Thursday, December 13, 2012

Sports Deemed Culprit Of Cable Subscription Increases

Remember the days when sports telecasts were only on broadcast networks and the costs were paid entirely by advertising?  If so, you live in a different generation.  Today, most sports telecasts, except for the major telecasts, are on cable.  And with the launch of more and more "sports" networks, we have more regional sports networks like MSG, NESN, and others, more professional league networks, from MLB, NFL, and others, and of course basic sports networks like ESPN, Versus (now NBC Sports) and others.  For sports junkies, every professional, college, and yes even high school games can be found on cable television.

But each of these channels have license fees that the cable operator and ultimately the subscriber ends up paying.  "Sports costs are driving up bills, with cable and satellite-TV providers paying increasingly higher rates to carry national sports channels such as ESPN, as well as regional channels like the YES Network." And according to the NY Post, rates over two years are expected to increase over 16%.  That is far greater than the cost of inflation and worse, hitting households facing smaller after tax budgets.

Some cable operators are trying to move sports to separately priced tiers so only consumers interested in buying them would spend the extra cash.  But most of these networks prefer to be on the first level of service reaching the largest possible audience.  But their costs are driving away customers to basic cable.  The result, cord shaving (taking less services) or worse, cord cutting and dropping their cable subscription entirely.

But the fault is not only with sports networks.  Cable operators face annual increases in fees for non-sports networks as well.  And with broadcast networks like ABC, CBS, NBC, Fox, and even Univision getting cable operators to pay them a retransmission fee for carriage, free TV is a misnomer. With operators not likely to reduce their profit margin on their cable subscription business, monthly subscriber fees will only continue to rise and rise.  And consumers will respond by cutting the cord and using broadband to access content that they specifically wish to buy and watch.

So the article blames sports networks, but they are not the only cause.  Each network seeks higher and higher license fees and as consumers, we all pay the price.

No comments:

Post a Comment