Sports. Lots of people like watching it live because the outcome is unknown. Movies and TV series can have predictable outcomes, and news network can be a bore to some. The major sport leagues know this to be true. So do the broadcasters who carry them. They get advertising revenues, and those on pay-tv services get additional revenue from subscriber fees.
Sports continues to be the driver for moving HDTVs into many homes in America. And for cable and satellite companies. I’ve gone from cable to satellite to cable again, and now I’m set with DISH Network. I refuse to pay Jimmy Dolan $78 per month for a basic cable package, so I’m sticking with Charlie. But I still have to choose between channel packages/bundles. Which doesn’t include AMC or MSG. Let them fight it out.
Sure, I can edit the channels I surf, but why must I pay for 20 shopping channels? Some people say the same for sports channels. Charlie’s mother doesn’t watch sports, so why can’t we just pick and choose the channels we want to watch — and pay only for those. DISH Network’s Hopper STB lets viewer skip ads, so why not let subscribers get only channels they want? How about an “over the top” service via the Internet?
Dish Network is talking to networks such as Viacom’s MTV about offering their channels over the internet, a service that could shift the economics of the pay-TV industry, five people familiar with the plan said.
In addition to Viacom, the negotiations involve the Spanish-language broadcaster Univision Communications and Scripps Networks Interactive, owner of the Food Network and HGTV, said the people, who asked not to be named because the talks are private. The companies would offer an online product known as an over-the-top service, charging a lower price for a smaller bundle of channels viewable on a computer or tablet.
Dish’s service would change the dynamics of the pay-TV business, whereby customers are forced to pay for bundles with channels they don’t watch. It also gives Dish a way to avoid its biggest programming expense: sports. Walt Disney Co.’s ESPN gets as much as $5.13 each month for every cable and satellite subscriber, compared with the industry’s average of 26 cents, according to SNL Kagan.
“That’s when you could start seeing a few cracks in the ecosystem,” said Alan Gould, a media analyst at Evercore Partners. “The addition of an over-the-top service would be significant.”
The effort would mark the biggest attempt to create an online service with live cable channels, a break from the approach taken by Netflix and Hulu. For Dish, the move would decrease its reliance on its satellite-TV service, which ranks second to DirecTV in U.S. customers. This also gives it a way to undercut pay-TV competitors on price.
Cable networks, meanwhile, have been reluctant to break up their suite of channels and sell them a la carte because it would lower the amount of available advertising inventory. Viacom and other cable networks typically sell ads at a lower rate than the big broadcast networks such as CBS Corp., so they rely on volume.
Viacom would be willing to sell smaller bundles of its networks, which also include Nickelodeon and Comedy Central, at a higher rate per channel than it does for its full complement of programming, according to two executives familiar with the situation.
Spokesmen for Dish, Viacom, Scripps and Univision declined to comment.
A central question is whether consumers want smaller bundles that lack sports programming. Several pay-TV operators, including Dish and Time Warner Cable, already offer cheaper packages that don’t include sports. ESPN — admittedly a network with a horse in the race — says those offerings aren’t very popular. “History shows that very few households subscribe,” said Amy Phillips, a spokeswoman for ESPN, the biggest cable sports network.
Dish offers a $20-per-month satellite package without ESPN, though it also lacks other top channels such as MTV and HGTV. Cable and satellite companies’ agreements with ESPN typically require the video distributors to include the sports network in their most popular tier of TV service.
Dish Chairman Charlie Ergen, who co-founded the company, has said there will be a day when a pay-TV operator chooses not to include sports in order to charge $10 to $20 per month less than competitors.
“My mom doesn’t watch sports,” Mr. Ergen said during a conference call last month. “I’ve got neighbors who don’t want sports. I’ve got friends who go to the bars or the neighbors’ house to watch sports.”
Bring on the “DISH Topper!”