Peter Kafka

Recent Posts by Peter Kafka

Like Sports on Cable? Pay Up. Don’t Like Sports on Cable? Pay Up, Anyway.

It’s been a couple years since we last took a detailed look at the way your cable dollars get split up. Takeaway from our 2010 review: You pay a whole lot of money for sports TV, whether you like it or not.

Let’s take another peek, courtesy of SNL Kagan and Barclays analyst Anthony DiClemente, who has an updated list of wholesale prices by channel* (the list on the right is for ad rates, which we can ignore for the purposes of this story):

Takeaway from today’s chart: Nothing has really changed — you’re still paying a lot for sports, and you’re paying a lot for ESPN.

That’s why Disney’s sports channel is the most valuable asset on your cable dial. And it’s also why you’ve been hearing increasing grumbling — from both customers and ESPN’s non-sports cable competitors — about ESPN’s drag on your cable bill. (We’ll talk to new ESPN boss John Skipper about this topic next week at Dive Into Media.)

As I’ve noted before, the odds are that this doesn’t change anytime soon: Disney and ESPN can charge that much because the cable guys, like Comcast, think the programming is worth it to their customer base. And they’re signing up long-term deals that will keep that fee structure in place for the next decade.

But there is a chance that a “virtual” cable operator, using the Web, decides to offer a package that doesn’t include ESPN. They could either use that unspent money to lower customers’ bills, or plow it into other programming.

Again, this will also mean that subscribers couldn’t get any Disney programming, because Bob Iger has zero interest in splitting up the bundle. But I know of a few folks who have at least contemplated the idea.

So what about that “over the top” option, anyway? Some industry observers, like BTIG’s Rich Greenfield, are sure that someone — Apple, Google, Verizon, who knows — will offer one this year. Today, Bernstein’s Craig Moffett has a long essay describing why that won’t happen for a long time, if ever. Netflix CEO Reed Hastings said something similar this week, alluding to the fact that Microsoft has reportedly bailed on its Web TV subscription plans.

*The 2012 chart omits regional cable channels, which is why Fox Sports Net has disappeared in the new chart. I don’t know why the new one includes outliers like 3net, a 3-D channel that isn’t widely available (and/or relevant, as best I can tell).

[Image: ESPN]

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— Om Malik on Bloomberg TV, talking about Yahoo, the September issue of Vogue Magazine, and our overdependence on Google