So if people start cord cutting -- the catch all term for individuals who decide they'd rather not pay for a cable or satellite subscription -- ESPN has by far the most to lose of any channel in the country. ESPN has become the most powerful sports company in the world because just about every single cable and satellite subscriber in the country pays in excess of $6 a month for ESPN. That's despite the fact that only 20% of cable and satellite subscribers would be willing to pay for standalone ESPN according to a 2013 Needham and Company report. As a result, four years ago ESPN netted somewhere in the neighborhood of $7.2 billion a year in subscriber fees when the network boasted 100 million cable and satellite subscribers. But something alarming has taken place in the past four years, the Wall Street Journal reported last week that ESPN has lost over 7 million subscribers. Even more alarmingly, the pace of cord cutting is accelerating, the past year alone has seen ESPN lose over 3 million subscribers. That means in the past four years ESPN's subscriber numbers have declined by 10%, driving down revenue projections.
Stand alone ESPN seeking to produce the same revenue would cost at least $30 a month, or twice what HBO costs and three times what Netflix costs a month. Some sports fans would still consider ESPN to be a bargain at that price, but keep in mind you'd also have to pay for ESPN2 and ESPNU and the SEC Network and FS1 and NBC Sports Network and whatever additional regional cable channels carry your favorite local team's games. The net result would be most sports fans would pay over $100 a month just for sports channels. If you're a dad, like I am, you'd have to pay additionally for kid's channels. Your wife probably watches different channels than you do too, add on those costs too. Pretty soon you're paying more for less. That's why a la carte isn't a great deal for sports fans. In fact, it's a worse deal.
First is the New Horizons Pluto flyby. This is likely to be the last first encounter of a well-known body space that happens in my lifetime. I've been lucky enough to have been witness to all of them so far. JPL has a visualizer for Macs and Windows machines to give a better sense of the mission. There will be a lot of news online as well as in conventional media.
We haven't been seeing many new images for a few reasons. The distance means it takes over four hours for a light to travel from the spacecraft to rather sensitive antenna on Earth. The weakness of the signal dictates a very low data-rate. Most of the images have to be stored on the spacecraft and then transmitted over time. A lengthy feast for planetary science.
Second is the release of Frank Wilczek's new book A Beautiful Question: Finding Nature's Deep Design. I've seen pieces and it should be wonderful - an exploration of the cosmos as a work of art and a mediation on the beauty we perceive.
unbundling will probably happen and will have some extremely messy fights - probably in the courts. In the meantime over the top services will continue to improve. At some point, probably sooner than the cable guys think, cable cutting will be a big thing. Then they'll resort to data caps.
Why do we still use cable tv? A nice piece by Horace.
And so over a period of about 40 years, watching TV went from free to quite expensive. More expensive even than a family’s communications costs (i.e. telephone service.) That’s quite an achievement at a time when technology diffusions caused huge price reductions in other goods and services. Consider that the TV set used to watch the programming improved dramatically while decreasing in price over the same period.
Meanwhile, some of the benefits began to be less relevant. Commercials are more abundant than ever. Ad buyers spend about $60/month per household to deliver ads The quality of the TV picture is actually worse due to compression than one might get with over-the-air digital broadcast. Finally, the abundance of channels is beyond anyone’s absorption rate. Those channels which used to be “pure” became polluted and undifferentiated as each tried to be the other.
On top of these paradoxes is the fact that actual penetration of the service has been declining. As the graph above shows, Cable TV has declined (though Pay TV much less so). The industry has reached saturation decades ago and has not offered anything meaningful in terms of innovation.
Early adopters cut the cord years ago and haven’t looked back. For me, turning off cable TV was an idea I flirted with, yet I just kept renewing my package deal for some reason.
But there has been no better time to finally severe ties with big cable, and their pricey television packages that have you paying for hundreds of channels when you only watch a handful of shows – many of which you’re probably already streaming on Netflix or Amazon.
I know there are people out there weighing the decision, too. So here’s my entirely subjective, totally personal take on what it’s been like to cut the cord in 2015: my personal diary of being a newbie cord cutter this year. The focus of this diary is largely on television, with less emphasis on sports and movies, though they are addressed.
Everyone has their own reasons for cutting the cord, but my decision was both financial in nature, as well as based in common sense. I spend more time online than sitting around mindlessly watching television, outside of a few favorite shows. And there’s so much quality TV content being produced these days that I have a massive selection of new shows to choose from after I binge watch my way through one series and need to move on to something new.