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Are Live Sports Pay-TV's Firewall or Its Albatross?
I've long assumed that live sports carried on cable TV networks (e.g. ESPN, Fox Sports, TNT, TBS, NFL Network, regional sports networks, etc.) would be a key firewall against cord-cutting since the games they air are unavailable online. In other words, if you're a sports fan, dropping your pay-TV subscription would be unthinkable. While I still believe that's mostly true, recently I've started wondering if it's possible that sports actually may also be an albatross for pay-TV operators, limiting their ability to effectively compete with online-only alternatives.
I use the word albatross because pay-TV providers actually have very little flexibility to offer non-sports fans lower-priced packages that don't include sports-oriented channels. In fact, the most surprising aspect of last week's announcement by Time Warner Cable of a new lower-priced tier called "TV Essentials" it's testing is that it will exclude ESPN, which is virtually unheard-of in pay-TV packaging. Because the underlying deals that cable networks have with sports leagues and rights-holders are so expensive, the networks try to get carried on the most popular pay-TV service tiers, thereby ensuring the highest number of subscriber homes (basic cable networks are paid by distributors on a per subscriber basis, so the more subscriber homes, the higher their revenue).
Categories: Cable Networks, Cable TV Operators, Satellite, Sports, Telcos
Topics: ESPN, Fox Sports, NFL Network, TBS, Time Warner Cable, TNT
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