Not sure if you're living in a cave, but cable/satellite subs are decreasing now and will decrease at a higher rate as more CATV/SAT customers migrate to Internet TV options (which will significantly improve as technology evolves). In response, there are a couple of options for CATV/SAT providers. Decrease their packaged pricing or provide more ala carte options. The result is that niche networks like BTN are going to face downward pressure on CATV/SAT subs. Even Jim Delaney would tell you that.
***OFFICIAL BIG 12 EXPANSION THREAD 2.0***
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Not sure if you're living in a cave, but cable/satellite subs are decreasing now and will decrease at a higher rate as more CATV/SAT customers migrate to Internet TV options (which will significantly improve as technology evolves). In response, there are a couple of options for CATV/SAT providers. Decrease their packaged pricing or provide more ala carte options. The result is that niche networks like BTN are going to face downward pressure on CATV/SAT subs. Even Jim Delaney would tell you that.
Jim would also tell you ESPN's carriage fee has never been higher, and FOX just spent billions for sports content like the YES Network that they plan on bundling with the BTN to force them on basic cable. If large super-conference networks are bundled together, they are nearly as immune to ala carte cable as any of the networks the Big 12 depends on.
Google fiber is starting up in Kansas City. Supposed to allow people to subscribe to the channels of their choosing. Interested to see how that goes. Their price point is very attractive, top speed internet and hdtv with DVR, a Nexus tablet and a terabyte of storage in the cloud for $120 a month.
ESPN's carraige fees and BTN partnering with YES won't matter as a significant number of CATV/SAT customers don't want sports programming and CATV/SAT providers will be forced to come up with bundles not having sports networks (or face even more customers migrating to Internet TV options).
I posted an article somewhere on here a few weeks ago that had the Direct TV CEO that basically said the continuously increasing carriage fees of these networks can't continue or else we'll reach a breaking point. I know it will take a lot of years, but I just can't imagine that 15 or 20 years from now that everyone will be forced into the cable bundle just like they were in the 80's or 90's when cable TV skyrocketed. If the technology is out there to do it differently, I think something will lead us into a la carte or at least choose 5 mini-bundles out of 10 options. That or else you could see some providers pop up that are just niche providers like sports-centric bundles or the like.
Just think its an awfully gutsy long term play by the big 10 to put your expansion eggs in the Rutgers/Maryland basket when you have no guarantee that the BTN cash cow is going to exist giving you money forever from people who don't watch it when changing technology can potentially nix your cash cow. If I'm the B10 I'd see if I could make a play for N Carolina or Georgia Tech long before I add Rutgers/Maryland.
Just think its an awfully gutsy long term play by the big 10 to put your expansion eggs in the Rutgers/Maryland basket when you have no guarantee that the BTN cash cow is going to exist giving you money forever from people who don't watch it when changing technology can potentially nix your cash cow. If I'm the B10 I'd see if I could make a play for N Carolina or Georgia Tech long before I add Rutgers/Maryland.
The thing is...there is such a demand (at least perceived) for ala carte. As soon as one provider gets that figured out...(how to be profitable) then they will dominate the cable tv world. Just my opinion but if I had a fledgling cable company I'd be offering ala carte or mini bundles or something and then swimming in my riches.
Is there such demand for a la carte right now though? People may want it, but they're still gladly forking over their money the way it is. I think I've seen that 85% of US households have cable/satellite. People may want a la carte even if they're paying for it all, but so many of these TV channels tie back to one owner that its almost impossible to get the a la carte ball rolling for a startup cable/satellite provider because nobody wants to split up their channels. That and the current content providers and distributors are going to fight tooth and nail against a la carte because they know they're in trouble if it gains traction.
Check out this article below though...it says that some are predicting $200/month cable bills in just 8 years! That dog won't hunt and that bird won't fly with anywhere near 84% of the US population. Something is going to give in the next 10 years. I don't know if it will be excessive pirating of content, a la carte, massive reduction in these junk channels put out, or a change in content distribution, but something is going to give here before too long. It will be interesting to watch and interesting to see how all this shapes college athletics. Basically ESPN is the college commissioner over the major conferences, but just what happens if they TV execs who are pulling the strings for realignment face a cash crisis at some point? Does it still make sense to send the Nebraska women's soccer team out to Rutgers and Maryland on a weeknight when your TV revenues take an unexpected drop in the future? Probably stays status quo... but just what if the college presidents took a step back at some point and considered academic progress of their athletes as top priority over TV dollars if the TV revenue bubble unexpectedly pops? Just seems like a dangerous game to play when your #1 priority is TV money.
The Cable Industry Isn
I haven't seen anything about Google offering ala carte channel selection. Do you have a link?
Looks like they had most major channels, didn't see a la carte. But that's almost worth moving to KC for, sign me up for google fiber! 1gig download speed?!
https://fiber.google.com/about/
I haven't read about the tv but they have a gig internet for $70 or Free Internet at 5 down and 1 up.... You have to pay $300 or $25 /mo for a year as an initial investment but holy crap what a deal. Includes their box so you don't have a rental fee or anything like that either. This is years away from Des Moines but holy crap I hope they roll this out ASAP.
EDIT: Just checked out their channel lineup and I may have to boycott this service if they do ever make it to Des Moines....they have the Longhorn Network.
I haven't read about the tv but they have a gig internet for $70 or Free Internet at 5 down and 1 up.... You have to pay $300 or $25 /mo for a year as an initial investment but holy crap what a deal. Includes their box so you don't have a rental fee or anything like that either. This is years away from Des Moines but holy crap I hope they roll this out ASAP.
EDIT: Just checked out their channel lineup and I may have to boycott this service if they do ever make it to Des Moines....they have the Longhorn Network.
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They've decreased to a certain point, but it also bears mentioning that the economy hasnt been the best the past few years prompting a lot of people to reassess where their spending is going. Ala carte wouldnt change that, as there is plenty of evidence that an ala carte model wouldnt be much cheaper unless you only like a couple of the cheapest channels (and in many cases it would mean those less valuable channels would disappear entirely)
The question of whether there is demand for ala carte is moot. The cable providers have local monopolies (duopolies if you count the satcos). The networks have their own power (often owning blocks of networks, saying 'you want this, you take all the channels, and put them all on a basic tier rate. otherwise, you pay 10x as much to put them on a premium tier). Nobody is stepping up to compete with that in an ala carte model anytime soon, not even google. For anyone that likes sports, i guarantee your bill is never going down as the primary driver of cost increases is sports channels, channels that they KNOW have the least benefit from online downloadable sources (as their primary value is that people want to watch sports live), and to an extent all these local retransmission battles we've seen lately (which sports are usually used as blackmail material- its no coincidence they start threatening to cut it off right around the super bowl)
Again, even if this were to happen (it won't), the Big 12 would be hurt equally as much as any other conference. Where do you think networks like ESPN gets its money to pay the Big 12? Ala Carte cable would decrease much of the available funds for college football TV contracts. The conferences that built influence and wealth via conference networks before hand will be so far ahead in relevancy that they are the ones that would be set-up to survive such a drastic change.
In an ala carte cable world, the super-conferences (BIG, SEC, PAC) with their conference networks bundled together would be desirable to enough sports fans to still be profitable. They would get the T-shirt fan to purchase. Especially compared to the little Big 12 which could not compete in the previous decade due to no conference network.
Yep. People think they want ala carte cable, until they realize that either the costs per channel will increase drastically or several channels will no longer exist. Technology may change, but the companies that own the rights to several blocks of channels are not going to stop selling them as bundles. There would be an arms race to create even larger blocks. Say Google lets you choose whatever channels for 120/month. It is unlikely Google is acquiring the rights for those networks at a cheaper rate.
If internet and cable providers had their way, we wouldn't even be able to view cyclonefanatic.com online unless it was part of ESPN or if we paid extra just to see it...not extra for a membership...just extra to even be able to see the irrelevant part of the internet cyclonefanatic was relegated to. Luckily a few huge companies like Google are on the side of the everyday man in this particular issue or the internet as we know it would be much more like a mediacom or directv subscription where we only get "channels" that they allow us to have instead of any small businesses being able to create a website everyone can see.
This.
For live programming, ESPN3 was about the closest thing we had to ala carte, and ESPN pretty much neutered ESPN3 this past fall by moving the majority of the desirable live programming to WatchESPN (which requires a cable subscription). That was a pretty strong statement against ala carte.
As alarson said, this situation is "monopolized" on both the supply and distribution end, and both ends like the current arrangement. In order for ala carte to break through, I think it would take some kind of major "shock" to upset the current situation, like some kind of sweeping government regulation, and I just don't see that happening.
The point of my original post on this topic was primarily not ala carte cable pricing. It was the ability of B12 schools to individually monetize their T3 rights in the best manner possible for their individual situations. Schools like Ohio St will crave the B12 model as opposed to sharing with the likes of Northwestern. It's a huge reason why ND will likely never join the B10.
The number of BTN CATV/SAT subs as a % of total video subscribers WILL decrease due to a variety of technological and pricing factors, including ala carte pricing (but certainly not solely due to ala carte pricing). I'm not sure what plans BTN has with regards to Internet TV. If BTN is banking on increasing future revenue streams solely on the traditional CATV/SAT sub model, they are making a bad assumption.
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