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#2 Posted on 23.10.03 2017.54 Reposted on: 23.10.10 2018.23
This could get very interesting.
On the one hand, there's NO way Cox pulls ESPN and FSN for an extended amount of time. Because if they did, I'd be looking to buy DirecTV stock real quick, because there would be a rush on satellite service when it happened. And it seems that Cox realizes that. They know that they're essentially powerless to these rate increases,and are taking it to the public.
On the other hand, if Disney and Fox agree to the tiered pricing schedule, it could finally lead to a la carte cable service, where customers only pay for the channels they want. And I'd bet people would pay more than they should for that. And if it were cable-exclusive, it could bring some people back from satellite. I mean, it wouldn't bring *me* back, but still...
Guru, you've mentioned before that you work in the cable industry, if I recall correctly. Does this rate increase that Cox is concerned about affect satellite providers as well? Considering the installed base of satellite subscribers is significantly less than cable subscribers, wouldn't it stand to reason that the per-customer price increase would be greater for DirecTV and Dish than a Time Warner or Cox?
#4 Posted on 23.10.03 2246.05 Reposted on: 23.10.10 2248.45
I find it unbelieveable Cox is paying $2.61 a month per subscriber (quote in CNN story).
If that's true, if ESPN accounts for 18 percent of the company's programming costs while being responsible for only 4 percent of its viewing (quote from Forbes.com), I wouldn't blame them, and every cable and satellite provider, from moving ESPN to the premium sports tiers. Let ESPN's revenues fall to the people willing to pay for those tiers.
I suppose it all falls into the direction professional sports in general has gone. Every cost on every level has skyrocketed to ridiculous levels, but people are still paying for it.
#5 Posted on 24.10.03 0002.20 Reposted on: 24.10.10 0004.43
I assume that Cox can't just lie about their costs - they are a publically traded company. Wouldn't the SEC zap them if they were lying? ESPN is only speculating about Cox - they aren't denying that Cox is telling the truth about the $2.61.
Check out this graphs on this page - the seem to back up what Mr. Heel was saying.
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#7 Posted on 24.10.03 1020.41 Reposted on: 24.10.10 1021.41
Originally posted by SimbaFox Sports has proposed a 35% rate hike in 2004 for Cox's carriage of Fox's regional sports networks in 11 cable systems representing about 3.3 million customers.
You mean I would have to pay 35% more for 6 episodes a day of the Best Damn Sports Show?
Pretty much. I remember about 5 years ago my cable company sent around a letter breaking down what the increase was attributable to. It was nice to see but someone must have gotten hold of it because it was the last time that happened.
About 10 years ago I used to work for a large cable company and what Cox is bitching about is true. The popular cable channels have a grip on the cable companies. Channels like ESPN and CNN basically dictate what they want to charge. This is the reason cable companies are trying to inrease their size. They believe that the more subscribers they have the more power they can wrest from the programmers. If they have a significant amount of customers they can turn the tables and say that if they want to show their channels to their customers the increases will be much smaller.
Another trick the programmers use is to offer a new channel for free in return for smaller increases. Like ESPN offering to drop the increase to 7% if the cable company agrees to carry ESPN News for free.
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