Apple TV Service aka cord cutting rant

[Hookemfins]

I guess my main point is this: If Netflix can make Orange Is The New Black and House Of Cards, and HBO can make Veep, Silicon Valley, and Game Of Thrones using a subscription model of $8 and $15 per month respectively without ads, then surely USA can make Suits and TBS can make The Big Bang Theory under a similar model, along with their mostly cheap reality shows. I'm not asking these content products to banish all ads forever. I'm saying it would benefit them to offer users an ad-free subscription option. I would certainly be a customer if those shows were ones I was interested in, because I refuse to both pay and watch ads out of principal. I know I'm not alone in this stance.

You need to think of this from the business POV, not as a commercial hating viewer.
It again is tied to the model used either subscription based or ad based. USA network gets $1.33 per subscriber. IF they went standalone, how much would they charge to get the same revenue? Your desire may wind up with unintended consequences. If USA, TNT/TBS, AMC all went with stand alone packages, you would be paying more to watch TV.

While you may be willing to fork out the bucks for no ads the majority is just fine skipping them on a DVR. There are nearly 100 million satellite/cable subscribers. IF AMC goes with it’s standalone plans, I wouldn’t be surprised to still see commercials. They are one of the worsts when it comes to the amount of ads run, Nick and TV Land are the clubhouse leaders.

As for baseball, I don't think either of us know the revenue numbers. To have a proper discussion about this, we would need to know how much money MLB and the franchises make from TV rights and ads, divided by average viewership. I suspect that they make less per viewer from ads than most people think. I suspect that they make less per viewer this way than they do from the annual subscription cost of MLB.tv as an alternative (meaning they would make more money if every baseball fan cancelled cable tv and subscribed to MLB.tv). The only thing I have to back all of this up is that BAM is wildly successful right now, and there are articles about how their operation is basically printing money.

Don’t need that info, just the dynamics of how this works. The MLB clubs share in the revenue from national broadcasts. Then each individual team gets revenue from their local RSN’s to broadcast xxx amount of games per season. Those RSN’s then get sell ads so they can make a profit. I think they also get retransmissions fees from MLB to broadcast on MLB.TV but not 100% sure? Local market blackouts are due to protect the RSN. The fees paid by the RSN’s are based on ratings and the total numbers of subscribers.

MLB.TV is funded by each club and sales of subscriptions brings in revenue of around $620 million, including deals with other outside entities. There are no ads on MLB.TV which is why the RSN’s want local blackouts. If there are no local team blackouts, that is the reason why everyone will not dump satellite/cable for MLB.TV. I know what you are going to say next: Get a DNS blocker. The answer is, they do not work on phones or tablets that require location services to be turned on. The majority won't do that.

The national contract (ESPN, FOX, TBS) is for $1.5 billion dollars shared equally by each team. It’s an 8 year deal. RSN numbers vary widely. The low is the Marlins who receive only around $15 million dollars annually from FOXFlorida. The top of the heap is the Dodgers where PrimeSports and Texas Rangers (FoxSW) pays $3 billion over 20 years or around $150 million/year.
Some teams like the Yankees and Mariners are partial owners of their RSN.

 

[oneMadRssn]

You need to think of this from the business POV, not as a commercial hating viewer.
It again is tied to the model used either subscription based or ad based. USA network gets $1.33 per subscriber. IF they went standalone, how much would they charge to get the same revenue? Your desire may wind up with unintended consequences. If USA, TNT/TBS, AMC all went with stand alone packages, you would be paying more to watch TV.

While you may be willing to fork out the bucks for no ads the majority is just fine skipping them on a DVR. There are nearly 100 million satellite/cable subscribers. IF AMC goes with it’s standalone plans, I wouldn’t be surprised to still see commercials. They are one of the worsts when it comes to the amount of ads run, Nick and TV Land are the clubhouse leaders.



Don’t need that info, just the dynamics of how this works. The MLB clubs share in the revenue from national broadcasts. Then each individual team gets revenue from their local RSN’s to broadcast xxx amount of games per season. Those RSN’s then get sell ads so they can make a profit. I think they also get retransmissions fees from MLB to broadcast on MLB.TV but not 100% sure? Local market blackouts are due to protect the RSN. The fees paid by the RSN’s are based on ratings and the total numbers of subscribers.

MLB.TV is funded by each club and sales of subscriptions brings in revenue of around $620 million, including deals with other outside entities. There are no ads on MLB.TV which is why the RSN’s want local blackouts. If there are no local team blackouts, that is the reason why everyone will not dump satellite/cable for MLB.TV. I know what you are going to say next: Get a DNS blocker. The answer is, they do not work on phones or tablets that require location services to be turned on. The majority won't do that.

The national contract (ESPN, FOX, TBS) is for $1.5 billion dollars shared equally by each team. It’s an 8 year deal. RSN numbers vary widely. The low is the Marlins who receive only around $15 million dollars annually from FOXFlorida. The top of the heap is the Dodgers where PrimeSports and Texas Rangers (FoxSW) pays $3 billion over 20 years or around $150 million/year.
Some teams like the Yankees and Mariners are partial owners of their RSN.

Look. You've said a lot about how it works today, but you've said nothing about why it has to stay this way forever other than it makes business sense. Of course businesses would rather maintain the status quo. However, the smart businesses will realize the choice isn't status quo or nothing. The choice is adapt or die.

I'll tell you a HUGE market participant willing to pay for no ads with no manual skipping required: parents. Advertising to kids is awful, and causes the kids to want all sorts of stupid things that the parents then pay for. Netflix and Amazon know this, which is why they are pouring so much money into kids shows. HBO knows this too, which is why they just bought rights to Sesame Street. It's why so many parents still donate to PBS too. Get the to subscribe for the kids shows, get them to stay for the adult shows.

Also, most cable providers are now seeing more internet-only subscribers than cabletv+internet bundle subscribers. This is a huge turning point. Don't assume the masses are happy pressing fast forward and watching garbage content. The tides are turning.

If AMC doesn't see this as competition, then their leadership is foolish. If AMC dies, the good TV shows will still be made. Netflix and Amazon have shown they are willing to put up the big bucks and pay for good producers, directors, writers, and actors. Had it been pitched 5 years later, Breaking Bad could have easily been a Netflix original.

I'm not saying the switch from cabletv funded by ad revenue to streaming subscriptions will be flipped overnight on all channels. Any leader in charge of a channel or media production would be a fool to not consider selling a streaming subscription service right now side by side with their cable offering. Any channels that don't have something in place within 5 years will be far too late to the party. It doesn't have to displace the cabletv model right away, it can live side by side for a while. However, any streaming offering that also includes mandatory ads will not be as successful as an ad-free version, I think.

As for sports - that same argument applies. As people move away from cable bundles and more to internet-only subscriptions (which more than 50% of the US population already has), those big distribution deals will be a lot less lucrative. There is already talk of the blackout restrictions in baseball going down, because so many people are willing to pay for MLB.tv. It might not happen this year or next year, but it's going to happen.

 

[d21mike]

Look. You've said a lot about how it works today, but you've said nothing about why it has to stay this way forever other than it makes business sense. Of course businesses would rather maintain the status quo. However, the smart businesses will realize the choice isn't status quo or nothing. The choice is adapt or die.........................

I agree. So many times people talk about how advertising is a requirement or the entire industry will crumble. Netflix, Amazon and HBO and others are showing this is simply not true. And with Hulu considering a no Ads Option (finally) which will spur a subscriber growth and more "profit" due to more subscribers maybe the OLD executives with start to realize how wrong they have been (maybe). Just look at the 66 million subscribers at Netflix. 66 x 9 = $594 million "per month" can go a long way to create ad free tv. Really pretty simple to me.

 

[Hookemfins]

Look. You've said a lot about how it works today, but you've said nothing about why it has to stay this way forever other than it makes business sense. Of course businesses would rather maintain the status quo. However, the smart businesses will realize the choice isn't status quo or nothing. The choice is adapt or die.

It's funny but I was thinking of starting a new thread about the future or what is ahead of TV.

It going to happen once people drop cable for stand alone products like Netflix, Amazon, HBO...etc. Last year only 125k people dumped pay TV providers. Almost 1.2 million dumped cable but Uverse and Directv had net gain. For it to start happening you are going to need a lot more than .0013% of pay TV subscribers to leave.

http://www.fool.com/investing/gener...tting-a-real-problem-for-cable-companies.aspx

Getting an SVOD service does not mean a home is about to cut cable, according to Nielsen, which reported that "93% of households that have cable, broadband, and SVOD are more likely to drop the other two services than cable."

As pay TV starts adding more and more content for streaming, that could help keep satellite/cable alive.

As for sports - that same argument applies. As people move away from cable bundles and more to internet-only subscriptions (which more than 50% of the US population already has), those big distribution deals will be a lot less lucrative.

As mentioned above, there are not a lot of people leaving satellite/cable.

There is already talk of the blackout restrictions in baseball going down, because so many people are willing to pay for MLB.tv. It might not happen this year or next year, but it's going to happen.

i've been hearing the talk about the blackout restriction for a 2-3 years now. There is a class action law suit that may be headed without the blackout being lifted. I hope they do end the restriction but I won't get my hopes up. If it happens, great.

If contested, satellite/cable will lower your bill for MLB EI to match MLB.TV. Most pay TV providers offer MLB.TV for their MLB EI subscribers.

I don't want you to think I am being obstinate or argumentative on this subject. I am just being realistic.

With ATV's streaming service coming out at some point and Sling TV that could be a start. People can mix and match. But I still consider the above services still pay TV as they rely on the same per subscriber fees as traditional pay TV does.