For anyone who pays for a traditional cable television bundle, sports are a large chunk of the expense. ESPN is the most costly channel on cable, and with one or two dozen other sports channels on most dials, the price tag gets pretty high.

That’s why, according to Bloomberg, several cable programmers including Viacom Inc., Discovery Communications Inc. and AMC Networks Inc. are in talks with distributors to create a new non-sports package. Via Bloomberg:

The media companies have explored offering entertainment-only packages over the internet with four to six pay-TV providers, said one of the people, who asked not to be identified discussing the private negotiations. The talks are at various stages, but at least one service could be introduced this year, the person said.

Channel owners hurt by subscriber losses want to be part of new web-based video services as people drop pricey pay-TV packages for cheaper options, yet some have been left out of new “skinny” bundles. Viacom and Discovery, for example, aren’t part of YouTube’s live TV service or Hulu’s upcoming package. While sports is the most popular live programming, it’s also the most expensive.

According to Bloomberg, the non-sports bundle would cost less than $20 a month, far less than services offered by Hulu and YouTube, which rely heavily on sports programming.

The prospect of cable companies proceeding without sports must put a scare into ESPN and every other sports channel. Sports networks have benefitted from the cable bundle as much as anyone, reaping huge subscriber fees from viewers who’ve never watched a football game in their lives. A package that allows non-sports fans to bypass ESPN et al. would be a big blow.

Clearly, the cable bundle is on its way out, thanks to the glut of online streaming options and the inevitable cord-cutting that comes along with that. The question is, what will the next model look like? And it seems as though viewers might soon be forced to choose between paying a ton for sports or not watching sports at all.

[Bloomberg]

About Alex Putterman

Alex is a writer and editor for The Comeback and Awful Announcing. He has written for The Atlantic, VICE Sports, MLB.com, SI.com, the Hartford Courant, Baseball Prospectus, Land of 10 and more. He is a proud alum of Northwestern University and The Daily Northwestern. You can find him on Twitter @AlexPutterman.

  • Lee

    Alex, you are waaaaaaaaaay underplaying what this means to ESPN

    Words like ‘scare’ ‘big blow’
    and saying that ‘benefited ESPN’ go nowhere near describing what you are discussing in this story.

    I know you know this even better than I do, but maybe some of your readers don’t so let me humbly add to your story.

    To be clear, this is an EXISTENTIAL THREAT to ESPN, if this happens and is taken advantage of by large numbers of Subscribers then ESPN as we know ceases to exist, you should sell any Disney shares you own and even the sports Leagues like the NFL and NBA as well as the Revenue Sharing players should be shaking in fear at this story.

    ESPN currently pulls in subscriber fees from all 100 million of the Cable subscribers in America, even though less than 10 million of these people regularly watch the channel. If they lose their $7 per month (I think its $7, it may be $5) from those 90 million people then ESPN suddenly operates on a totally new revenue model, their will be mass firings, the rights fees they pay for live sport will have to be slashed and basically they will have to completely change their entire business model.

    This would be the greatest change to hit ESPN since its birth, it is impossible to overplay the size of this story and a site like AA will derive heaps of content from this change in the short-term as the whopping changes it will force on the Network will lead to a flood of story’s for you guys.

    I can’t believe how calmly and matter of factly you are reporting this news, again, this is the biggest ESPN story you will read this year.

    • Tookie Clothespin

      I think that you might be overselling it a little. Your facts and numbers are basically correct but, this is still an internet only package that is only involving a few channels. These kinds of things already exist and although they are making a dent it’s not an earth shattering dent. There are two problems that I see with this. First, you pay less but, you also get way, way less. What’s the incentive to go this route? Save money. But, at what cost? You get less bang for your buck. This will only really appeal to the target group that they already specified in the article. The people that have already cut the cord. The second is say you want Disney Channel for your kids? Well Disney is going to require you to also buy ESPN and all of the other channels that they own. Want Nickelodeon for your kids? Buy all of the Viacom channels. TNT? But all Turner channels.
      That would be my problem. I only watch about ten out of 300 channels that I get. But, they are all owned by different companies. So, something like this does nothing for me. Obviously I can’t speak for everybody but, I’d be willing to bet that this is a very common problem and when discussing this issue most people don’t take into account. Until they offer everything that cable offers but, at a much better cost it’s still going to be this same slow trickle away from cable.

      • Lee

        You very well could be right, its not like I am some kind of Cable TV expert, but I see this as the thin end of the wedge.

        Once they establish the concept of al la carte channel selection with Cable it is only a matter of time before it moves from their Online offers to their general Cablle Package. And once you can decide I don’t want sport that is the end for ESPN as we know it.

        I mean it is not like there are people out there (or not many at least) who will want sport channels but not ESPN, once you can choose a package which is something like Drama/RealityTV/Documentary/Music and are not forced into a basic core package containing CNN/ESPN etc then millions, even tens of millions of people will jump on that if it saves them even $10 per month, but it appears likely to save people $30+ per month, and if i’m even half right and 40 Million People stop paying their $7 per month for a service they don’t use, well ESPN will have to fundamentally change. Disney see’s ESPN as their cash cow, that gives them the cash to spread to other projects, I wouldn’t be suprised if it was ESPN Profits that gave them the $ to take a risk on the MCU. Disney will have less money to invest in the creative/new ideas part of their Business, but ESPN will be hardest hit, it will be a 1 Billion Dollar a year hit if they lose those Subscriber Fees (maths done in my head & its 4am here in Australia, pls feel free to correct me if I am wrong)

        • Tookie Clothespin

          Fair point. If 40 million people stopped paying for ESPN that is around $3.4 billion per year. The thing that I think will stem the tide of that is live sports. ESPN has there grips on many live events for years to come still which should, if they are run by anybody with a brain, give them time to address the changing landscape. People might get their highlights online but, there is still a large market for people that want to watch live. Maybe not everything (I’m not a big college football fan but, I watch every NBA game that ESPN airs) but, if you are sports fan they have something for just about everybody to have a reason to tune in at one point or another. To me the real ESPN killer is if any of these online companies like Amazon or Netflix start competing for live sports rights. If so, ESPN is finished. Netflix has around 100 million subscribers that pay anywhere from $8.00-$12.00 a month. They are bringing in around a billion dollars a month before expenses which means that they could afford to buy the rights to some of these live sporting events if they would want to. Once that happens I think then you’ll see the mass exodus away from cable that everybody seems to be predicting.

          • EJ95835

            Amazon will provide live stream of all NFL Thursday night games next season. All those games are also being broadcast OTA. This means NFL fans will be able to watch from anywhere via mobile app. Not ground-shaking, but it’s the start you’re looking for.

          • Tookie Clothespin

            I’m waiting to see numbers from that. Thursday night football is, generally speaking, a pretty awful product. And ratings for it have not been spectacular. Good but, not great. As conservative as the NFL is in their thinking if the streaming numbers aren’t good I could see them run from streaming quick.

          • Lee

            but this is the point though mate, currently there are approx 90 million people who pay for ESPN because it is part of the Basic Cable package who literally never go to the channel, live sport or not, they dont care because they arent sports fans, they are the ones ESPN will lose if it goes A La Carte and they will take that $3.4 Billion with them, hence it being an existential threat

          • Tookie Clothespin

            90 million people pay for it and at any given time 89 million people aren’t watching it. But, that doesn’t mean that they never watch it. The person that watches it at 6am is different from the person that watches at noon who is different from the person that watches at 1am. True, there are some heads of household that don’t come within a mile of the channel. But, what about their kids? Or their significant other? I have a couple of friends that have cut the cord but, come NBA playoff time (which starts Saturday) I have to kick them out of my house because they are there so much. And if it wasn’t my house they would be somewhere watching the games that ESPN airs. A number that I would be far more interested in is how many unique viewers ESPN gets on a weekly basis. If it’s only 20 million or less then it’s the problem that you are saying it is. If it’s 80-85 million (which I doubt, but I’m going with it for the sake of argument) then it’s not nearly the problem that this article makes it since most of their subscribing households have someone in them that gives the home some reason to at least consider paying for it since they frequent the channel. I get the idea of a A La Cart channel packages as a threat. I’m not denying that. But, there’s already Roku, Apple TV, Fire TV, and others that offer something similar to this and I’m not sure that they are doing that much damage to cable numbers. It’s time to rethink some things, but I don’t think that it’s time to start panicking. Yet. ESPN was still Disney’s biggest money maker last year. It’s not time to start panicking.

          • Lee

            The 10 million is the Unique Viewers number, now I am not sure if that is Unique Viewers per month or per year, though I work in Analytics and I can tell you that that for our businesses website at least, the Unique Visitors for a year is nowhere near 12 times the Unique Visitors per month, in fact more like 8 times and that is for a retail website which would have many more reasons for visitors to only come on at one time a year than a TV channel does. It is accepted fact in TV circles that there are 80-90 million people paying for ESPN who never use it. You bring up the anecdotal evidence of NBA Playoff time, but don’t forget the 120 million number they always give for the Superbowl, means that 2/3 of Americans do not even watch the most hyped Sporting Event of the year. It is easy to fall prey to confirmation bias due to our lives and our friends, but remember there are a couple of hundred million people in America who care nothing for sports, many of these people have Cable for the movies, family programming, documentarys or cartoons. But because ESPN is part of the basic package they still pay for it (the same way I pay for a whole bunch of lifestyle channels I have no interest in watching and never have)

          • Lee

            The one massive advantage all those Live Sports rights give them is that with the DVR/On-Demand society now, live-sport is just about the only thing that forces you to watch ads. This will have 2 benefits for ESPN that I can see, one is the obvious, they will be able to massively jack-up ad rates for live-sport because it is the one thing they can guarantee to advertisers that people will not fast-forward their ads.

            The other advantage it gives them, that people do not yet see, is the ESPN.com is one of the highest traffic websites in the world, as this On-Demand/DVR culture becomes more apparent, the current advertisers on TV are going to start moving more and more of their advertising online (especially if more websites take the YouTube route of forcing you to watch ads before accessing the content) currently online advertising is ridiculously cheap (I work for a large online retailer) and with its ability to micro-target can be incredibly effective on a cost per person basis.

            Take Facebook as an example, you can geo-target, interest-target, demographic-target people to incredibly precise degrees, want to target people interested in Fly-Fishing who live within 20km of Cleveland and are 25-35 year old males with kids, you can do that really easily, as in you personally could learn to do it in about 20 minutes, so imagine what the Nate Silvers of the world can do with complex algorithm’s . Then comes the cost, to target 2400 of these people costs $7, yes that is $7 so you can target 240,000 of these people for $700, or 2.4 million for $7000. Compare that to Half-Page newspaper ads, that most people just flick past and are in no way micro-targetted to your audience and you can see what I mean by how cheap they are.

            There has to be a correction, these prices have to go up, and when they do ESPN.com will be able to jack up their prices and still offer Facebook style micro-targetting (notice all the questions they ask when you register your details, then add in the cookie information that we all, including me, mindlessly accept) When these prices do increase to levels that frankly they should already be at, and when they become more sophisticated in the ways they force you to at least watch the ad, never mind interact with it, then ESPN.com will become as much of a money-spinner, advertising-wise as the TV stations, or at least the equal of everything outside of live sports on the TV

  • America4Sale

    What’s so bad about ESPN getting a financial haircut? It might impact the size of future television contracts for the major sports leagues, but why should we care? Does it make any difference to you if your favorite player makes $10 million per year instead of $30 million?

    • Chris Konieczki

      whatever gets Jemele Hill fired works for me

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  • Eldjr

    Now if we can just draw an “X” through CNN, ABC, CBS, NBC and MSNBC, Cable/Satellite might be worth it.

    “What do we want?”
    “Ala Carte Programming!”
    “When do we want it?”
    “NOW!”

    I’d love to see what free-market competition would do to the reporting in this country.