You’re Paying for ESPN, Whether You Want To or Not
Just as it has been for a few years now, if you pay for cable, a significant hunk of your bill is going to pay carriage fees for sports, according to an article by Peter Kafka on All Things D. (Which, of course, is very annoying if you’re one of those people who never watches sports.) According to data from SNL Kagan and Barclays, sports television, and specifically ESPN and its satellite networks, demands the highest rates per customer. ESPN alone demands about $5.06 per customer from every subscriber who has the channel as part of their package (and its a standard part of most basic cable packages). As a point of comparison, the ad-free Disney (NYSE:DIS) Channel charges $0.97, and USA, one of the most popular channels on basic cable, only $0.62!
While the complaints from customers and other cable channels have always been there, the time may be coming where customers may be allowed to seek more specialized options. Certainly, there is always the chance that a rogue cable provider may allow you to break up a bundle and only go after groups of channels one would be interested in – which has long been the dream of many cable customers who could care less about mainstream sports. It’s also possible that one of the main internet providers such as Netflix (NASDAQ:NFLX), Microsoft (NASDAQ:MSFT), or Google (NASDAQ:GOOG) could offer a significant “web TV” option within the next year or two.
With that said, in regards to most cable systems, this will remain the status quo. ESPN is widely considered a destination channel, and Disney, who owns the channel, keeps it tightly bundled, not only with other ESPN networks, but also the extremely popular Disney Channel. Disney seems unlikely to change that any time soon, and many cable providers, like Comcast (NASDAQ:CMCSA), having been signing long term deals in order to prevent fees from rising any higher than they already have.