Saturday, May 6, 2017

How ESPN Destroyed Cable

Cable television priced itself out of existence by including too much on the basic tier.  And channels like ESPN provided less and less sports and more and more cheap-to-make talk shows.

ESPN is facing financial woes today.   In case you've never watched it, ESPN is a channel where a bunch of guys sit around a desk in Bristol, Connecticut and talk about sports all day long.   They don't actually show any sports, they just talk about them.    Well, that's what I've derived from it, after seeing snippets of the channel in bars and in hotel rooms.

As more and more people disconnect from cable television, advertisers are realizing something about ESPN and sports in general.   While sporting programs are very popular and do generate good ratings, they were not as popular as many advertisers thought.    ESPN forced cable companies to provide it on a "basic" (but not "sub-basic") tier and thus increased its apparent reach to viewers, which in turn, cranked up their advertising rates.  Other cable channels, such as MTV followed suit.   These channels knew that if people had to pay a la carte pricing, their channels would not likely be selected.

So the cost of "basic" cable went up to $50, then $80, then over $100.  Suddenly, cable television was competing with car payments.  And people were starting to realize that even though they had 500 channels, "nothing was on" that they wanted to watch.   They were paying for a lot of content they didn't need or want, but was "bundled" together whether they liked it or not.

The other half of the problem was content.  Just as GM screwed the pooch in the 1990's and 2000's by de-contenting their cars (going to cheaper materials, plastics, and fabrics) in order to save money, the cable channels have gone to cheaper-to-make "reality" and talk-type television shows in place of quality content.  Eventually, people got tired of seeing yet another group of people argue in a rented house, or pore over piles of junk, or go house-flipping, hunting, or whatever.   And talk shows, blathering on for hours about politics, sports, or whatever, have a very limited audience, particularly when there are so damn many of them to watch.

I gave up on cable over a decade ago.   We had it in our condos in Florida, because we rented them out and people expected it.  We had tube televisions back then, that's how long ago that was.   But we really hated it, as it was just compulsive behavior to flip through the channels all the time - much as texting is today.   We found this service online called "Netflix" and started getting DVDs though the mail.

When we moved, we didn't bother to call the cable company to connect.   Why bother?   Their product was so expensive and toxic that it was a real no-brainer to say "no" to it.    Why pay a lot of money every month to be advertised to?   One could ask the same question about smart phones, and maybe people will start asking that down the road as well.

It is hard to say whether a la carte pricing would have saved cable or not.  It is staggering the fees that program providers (even off-the-air stations!) get from the cable companies (and by extension, subscribers) for their content.   For commercial-free stations like HBO or Showtime, I get it - this is how they make their money.  But to carry commercial stations?  The cable TV company is doing the stations a favor by expanding their audience!  Yet, the cable companies pay the commercial stations for rebroadcast rights.  That just makes no sense to me.

But then again, the entire concept of cable television - or television in general - never made much sense to begin with!