Uh-Oh: CEO of the Dish Network Says That It's No Longer Unthinkable to Simply Drop ESPN from Cable Networks
Update: Thread Has Become Cord-Cutting Advice/Recommendations/Q&A

Before getting to that, let me post this fairly minor item that doesn't deserve a full post, from Variety yesterday:

Walt Disney’s ESPN, under scrutiny as it works its way through subscriber losses, said it would reorganize the executives who supervise its overall content production.

"Under scrutiny" from its corporate parent as it loses more and more subscribers, and "reorganizing." Not great words for a business.

Now, as you almost certainly know, anyone with cable is forced to pay ESPN something like $7 per month, almost $100 per year, whether they watch it or not, because ESPN is almost always included in the "base" package, and the ESPN fee is extracted from your wallet as part of the "base package" rate.

Cable companies battle ESPN to keep that fee down, while ESPN fights to get it higher. As ESPN continues to lose viewers (and thus their advertising-side revenue), and as their too-costly broadcast rights cost them more and more, ESPN is going to want -- need, really -- to jack up that Involuntary Rent Payment that cable subscribers are forced to pay to really high levels.

Cable companies are making noise that no, it's not unthinkable any longer that we would simply drop you.

If that happened, Katie Bar the Door, because that would destroy ESPN's business model.

Now the CEO from Dish Network has a dog in this fight. It is in his interest to talk tough about dropping ESPN entirely, because he wants to signal he has leverage in their negotiations for carrying the network automatically/involuntarily.

If subscribers had to choose to pay for ESPN rather than having it forced upon them, well, ESPN's books would bleed red. I'm not sure they could even survive three years.

So while this is probably just some posturing for negotiation points, it's still great to hear that one cable company (Altice) seems serious about just dumping them, and another company (the Dish Network) is thinking about dumping them as well.

posted by Ace at 01:47 PM

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