ESPN chief John Skipper is happy to talk to any of the so-called new over-the-top Web video players surfing around the fringes of the cable TV business. But he doesn’t see any major deals happening soon — if ever.
Will Big Media and Big Tech companies ever stop punishing their biggest fans?
Like many people, I woke up yesterday and reached for my iPad for my morning hit of news, entertainment and information, so I could start my day. (And like many, I’m embarrassed to admit it.) Padding to the front door to get a newspaper still sounds more respectable, but my iPad gives me a far more current, rich and satisfying media experience than a still-warm printed Times could ever produce.
We had the pleasure of incoming ESPN President John Skipper’s company on Monday at the Reuters Media Summit in New York. Skipper, whose promotion was announced just ahead of Thanksgiving Day, had been the No.2 to George Bodenheimer, now promoted to executive chairman.
In the last few years ESPN has become the 800-pound gorilla in the pay-TV industry through its mix of exclusive sporting licenses with many of the top sporting leagues and events. But those deals cost money — like the eight-year NFL TV rights that cost $15.2 billion. Even Skipper, in his first interview since his appointment was announced, acknowledged the deal as “expensive” but added the caveat that ESPN generates great value from NFL rights.
The high cost of sports programming is one reason ESPN is the most expensive cable network in the US at around $4 per subscriber. Most cable networks charge a lot less than $1.
But Skipper is adamant that ESPN is worth every penny and pushed back strongly at any suggestion that cable companies could create new tiers to help customers pay less if their package don’t include ESPN.
“It’s demonstrably true that ESPN provides more value to our distributors than any other network — by far, there’s not a close second. If you survey cable, telco and satellite customers they believe ESPN provides the most value. The distributors themselves believe we provide the most value.
I reject the notion (that ESPN high cost should see it placed on higher priced tiers). I think the current package of pay-TV products that comes through on basic cable is a high value proposition to the consumer I don’t think breaking them up is going to provide the consumer better option. If they become broken up in an a la carte world the individual channels are going to more expensive. Consumers would get less channels and pay more money.
Every distributor will do deals with us because they believe the best protection I have against cord-cutting is having ESPN.”
Many media business journalists let out a collective sigh of relief at the news that Time Warner Cable had finally inked its deal with Walt Disney to keep carrying its programming, including ABC, Disney channels and various ESPN networks. The programming fee negotiations had gone late into the night past their Wednesday midnight deadline and hacks, who had seen this movie before, were just starting to tire of waiting for another midnight watch.
from Summit Notebook:
Here are some of the day’s stories about the media industry:
Amazon Patents Detail Kindle Advertising Model (Mediapost)
Laurie Sullivan writes: “The patents clearly note that Amazon would insert advertisements throughout the ebooks, from the beginning to the end, between chapters or following every 10 pages, as well as in the margins.”