[IBM]

Would you spend $25-35 per month for ESPN? Because that's what it would probably cost if it wasn't subsidized by the bundle.

Your answer to that question may in fact be yes, but the economics don't work out. Disney would make more money getting $6 from every cable subscriber than try to scratch and claw to scale up an OTT service like Netflix that would inevitably cannibalize their current business.

The only thing that will change the economics is when the market forces their hand, which is what this story is about.

[matt4077]

Sports is the one area where it basically costs whatever people decide. IF ESPN goes belly-up, somebody will buy the rights for less money, and the cycle continues until it finds a new balance. There's a lot of flexibility in players' salaries and owners' profits that can only exist because professional sports leagues operate in a somewhat inelastic market (you're not going to switch to watching ping pong just because it's cheaper).

[cloakandswagger]

That's ultimately what has to give here. Bundling sports channels into cable packages has allowed a bubble to form in the compensation of players and owners. As the article correctly assesses, it is an enormous tax that is passed on to everyone with a cable or satellite subscription.

It's plainly obvious that the exorbitant salaries that players and owners are paid has to go away for the industry to survive.

[syshum]

>>Sports is the one area where it basically costs whatever people decide

I wish this was true, and with cord killing and Ala carte media becoming more of the standard it will be, but Sports today, especially major sports like NFL, MLB, etc have a hugely over inflated cost because of bundling.

[CaptSpify]

It sounds to me like the story is about how ESPN needs to tighten their belt a bit. Sure, they might have been getting $25-35 a month, but that doesn't mean they deserve it perpetually.

[matwood]

The story is that espn can't tighten their belt because they are locked into long term rights contracts with the sport leagues. Something will have to budge obviously, but the effect is going to fan out across the leagues and down to player salaries.

[tomjakubowski]

ESPN does more than just broadcast live sporting events. They have to fill a whole 24 hours every day, so they also produce original programming (Sportscenter, PTI, Around the Horn, etc.). The original shows are surely cheaper for ESPN to produce than the live stuff (broadcast rights are expensive), but many viewers get almost no value out of them in the Web era. (I can get my "hot takes" from Twitter and blogs, thank you very much.)

If I could pay only for ESPN's coverage of live events in $SPORTS_I_CARE_ABOUT, I would do that happily. And I do pay for similar products, with my MLB.TV and NBA Game Time subscriptions, but that's only because I'm lucky enough to live outside of my favorite teams' blackout areas. Even then, though, I miss out on national broadcasts, which are blacked out, and I have to either go to a bar or find an illegal stream on the Web to watch the game.

[bwilliams18]

What's going to happen here is you won't be paying ESPN for $SPORT_I_CARE_ABOUT you'll be paying $SPORT_I_CARE_ABOUT for $SPORT_I_CARE_ABOUT.

MLB's already built out the technology, and people to make this happen in the form of MLBAdvancedMedia, (some smaller market owners suspect their ownership stake in MLBAM is more valuable than their team). It will be interesting to see if the other sports come to MLBAM (WWE, PGA, and even ESPN have done) or if they will each roll their own platform.

[monksy]

> my favorite teams' blackout areas.

This is why I won't get NHL Game cast or MLB at bat. They're not providing a service I want/need.

[ubernostrum]

As part of a class-action settlement, MLB will be required to change their blackout rules. The settlement notification lays out three things.

Right now they have to begin offering a "this is my favorite team but I live in another team's exclusive market" subscription, which lets anyone with an in-market TV subscription watch their preferred team's games even when they play against the in-market team. So, for example, I live near SF but like the Cubs; on this package I could verify that I have a TV subscription which carries Giants games, and then Cubs-Giants would not be blacked out and I could stream the Cubs' version of the broadcast.

Right now they have to handle the "unserved fan" problem, by providing streaming to any in-market fan of a team who's unable to obtain a cable or satellite subscription for the team's games (if I were a Giants fan this would affect me, as my only TV option for the Giants is DirecTV, and DirecTV says my apartment faces the wrong way and has a blocked view for installing a dish; MLB would be required to let me stream Giants games if I wanted them).

For the future, the settlement commits MLB to reaching agreements to lift blackout restrictions imposed by Comcast, Root and Fox, and freezes the subscription price of MLB streaming until those agreements are in place.

[rconti]

That model is fucking insane. I've gotten all of my TV over-the-air for years, which includes a surprising number of NFL games though almost no local baseball/hockey.. which is ironic, because the channels that air that stuff are actually worth the money to me, if I didn't have to pay the ESPN tax.

I considered the NHL all access even though I don't watch a ton of hockey, until I realized they blackout local games. Totally untenable model.

I do pay NFL.com for streaming. $100/year, I can watch any game I want at any time, and they also do those glorious condensed games that only take 45 minutes to watch, so I can sneak in a game I missed. The only drawback (and this is a biggie for some, I'm sure) is that they're not live; 10:30am PST games up for streaming by 1:30pm; 1:30pm games by 5pm, for example. That doesn't matter to me because I'm not likely to "waste" 3 hours of midday on my 2 free days of the week watching football; I'd just DVR it and watch it in the evening if it was available OTA anyway.

I'd also pay to stream F1 races, but that's not available either. I like some sports, but I just don't have any interest in the sports industrial complex.

[dba7dba]

I can't justify spending hundreds of dollars every month to pay for cable-internet/basic-cable-tv-package/wireles-phones AND super-cable-tv-package that actually includes ESPN and other sports channel. For an average family of 4-5 wirelss phones and average income, paying for cable-tv + super-cable-tv seems too much. And it is. Just to get content to show on the displays, a family has to essentially spend $ that can easily pay for a new CAR.

And because we cut cable-tv to stay sane financially, we get very little access to live sports games on over-the-air TV.

You wouldn't believe how LITTLE sports my kids watch on TV spontaneously, compared to how much I used to watch when a lot of important games were shown over-the-air TV.

What little they watch, it's from youtube. For some highlight or some incredible goals. But that's unlikely to turn them into a fan (serious or casual) of a particular sports or pro team.

The greed powered cable-tv movement has really driven a lot of fans away from pro sports teams.

This imo is a classic example of greed for short-term gain costing dearly in long-term.

Many kids in cable-tv-less households really don't interact with pro sports teams. What do you think the kids from such family will do when they grow up?

[monksy]

> greed for short-term gain costing dearly in long-term.

Pretty much summarizes amaerican business right there.

[galago]

I wanted to watch the world series, so I'm using MLB.TV via a foreign VPN. Its not something that would work if everyone did it, and its really an inferior experience. Its similar those totally illegal streams in quality, except that I'm paying for it.

[DrScump]

I don't understand. The World Series games are all free OTA broadcasts on Fox affiliates in the U.S. Are you outside the U.S.?

[tomjakubowski]

Not everyone has good OTA access. I lived in an apartment near Culver City six years ago and could only reliably pick up a handful of channels with an indoor antenna (all I was allowed, since it was an apartment).

[erichocean]

> Would you spend $25-35

Yes, I believe people would. I pay for the NFL's GamePass, which is similar (without the live streaming) and costs $100 for about 4 months worth of entertainment.

[cleaver]

I pay for single sport subscriptions (UFC and MotoGP). I think they work out to about $10/mo for each. I don't follow the major US ball sports, but it seems like they're a bigger deal with more games than you can watch. Spending $25 doesn't seem outrageous, of you're a fan.

[grogenaut]

MLB for one team works out to be around $.60/game... I watch everything on delay, which living in a different city than my team means I can pretty much just watch baseball at work for 1/2 the year. I just wish google would let me block sports scores on news. Just like who died on game of thrones, it's not news I care to see fed to me, I'll go find out the score if I need it.

[tripzilch]

> I just wish google would let me block

Wish, but don't forget you're still the product. They wouldn't let the other cattle opt out of hormone therapy either.

[jly]

I would pay $23-35 / month for ESPN, if offered. I mostly have a full cable package for this channel, and it costs a lot more than that.

ESPN has a lot of junk on it these days, but they've used their popularity to secure massive amounts of TV rights across a number of sports, most notably college football this time of the year. As a big fan, it's worth that much to me. I think it would be to others, as well.

[jelled]

sling.com includes espn along with a few other channels for only $20 a month.

[sudobear]

This is the chief reason I subscribe to Sling TV. It might not be widely known, but you can activate the WatchESPN app with your Sling credentials. This is great because the quality of experience watching tv on the ESPN app is way better than on the Sling app, which — at least for me, on the Apple TV — sometimes has pretty bad buffering problems.

[mathgeek]

The buffering problems are universal for me, and limited to Sling. I've seen them on AppleTV, Xbox One, and PS4.

[dcosson]

How do you get to the $25-$35 number? The article mentioned $7/month

[dcosson]

Not sure why I got a few downvotes, I didn't realize this was inappropriate. I'm genuinely curious about the economics of streaming tv vs bundled cable, I don't know too much about it.

[IBM]

Can't edit my post but it should have been $7.

This is a good blog post [1] to understand the economics of bundling. It's straight out of every 2nd year microeconomics textbook.

[1] http://cdixon.org/2012/07/08/how-bundling-benefits-sellers-a...

[brightball]

The only reason I have a TV package is for ESPN. The problem is live broadcasts are hard to do streaming. Netflix is comparatively easy.

[stinkytaco]

Major League Baseball would like to talk to you about that.

Frankly, the fact that I can almost always find an illegal stream of quality as good as ESPN's streaming, I find it difficult to believe it's that hard to do. And the fact that several major professional sports are doing it, mostly using MLB Advanced Media, tells me that ESPN can do this if it wants.

The problem is the economics of scale and advantages of bundling, not live broadcasts.

EDIT: I should add that not only is MLB's streaming as good as TV, it's better. I can pause, rewind, see multiple angles or even watch more than one game at once. If it weren't for draconian blackouts (see, there's economics getting in the way again) it would be the only way to watch baseball.

[brightball]

How many people are watching those MLB games at one time nationally?

Games like the Super Bowl where you are talking millions of individuals trying to stream the same thing, from the same source at the same time.

Same with college football with Saturdays.

[jon-wood]

Its difficult, but not impossible by any stretch - the BBC stream the Olympics live, and have done for several iterations now, without seeming to have any major problems.

They've got an even harder problem, in 2012 they were providing simultaneous live streams from 24 separate events at times. Sadly I can't find any statistics on just how many viewers watched something like the 2012 opening ceremony, but I'd be surprised if the numbers weren't comparable to the Super Bowl.

[kristianc]

The 2012 Olympics were an absolutely huge undertaking - the BBC went as far as creating a mock Olympics to test traffic and server load and at its peak shifted 2.8 PB of data a day. When Wiggins won gold, they were shifting 700GB/ps. No doubt things have come a long way since then - but I get the impression it really was no mean feat.

http://www.bbc.co.uk/blogs/internet/entries/2db7f335-660b-32...

http://www.bbc.co.uk/blogs/bbcinternet/2012/08/digital_olymp...

[boulos]

You meant 700 Gbps not 700 gigabytes (5.6 Tbps). Both are impressive, but the latter would have been fasincating.

[grogenaut]

MLB has a ton of issues in their streaming.

- If you're watching a game on say a 50 minute delay, the live CDN gets shut off about 10 minutes after the broadcast ends and you actually can't finish the stream for 40 minutes while they move it over to the VOD CDN. So if I have a meeting or whatever in the 3rd, it'll shut off in the 7th. I confirmed this bug with a friend I know there.

- Most of the players can't remember where you were in stream across crashes and definitely not across machines.

- Player constantly resets settings and switch to showing you the scores.

- Not technical but the audio recaps ALWAYS use the broadcasters from the winning team. So no need to watch a 7 minute recap of the game, first word uttered by the broadcasters tell you who won.

- Player won't re-upgrade the stream quality after it downgrades it.

- Player can't recover from a stopped stream.

- Player is in flash still on desktop. Which is blocked by my work firewall.

- Only their phone support does anything.

- They don't trim out rain delays, so you can sit there for 5 hours on a VOD during a rain delay. You "could" skip to the next inning but you have to turn on spoilers if it happens mid inning (which happens often).

- You can jump to the top and bottom of most innings. Playstation and desktop apps often lose their minds and restart.

- You can't skip past pitching changes even though they're a standard 2 minutes.

- Watching the tv broadcast but changing to a radio audio crashes the ps4 app.

- Fire TV app, when you select "From Beginning" on a stream you're starting late always jumps live. If you chose live, you can't rewind at all.

- If network is down the app loads that there are no games on the calendar and leaves it cached as empty. You have to restart the app to fix it.

- They show very little of the color commentary from the field, only booth stuff.

- Watching a vod you have to fast forward 12-18 minutes to find the beginning of the game.

- Inning start markers often are often placed as far as 2-3 batters in. I've seen 2 outs in before.

- The web version has tons of issues, I mostly use the ps4 app as it's more stable.

- The mobile apps require you to have full GPS turned on, which is great for battery life when you're already streaming.

- You cannot time shift radio broadcasts of games. You can't pause them either.

- If a radio broadcast buffers to much it just stops playing and you have to use the app to restart it.

- Getting to a broadcast on mobile requires jumping through a bunch of hoops all trying to show you the score.

- You can't time shift on mobile.

- I CANNOT STREAM THE AUDIO OF THE GAME AT THE STADIUM BECAUSE IT'S BLACKED OUT. NOR CAN I WATCH THE GAME I AM SITTING AT FOR THE SAME REASON. I did sit at the 2nd to last mariners game while watching the Cardinals game and separately the Giants game on my laptop and phone. Which was fun.

There are more but I forget.

[rapind]

How is Netflix comparatively easy? The problem isn't the video conversion, that's solved by throwing CPU at it. The problem is distribution... which is the "exact" same problem Netflix solves.

[brightball]

Because it's a preexisting set of files that can be distributed geographic down to closer and closer endpoints in the network. When you're watching Netflix you can just as easily be watching from a pure-fiber connection point to your local ISP that's not reaching across the internet at all. Viewership spikes will be more predictable based on their own choices, preferences, schedules, geographic region, etc. If an interruption happens, it's also very likely going to be isolated to a small subset of users.

With a live broadcast like the Super Bowl, you're talking about millions of simultaneous individual streams at the exact same time period, globally, from a central point, across the network and if there is a problem it's probably going to happen to everybody. The more people that tune in, the harder it gets.

Comparatively, TV broadcasts are a much better option for this type of event. You've got a single broadcast for every channel that people can tap into if they want to watch. The total bandwidth is 1 stream per channel instead of 1 stream per person.

Tapping into the WatchESPN app or others for sports that aren't being watched heavily is fine. Tapping into it for something with very high viewership is an entirely different ballgame (pun intended). The broadcast model is just much better suited to live events.

[kareemm]

The difference between ESPN and Netflix is that you have (tens of) millions of people watching an event at the exact same time. This is a similar problem in nature, but the simultaneous nature of the problem mean your solution will be different.

[jdavis703]

Doesn't that make the problem easier? Send one stream to a network node close to the viewer and then "fan out" the stream from there? No need to worry about 50 different users who all started watching Luke Cage at slightly different times.

[apendleton]

Yeah, but for non-live broadcasts you can do this too, but do it asynchronously, and indeed, Netflix does. If you're watching reasonably popular content (Luke Cage, say), you're not getting it from Netflix proper, you're getting it from a a Netflix point of presence colocated with your ISP. It's the exact same "fan out" model, but for most of the transit (the whole part that crosses the open Internet) they can take as long as they want, transfer during off-peak periods, are tolerant of congestion, etc.

[lmm]

Multicast has been in the works for decades but it's still not reliable enough. Partly a chicken and egg problem - sysadmins don't bother checking that multicast works on their networks, because no-one uses multicast.

[Pyxl101]

What he's describing doesn't require multicast. It just requires a hub and spoke model with multiple layers.

[guelo]

The article says ESPN gets $7/subscriber.

[x0x0]

And most subscribers don't watch espn. If espn doesn't get to charge every cable subscriber rather than only the people who watch espn, prices probably go up at least 4x. And more than just the ratio of fans/nonfans because some casual sports fans will decide $7 x (4 to 7) x 12 = $336 to $558/year isn't worth it. Or are only fans of certain sports and will terminate subscriptions during offseasons.