February 1, 2016
Cable programming is increasingly relying on sports programming to keep people from cutting the cord. In the past several years, cable TV companies paid ESPN two to three times as much as they pay any other network for broadcast rights because of how large the ESPN viewership base is. While people can easily subscribe to streaming services like Hulu and Netflix to get TV shows, people generally want to watch sporting events live. The desire to watch the event live is also paired with the fact that if it is not watched live, someone will surely post about the game on social media which is a huge spoiler for the avid sports fan.
If people want to see their favorite team play, cable TV service is generally required, but seasonal and one-off sports programming may be changing that. Some of the most popular examples of these sports offerings are NFL Sunday Ticket, MLS Live and NBA League Pass. These services allow people to see out-of-market games that are not available through regular TV programming. For example, if someone lives in Ohio but wants to see an Orlando Magic game that won’t air locally, they can still watch it with the NBA League Pass.
Until recently, anyone that wanted these services had to get them through their cable TV operator. Now, all three of these services are available through an app or a streaming device, like an Apple TV or Xbox. If someone is a sports fanatic, they have the option of paying just for sports directly without getting a service provider involved. The days of bundling cable with everything might be over as sports channels being able to be bought through different parties could cripple the cable industry.
Being able to watch sporting events without having to sign up for cable TV service is just one problem for the industry. There’s also the issue that these season passes may also be devaluing regular programming and causing households to only pay for cable programming during certain times of the year. These times depend on the sport of choice for the household. If college basketball is the sport of choice then having these sports packages during the NCAA tournament is necessary.
There’s something about watching the game on a large screen TV, so not everyone will opt for a sports pass without cable service. Still, that doesn’t translate to year-round subscriptions from sports fans. Most cable operators offer basic cable services that only include local programming for a significantly lower price than they offer local and basic packages. There are even people that sign up for a cable package just to get the sports programming for free then they cancel their subscription to the cable company as some have started giving people a trial period.
As a result, numerous households are in the habit of subscribing to basic service and special packages during a sports season and then downgrading to bare bones throughout the rest of the year. In fact, this has become so much of an issue that many cable companies are now charging downgrade fees in an effort to deter subscribers from abandoning more expensive services for part of year. These types of fees are another reason that people are straying away from cable. The hidden fees and rate increases after the first year of a contract are frustrating. That combined with some cable companies having legendarily bad customer service, cable might just be on its way out if something doesn’t improve.
While specialty sports offerings may be a potential revenue source for cable providers, they appear to also be doing just as much damage as they are good. If the cable companies aren’t careful, they can cripple their businesses with these sports packages being offered.
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