stands out by talking football, at some point it becomes like Westbrook jacking up threes if the host gets too far away from a bread-and-butter strength.

Former New York Yankees closer Mariano Rivera is the only player in the Baseball Hall of Fame that was unanimously elected. He relied on his cutter — a fastball that moved, a lot — about 85% of the time. Mo didn’t say, “Man, my four-seam fastball and changeup aren’t getting enough respect.” He rode that cutter all the way to Cooperstown and legendary status.

Rivera is a great example of how playing to your strengths is the best approach. He also shows that quality trumps variety every time. Let’s put it this way: if 85% of a sports radio show is football content, and the quality of that show is anywhere near Mo caliber, it’s destined to be a hit.

One of my buddies, Mike Zanchelli, has always been a hit with the ladies. I think he came out of the womb with at least 10 girls in the nursery showing interest in him. He had a simple dating philosophy: “Always. Leave them. Wanting. More.” That might work in dating, but I think it’s the opposite in sports radio. Most listeners don’t hear the entire show. If they’re in and out, wouldn’t you want them to hear your best stuff when they are tuned in?

That’s why I say screw variety. That’s why I wouldn’t worry about overserving your audience an all-you-can-eat BALL buffet. I think it’s much wiser to focus on producing a quality product regardless if it’s well rounded or not.

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BSM Writers

ESPN Has Gone From Playing Checkers to Chess In Two Years

Those decisions make the future ones with the Pac-12, the Big 12, NBA and UFC fascinating to watch but what’s clear is that this ESPN strategy is different.

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In the days after the Big Ten news leaked regarding some of the details of their upcoming media deals, I was hankering for more information. I wanted more insight as to the “why”. Why did the Big Ten leave such a long-lasting and prosperous relationship with ESPN. I just couldn’t imagine it and it’s why I wrote about it last week.

It was in that pursuit of knowledge that I tuned into a podcast favorite of mine, The Marchand and Ourand Sports Media Podcast. The show’s hosts are deep into the weeds of sports media with John Ourand at the Sports Business Journal and Andrew Marchand at the New York Post. It was Ourand who was dropping dimes of news on the Big Ten deal last week. I wanted to hear him dive deeper, and he did on the podcast. But it was a throwaway line that got my wheels churning.

“This is about the third or fourth deal in a row that ESPN, the free-spending ESPN, to me has shown some financial discipline” Ourand said. “They are showing a bit of financial discipline that I hadn’t seen certainly when John Skipper was there and pre-dating John Skipper.”

I had to keep digging and folks, it’s true. ESPN is essentially Jimmy Pitaro in the above quote, the Chairman of ESPN. Since taking the role in 2018, he was put into an interesting position of being in the middle of a lot of big money media rights deals that would be coming due for renegotiation soon. The rights fees for EVERYTHING were going to balloon wildly. But in the last two years, he has comfortably kept the astronomical rates somewhat within shouting distance.

The big one, the NFL media rights deal agreed to last March, saw ESPN pay a very strong 30% increase for the rights. However, other networks involved had to pay “double” as Ourand so succinctly put it. He also personally negotiated with FOX to bring in Troy Aikman and Joe Buck to make their Monday Night Football booth easily more recognizable and the best in the sport. ESPN in that deal, that did NOT include doubled rates, got more games, better games, and more schedule flexibility. ABC gets two Super Bowls in the deal too. Simply put, Jimmy Pitaro set up ESPN to get a Super Bowl itself, but for now his network will take full advantage of the ABC network broadcast when the time comes (2026, 2030).

The recent Big Ten deal was massive because the conference spent forty years with ESPN and decided to reward that loyalty with a massively overpriced mid-tier package. ESPN balked at the idea. In their back pocket lies a lot of college football media rights deals with a lot of conferences including one that will be a massively profitable venture, the SEC package. ESPN takes over the CBS package of the “top” conference game. Yes, it paid $3 billion for it, but it’s a scant $300 million annually. Sure, that’s over 5X what CBS was paying annually but CBS signed that deal in 1996! I need not tell you all of the advancements in our world since Bob Dole was a presidential nominee. ESPN now gets to cherry-pick the best game from the best conference and put the game anywhere they damn well please to maximize exposure.

The F1 media rights extension is massive because of two things: one, they got it cheap before the sport littered your timeline on weekend mornings and two, when they re-signed with F1 this summer they paid way less than other streaming networks were reportedly willing to pay. The brand, the savvy worked again. ESPN takes a small risk for a potentially exploding sport and much like CBS did with the SEC for 25 years, can make massive margins.

I can keep going, and I will with one more. Sports betting. The niche is growing like my lawn minutes after the summer rainstorm. Pitaro has said publicly that sports betting “has become a must-have” and he’s full-frontal correct. ESPN is in an odd spot with their clear lineage to Disney, but it’s obvious something massive is going to come soon with ESPN reportedly looking for a deal in the $3 billion neighborhood.

Pitaro has been positioning this company from a position of strength. He pays big money for big properties, but knows when he’s getting taken advantage of and most importantly, isn’t afraid to pull his brand’s name out of the deep end.

ESPN may have an issue with dwindling subscribers, but that’s an everyone problem. The difference is ESPN is constantly trying to get you from one network ship you think is sinking into another network life raft. If you want to leave cable or satellite and go streaming, you can. ESPN+ is there to pick up the pieces. Or Sling (with an ESPN bundle). Or YouTube TV (ESPN is there too). Or a myriad of other ways. They are positioned so well right now to be where you think you want to go. Jimmy Pitaro and ESPN have been amazing at doing whatever they can to keep you paying them monthly.

The network has been aggressive with media rights deals but these newer ones have been diligently maneuvered by Pitaro. It was a choice to essentially back the SEC for the next decade, and to put more money into the potential of F1. The effort was a conscious one to keep a tight-lipped mission to bolster Monday Night Football’s booth. It was an understated strategy to reinvest in the NHL. Those decisions make the future ones with the Pac-12, the Big 12, NBA and UFC fascinating to watch but what’s clear is that this ESPN strategy is different. The old adage of “pigs get fed, hogs get slaughtered” may have applied to the network under different leadership, but these aren’t eating pigs. These are boars.

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BSM Writers

The Producers Podcast – Big Baby Dave, Jomboy Media

Brady Farkas

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Big Baby Dave has his hands in everything for Jomboy Media. He joins Brady Farkas to talk about how he brings a unique sound to each show he works with.

iTunes: https://buff.ly/3A7FJ4a

Spotify: https://buff.ly/3bZ7NgG

iHeart: https://buff.ly/3dB4FrO

Google: https://buff.ly/3JVC5NG

Amazon: https://buff.ly/3STupzF

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