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ESPN, which laid off 100 people this week, has a multitude of problems, but the basic one is this: It pays too much for content and costs too much for consumers.
That didn't used to matter because, thanks to the way the cable industry "bundled" channels, cable customers were forced to pay for it even if they never watched it. Now, however, as the cable bundle slowly disintegrates, it matters a lot.
[...] But it's a pipe dream to think that ESPN will ever make the kind of profits ($6.4 billion in 2014) that it once did, for two reasons. First, as is the case with so many other industries, the internet has both shined a light on the flaws of the cable model and exploited them. What was the main flaw of the cable model? It was that consumers had to pay for channels they never watched.
And now they don't.
It turns out that there were lots of people, including sports fans, who resented having to pay for the most expensive channel in the bundle. The popularity of streaming led to "cord cutting," but it also caused cable companies to begin offering less expensive "skinny bundles," some of which don't include ESPN.
(Score: 0) by Anonymous Coward on Tuesday May 02 2017, @07:19PM
And I am thankful for this change. I remember when I was a kid in the 80's and baseball was on all the time. WUAB in Cleveland ran Indians games constantly despite the fact there were only 6 people in the stands. By the time the Series began in the fall, I was sick to death of baseball. Not everyone feels like every single game is a "can't miss" event when there will be yet another one tomorrow night. I feel no compulsion to memorize statistics, players, or anything else spectator sports related. In fact, I just don't give a shit.
Rising cable costs, driven by unavoidable sports bundles, caused me to jump ship years ago. Now I stand back and laugh as the sports Ponzi begins its inevitable crumble. As more and more people like me pull out of subsidizing the sports junkies' fixes, sports addicts are forced to bear their own full cost of the greed they fostered among players and owners alike. Eventually, the price themselves out of the market. That's where professional sports are headed. Demand is not completely inelastic even among the addicts.