I think this could be a big story for 2013.
Sports networks are spending billions on rights fees thanks mainly to you and me. Your cable fees eventually go up to help pay for all that NFL, MLB, NBA, NCAA we all consume. ESPN now charges $5.13 per month for each subscriber.
At some point, the already frustrated cable operators will say enough is enough. It could happen sooner than later.
The issue is starting to build some momentum.
From a recent LA Times story:
The average household already spends about $90 a month for cable or satellite TV, and nearly half of that amount pays for the sports channels packaged into most services. Massive deals for marquee sports franchises like the Dodgers and Lakers are driving those costs even higher. Over the next three years, monthly cable and satellite bills are expected to rise an average of nearly 40%, to $125, according to the market research company NPD Group.
So far, people seem willing to pay. But the escalating costs are triggering worries that, at some point, consumers will begin ditching their cable and satellite subscriptions.
“We’ve got runaway sports rights, runaway sports salaries and what is essentially a high tax on a lot of households that don’t have a lot of interest in sports,” said John Malone, the cable industry pioneer and chairman of Liberty Media. “The consumer is really getting squeezed, as is the cable operator.”
From Multichannel News:
DirecTV Exec VP/Programming & Chief Content Officer Dan York: “We would love to make all of these channels available to our customers, but the sports programmers are making it impossible with their unreasonable, unsustainable prices.”
Derek Thompson of The Atlantic recently wrote that non-sports fans should start pushing back. They are paying for content they don’t want.
He writes:
Maybe DISH will decide it won’t pay the high costs that ESPN and regional sports networks demand and will become synonymous will “cable for people who hate sports.” That way, households in an area served by DISH and Comcast can choose between sports and not-sports, and if more people choose not-sports, then sports networks will necessarily slow their inflation rate to keep from upsetting sports fans who suddenly get stuck with a higher bill.
Will Leitch of Sports on Earth adds:
We live in an information-wants-to-be-free age, and we’re still being held down by these media-company gatekeepers. In the real world it’s 2012; in the cable universe, it might as well be 1988. Eventually, this will have to change. It’s too insane and rigged-against-the-consumer for it not to. The problem, of course, is that, like so many capitalists before them, leagues and teams and sports networks are all assuming that it’ll always be like this, that these revenue will keep growing forever and ever, that this golden goose will always keep laying eggs. There are decades upon decades of Darwinian consumer trends that contradict that. In 30 years, we may have all unplugged our cable bundles and be paying a la carte. This is the nightmare situation, but I’m not the first person to suggest we’re living in a cable sports television bubble. Someday it’ll pop. Then, suddenly, we’ll look and think: Why in the world is Maryland in the Big Ten?
Keep an eye out on this. And be sure to watch what happens to your cable bill.