Sports Conundrum: Top Content, Distribution Gurus Debate Value, Models; CableFax Daily

Article by CableFax Daily

News flash: Sports content costs are going up, up, up. But can it continue? Will distributors and consumers rebel? How
long before everything implodes? “It’s beyond complicated,” said DISH svp, programming David Shull, speaking Tues
at the Silicon Flatirons Center in Denver. “But at some point there’s got to be breaking point here&#8230 It’s not something
that’s sustainable, and that’s what’s concerning.” Shull and other panelists gathering for the U. of CO law school event
agreed that rising sports costs have become a, uh&#8230 political football. But as might be expected, how they see the
problem varies greatly depending on where they sit. ESPN evp, sales & marketing Sean Bratches framed it as more
a perception issue rooted in the industry’s inability (or unwillingness) to tout cable’s overall value. “We’ll continue to
have this debate about alternatives unless we focus on the value that we provide,” he said, noting that “the market has
spoken” based on the fact that people haven’t cancelled cable subscriptions en masse to protest pay TV costs. Still,
distributors now face tough choices, said Time Warner Cable evp/chief video and content officer Melinda Witmer. “We
are going to have to be more selective” about what nets to carry, she said, arguing that distributors can’t raise prices
indefinitely&#8212especially with sports leagues starting their own cable nets and even selling content direct via online
packages to fans. “There will be tug and pull around what it will make sense for us to spend money on,” she said. She
acknowledged the public’s desire for a-la-carte pricing schemes, “none of which are viable economic models.” So
where does that leave the industry? Still banking on authentication. “It’s very clear that customers want their sports and
general entertainment on all these different devices,” said Shull. “We want to make sure that relationship stays intact.”
— Surprise, surprise. Just when many thought digital video was hurting traditional TV, it turns out that digital content
has helped boost it, at least according to Silicon Flatirons Center panelists. However, launching a new linear TV net
these days is almost impossible, said Charter svp Allan Singer. “It’s too hard to be on that track even if you get millions
of subscribers,” he said. Existing linear nets need to be creative with their business models to survive, said Lionsgate
pres Jim Packer. In terms of the growth of digital video and the potential disruption it brings to traditional TV, panelists
were somewhat optimistic. “TV has new fresh content all the time, especially with regard to sports,” said NBCU evp,
content distribution Matt Bond. He said NBCU’s London Olympics digital effort actually helped traditional TV viewing.

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