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How can an internet-only ACC network make money?

Sean Miller Fan

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We keep hearing that the ACC network may be internet-based and not a traditional channel like the SECN or B10N. For the life of me, I cant understand how that would make any type of considerable money

Consider the business model of linear channels like B10N or SECN is to get $1 per subscriber from EVERY cable household in their regions. So while that diehard Alabama fan is way underpaying for SECN. The 30 year old artist living in Chicago who has never watched a college football game, is way overpaying for B10N......but that's how this works. EVERYBODY pays.

So, with an internet-based channel, there is no "carriage fee." So, right there, you lose almost all revenue. And because distribution is so much smaller, you cant charge as much for commercials.

So, it seems like it would have to be subscription-based. But that's a problem because only diehards would buy, whereas EVERYBODY pays $1 for the other networks.

So, if we use hypothetical numbers, if the network gets 500K subscribers (which I think is overestimating) and they charge $50/year, that's only $1.7 million more per team.

I think internet-based networks are a good idea for leagues that have a niche audience like the WWE, rugby, cricket, less poplular soccer leagues, etc because you can charge diehard fans of those leagues a lot of money to make it worth it. For a major college football league, you have tens of millions of Americans who would watch it if its on TV, but not nearly as many willing to pay to watch it on an app. The guy living in OK may turn on Pitt vs UNC because its on cable but not a chance in this world, he is paying to watch it on an app.
 
On the other hand, if cable is truly a dying breed, and subscribers are ditching it by the millions each year, how is the old model going to be able to sustain the revenue they are generating now? With less viewers, advertisers are going to be paying less, and the next negotiations for carriage fees are probably going to yield less revenue as well.

These are smart people running these businesses. The internet/app based technology revenue generation could be completely different in a few years. If people are cutting cable and going to these apps, eventually they will be paying just as much if not more to watch these events. Businesses like ESPN/ FOX/ etc know how to make money, whether it's the traditional way like now, or somehow in the future. The customers may be saving money now during the technology transition, but at some point in time, they will be paying just as much.

ESPN could be releasing it's own Netflix type channel and combining digital broadcasts together in a package to make it more enticing for people to sign up. They just purchased part of the MLB digital network and could be adding the ACC in there as well. And if they do that, I could see them dropping ESPN3 and making people pay to watch that content going forward.

It's interesting times right now in the cable world. There are very smart people on both sides working on not only making money for the ACC, but ESPN as well. It will generate revenue. The question is how much and when.

And on top of that, no one really knows what these ESPN/ACC network project will be and what it will entail. We just pretty much know that it will be happening.
 
On the other hand, if cable is truly a dying breed, and subscribers are ditching it by the millions each year, how is the old model going to be able to sustain the revenue they are generating now? With less viewers, advertisers are going to be paying less, and the next negotiations for carriage fees are probably going to yield less revenue as well.

These are smart people running these businesses. The internet/app based technology revenue generation could be completely different in a few years. If people are cutting cable and going to these apps, eventually they will be paying just as much if not more to watch these events. Businesses like ESPN/ FOX/ etc know how to make money, whether it's the traditional way like now, or somehow in the future. The customers may be saving money now during the technology transition, but at some point in time, they will be paying just as much.

ESPN could be releasing it's own Netflix type channel and combining digital broadcasts together in a package to make it more enticing for people to sign up. They just purchased part of the MLB digital network and could be adding the ACC in there as well. And if they do that, I could see them dropping ESPN3 and making people pay to watch that content going forward.

It's interesting times right now in the cable world. There are very smart people on both sides working on not only making money for the ACC, but ESPN as well. It will generate revenue. The question is how much and when.

And on top of that, no one really knows what these ESPN/ACC network project will be and what it will entail. We just pretty much know that it will be happening.

Right now though, I am asking how a network like this can make money. Can you give me some ideas?

Remember, if times get tougher in the cable industry, all it takes is a flip of the switch to make the B10N or SECN a subscription based app only. So, my point is, launch a linear channel, charge 50 cents or 75 cents per subscriber, get rich for 5-10 years, then if/when the cable model completely dies, then make it app only.
 
Right now though, I am asking how a network like this can make money. Can you give me some ideas?

Remember, if times get tougher in the cable industry, all it takes is a flip of the switch to make the B10N or SECN a subscription based app only. So, my point is, launch a linear channel, charge 50 cents or 75 cents per subscriber, get rich for 5-10 years, then if/when the cable model completely dies, then make it app only.
Whatever they finalize needs to have layers & options, with flexibility for the future. Sorta the antithesis of the BE mess.
 
Right now though, I am asking how a network like this can make money. Can you give me some ideas?

Remember, if times get tougher in the cable industry, all it takes is a flip of the switch to make the B10N or SECN a subscription based app only. So, my point is, launch a linear channel, charge 50 cents or 75 cents per subscriber, get rich for 5-10 years, then if/when the cable model completely dies, then make it app only.
Yep that is all it takes, a flip of the switch......If nothing else you are an entertaining lad
 
People still like TV, still like cable. This "transition" to online streaming is not as close as you guys think.
 
1) It's not as simple as a "flip of the switch". There are contracts signed with advertisers, other broadcast stations (don't forget there is a CBS component to the SEC and FOX/ESPN will be splitting BIG), that have exclusive windows where they can show events, etc. Cable companies are signed on that will want to honor what they are showing, etc. It's not that simple.

2) It cost a ton of money to start up a channel. They aren't just going to start one up if it is not going to make money long term just to change the model in a few years if that. They are gong to go the route that will make them the most money long term, not short term.

As for ideas, I don't know. Again, they may feel the traditional channel is the best way to go with some digital aspects. We don't know that yet. But if that is not part of the plans, then they have determined digital is the best route to go long term into the future. These are the guys that know the business, know the sensitivities, know which levers to pull to balance everything.

If the schools are happy, the ACC is happy, and ESPN is happy when they announce this, I will trust them, regardless of what it is. It may not be a printing machine right away, but if they feel it is the long term best route, then again, I trust them.

Everyone laughed at the BIG and Delany for starting their own channel, all the struggles it went through for the first few years, but now it is the standard bearer. The next thing whatever the ACC might do could be the same.
 
Everyone on this site and EVERYONE who is a real sports fan should be doing absolutely everything they can to maintain bundled cable. If it goes, you will pay astronomically more money to continue to watch all your sports. Want the option to watch NFL, NBA, NHL, NCAAF, NCAAB, and MLB games? Get ready to shell out at least $1000 a year for that stuff before you even start paying for other channels that you and/or your family wants. Those $150 bills become $300 a month real quick.

The family man who likes to watch sports is going to get killed if the bundle dies.

People still like TV, still like cable. This "transition" to online streaming is not as close as you guys think.
Agreed.
 
Everyone on this site and EVERYONE who is a real sports fan should be doing absolutely everything they can to maintain bundled cable. If it goes, you will pay astronomically more money to continue to watch all your sports. Want the option to watch NFL, NBA, NHL, NCAAF, NCAAB, and MLB games? Get ready to shell out at least $1000 a year for that stuff before you even start paying for other channels that you and/or your family wants. Those $150 bills become $300 a month real quick.

The family man who likes to watch sports is going to get killed if the bundle dies.


Agreed.

Yep. Agree.
 
Networks don't charge for commercials based on distribution, they charged based on the expected number of viewers. If they don't get the expected number of viewers they generally either have to refund some of the advertiser's money or they have to give them "make good" ads.

When the system fully gets switched over to a subscription based model you are going to be paying a hell of a lot more than $50 per year for a subscription. You already pay a hell of a lot more than $50 per year just to get ESPN, even though most people don't know that.

By way of comparison the channel in England that shows most of the Premier League games charges the equivalent of about $35 PER MONTH for the service.
 
1) It's not as simple as a "flip of the switch". There are contracts signed with advertisers, other broadcast stations (don't forget there is a CBS component to the SEC and FOX/ESPN will be splitting BIG), that have exclusive windows where they can show events, etc. Cable companies are signed on that will want to honor what they are showing, etc. It's not that simple.

2) It cost a ton of money to start up a channel. They aren't just going to start one up if it is not going to make money long term just to change the model in a few years if that. They are gong to go the route that will make them the most money long term, not short term.

As for ideas, I don't know. Again, they may feel the traditional channel is the best way to go with some digital aspects. We don't know that yet. But if that is not part of the plans, then they have determined digital is the best route to go long term into the future. These are the guys that know the business, know the sensitivities, know which levers to pull to balance everything.

If the schools are happy, the ACC is happy, and ESPN is happy when they announce this, I will trust them, regardless of what it is. It may not be a printing machine right away, but if they feel it is the long term best route, then again, I trust them.

Everyone laughed at the BIG and Delany for starting their own channel, all the struggles it went through for the first few years, but now it is the standard bearer. The next thing whatever the ACC might do could be the same.
You are wrong it is this easy
18081652-light-bulb-character-flipping-a-switch.jpg
 
Networks don't charge for commercials based on distribution, they charged based on the expected number of viewers. If they don't get the expected number of viewers they generally either have to refund some of the advertiser's money or they have to give them "make good" ads.

When the system fully gets switched over to a subscription based model you are going to be paying a hell of a lot more than $50 per year for a subscription. You already pay a hell of a lot more than $50 per year just to get ESPN, even though most people don't know that.

By way of comparison the channel in England that shows most of the Premier League games charges the equivalent of about $35 PER MONTH for the service.
I think he was just talking about the ACCN and right now with that figure. They would be very limited in what they charged because the games they have rights to are piss poor at this point.

Should be interesting though.
 
And by the way, if someone in England wants to watch the EPL in high def that's even more money, because their base packages are still for games being shown in SD.
 
I think he was just talking about the ACCN and right now with that figure. They would be very limited in what they charged because the games they have rights to are piss poor at this point.

Should be interesting though.

I'm talking about just the ACC network as well. If they "only" charge $50 per year for it as SMF shows they don't get near enough money to make it viable. It will be at least double that, probably triple that or more. Maybe not at first while they would be trying to build the network up a juice the subscriber numbers, but within a couple years you will either be paying way more than $50 per year or the network will be an abject failure.
 
I'm talking about just the ACC network as well. If they "only" charge $50 per year for it as SMF shows they don't get near enough money to make it viable. It will be at least double that, probably triple that or more. Maybe not at first while they would be trying to build the network up a juice the subscriber numbers, but within a couple years you will either be paying way more than $50 per year or the network will be an abject failure.

Yea, Joe, thats my point. How can this channel make money? How much can it charge? How many Pitt fans will pay $50/year for 6 Pitt football games and 20 Pitt basketball games (half those OOC cupcakes) when they get the others free? How many Syr, Wake, BC, UVa fans will do the same?

The ACC just doesnt have enough of a diehard fanbase to go subscription based. What it does have is a sh!t ton of casual fans, given the markets they are in and they need to capitalize on that. They need to charge the NY Giants fan $.75/month on his cable bill because he casually watches Duke bball. That guy is not buying a subscription to watch the Dukies.

I'm saying I dont see how the numbers work in 2016 or 2020. How much would they have to charge? How many subscribers would they need?

So, if the ACC gets a million subscribers (which is NOT going to happen) for $100/year, that's $7 million per year per school not counting ESPN's take which would have to be half you'd think.

I'm interested to see what types of ideas people have on how an internet channel can make money because I am at a loss and I'm pretty good at this. I just dont see it.
 
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Right now though, I am asking how a network like this can make money. Can you give me some ideas?

Remember, if times get tougher in the cable industry, all it takes is a flip of the switch to make the B10N or SECN a subscription based app only. So, my point is, launch a linear channel, charge 50 cents or 75 cents per subscriber, get rich for 5-10 years, then if/when the cable model completely dies, then make it app only.

The answer --- an internet-only network simply will not make $. Really, no chance.

BTN and SECN make money, but that's in large part because of the power of their corporate partners (FOX and ESPN). Bundle those networks together --- get all of those folk who don't watch sports to still pay $1 a month!

The ACC needs to find a partner for a traditional cable channel. Simple as that.

On a side note: people tend to forget --- the Mountain West Conference had a conference-specific network in the back half of the 2000s. It failed. Primarily because they were doing it on their own.

On another side note: I --- along with many others --- still get ESPN Classic in my cable package. That channel shows very little of value anymore. But an ESPN "channel" that already has decently-wide distribution already exists.
 
The answer --- an internet-only network simply will not make $. Really, no chance.

BTN and SECN make money, but that's in large part because of the power of their corporate partners (FOX and ESPN). Bundle those networks together --- get all of those folk who don't watch sports to still pay $1 a month!

The ACC needs to find a partner for a traditional cable channel. Simple as that.

On a side note: people tend to forget --- the Mountain West Conference had a conference-specific network in the back half of the 2000s. It failed. Primarily because they were doing it on their own.

On another side note: I --- along with many others --- still get ESPN Classic in my cable package. That channel shows very little of value anymore. But an ESPN "channel" that already has decently-wide distribution already exists.

Well, the MW network failed primarily because it didnt have a large enough fanbase outside of lowly populated Utah. That doesnt have much relevance to this discussion.

I do agree that ESPN should just rebrand ESPNews or ESPN Classic.

They can still have an app but they need to make money off the masses. Not enough diehards will pay for a subscription.
 
I don't know about you, but my average DirecTV bill has been $65 for the last 3 years, and I have all the essential channels aside from the HBO, Showtime, etc.
 
The answer --- an internet-only network simply will not make $. Really, no chance.

BTN and SECN make money, but that's in large part because of the power of their corporate partners (FOX and ESPN). Bundle those networks together --- get all of those folk who don't watch sports to still pay $1 a month!

The ACC needs to find a partner for a traditional cable channel. Simple as that.

They do have a partner. ESPN. Same as the SEC.
 
I do agree that ESPN should just rebrand ESPNews or ESPN Classic.

That's the biggest detail that hasn't been discussed. A *brand new* cable channel won't make any money in carriage fees, and a lot of providers aren't going to carry it, or not carry it in default tiers. Unless ESPN is going to rebrand an existing channel, the ACCN isn't going to make a ton of money right away regardless.
 
The ACC , the rabbit ears, chrome gizmo, Raycom/Popeyes, Telemundo and ESPN 3 conference. What a joke. This conference is still dominated by parochial Tobacco Road thinking.
 
To be fair, any plan in the world will be uneconomical if the core question is "how many Pitt fans are going to actually pay $X to watch the games?".
 
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That's the biggest detail that hasn't been discussed. A *brand new* cable channel won't make any money in carriage fees, and a lot of providers aren't going to carry it, or not carry it in default tiers.

I totally disagree. Residents of NJ and Maryland are paying $1/month for BTN. You cant possibly argue residents of Syracuse, Louisville, VA, NC, SC, and FL like ACC sports any less than NJ and MD residents like BT sports.

It will be a tougher sell in Pittsburgh and Atlanta and maybe a no-go in Boston.....but there's just no way that the ACCN would have a harder time getting carriage than NJ, MD, or MO (SEC)
 
I'm talking about just the ACC network as well. If they "only" charge $50 per year for it as SMF shows they don't get near enough money to make it viable. It will be at least double that, probably triple that or more. Maybe not at first while they would be trying to build the network up a juice the subscriber numbers, but within a couple years you will either be paying way more than $50 per year or the network will be an abject failure.
They don't have the product to charge a lot more than that. They certainly don't have the product to charge 2 or 3 times that. We are talking about the leftovers of football and basketball and then sports that nobody watches. The NFL's popularity is much, much broader and it only costs $250 a year to get every single game and still only has less than 2 million paying subscribers. We are talking about half the teams, waaaay fewer fans, and way less games. In fact, for the top programs we are talking about 1, maybe 2, games a year. Are Clemson/FSU fans going to pay $100+ a year to see them play Charleston Southern and a handful of cupcake basketball games?

They do have a partner. ESPN. Same as the SEC.
He means a partner who will push them as a bundled channel.

I don't know about you, but my average DirecTV bill has been $65 for the last 3 years, and I have all the essential channels aside from the HBO, Showtime, etc.
The lowest package that just includes ESPN is $98 (before any additional services, fees, or taxes) after your intro period and that doesn't include NFLN, NBCSN, ESPNU, MLBN, SECN, NHLN, NBATV, and plenty of other sports (and non sports) networks that are relevant to this conversation.
 
He means a partner who will push them as a bundled channel.

.

I know. And they will if they go that route. Why do you think it is taking so long. They have to wait to renegotiate their contracts with the cable providers so they can bundle it in with the family of networks, just like the SECN.
 
I know. And they will if they go that route. Why do you think it is taking so long. They have to wait to renegotiate their contracts with the cable providers so they can bundle it in with the family of networks, just like the SECN.
Could be, but there sure is a lot coming out about being a streaming only service, which would probably be a disaster right now.
 
Could be, but there sure is a lot coming out about being a streaming only service, which would probably be a disaster right now.

It may be a digital only network. We don't know. But if ESPN felt a traditional ACC network would be financially viable, they would definitely produce one and package it in with the family of networks for distribution.

A digital only may not be a money maker right from the get go, but it could be a monster in the future. Nobody knows. Again, the BTN was outside the box thinking, the wave of the future, struggled from the get go, but turned out to be a huge success like 3-5 years later.

These are smart people doing this. I trust them.
 
It may be a digital only network. We don't know. But if ESPN felt a traditional ACC network would be financially viable, they would definitely produce one and package it in with the family of networks for distribution.

A digital only may not be a money maker right from the get go, but it could be a monster in the future. Nobody knows. Again, the BTN was outside the box thinking, the wave of the future, struggled from the get go, but turned out to be a huge success like 3-5 years later.

These are smart people doing this. I trust them.

A digital only network is ESPN's way of saying:

"Sorry, ACC, we couldn't do a traditional channel for you. The cable companies wouldnt pay for it. So, here's an app we'll give you. Its not going to make any money for years but we'll sell it like it is the revolution of sports broadcasting and say some prayers because honestly it is going to take a miracle for this thing to make any money at all in the next ten years and because of that, half you guys will be in the Big Ten or SEC. We tried."

A digital network is NOTHING. As I've said a million times, we already have one, ESPN3.
 
A digital only network is ESPN's way of saying:

"Sorry, ACC, we couldn't do a traditional channel for you. The cable companies wouldnt pay for it. So, here's an app we'll give you. Its not going to make any money for years but we'll sell it like it is the revolution of sports broadcasting and say some prayers because honestly it is going to take a miracle for this thing to make any money at all in the next ten years and because of that, half you guys will be in the Big Ten or SEC. We tried."

A digital network is NOTHING. As I've said a million times, we already have one, ESPN3.

ESPN3 is free and filled with content that couldn't make the many ESPN family of networks. They would be taking content away and making people pay for it. It would be directly on smartTVs like Hulu and Netflix among other things. And it would involve games that actually have some more weight to entice people to watch it.

It is saying nothing of the sort.

But I guess we'll hear all of your crazy shit regarding this for the next few years if that is the case.
 
Doesn't include Football or Basketball and probably not even Baseball.

It may be a digital only network. We don't know. But if ESPN felt a traditional ACC network would be financially viable, they would definitely produce one and package it in with the family of networks for distribution.

A digital only may not be a money maker right from the get go, but it could be a monster in the future. Nobody knows. Again, the BTN was outside the box thinking, the wave of the future, struggled from the get go, but turned out to be a huge success like 3-5 years later.

These are smart people doing this. I trust them.
I don't see anyway it is even a monster in the future because it would have to be a bundled option AND/OR have actually valuable content.

ESPN3 is free and filled with content that couldn't make the many ESPN family of networks. They would be taking content away and making people pay for it. It would be directly on smartTVs like Hulu and Netflix among other things. And it would involve games that actually have some more weight to entice people to watch it.

It is saying nothing of the sort.

But I guess we'll hear all of your crazy shit regarding this for the next few years if that is the case.
SMF is right in the content we are talking about would be (at best) the content already available on ESPN3, if it is a digital only network.
 
A digital only network is ESPN's way of saying:

"Sorry, ACC, we couldn't do a traditional channel for you. The cable companies wouldnt pay for it. So, here's an app we'll give you. Its not going to make any money for years but we'll sell it like it is the revolution of sports broadcasting and say some prayers because honestly it is going to take a miracle for this thing to make any money at all in the next ten years and because of that, half you guys will be in the Big Ten or SEC. We tried."

A digital network is NOTHING. As I've said a million times, we already have one, ESPN3.

Well, ya, in your hypothetical scenario of only digital now and forever.
 
Doesn't include Football or Basketball and probably not even Baseball.


I don't see anyway it is even a monster in the future because it would have to be a bundled option AND/OR have actually valuable content.


SMF is right in the content we are talking about would be (at best) the content already available on ESPN3, if it is a digital only network.

Not if they are trying to sell it as an actual digital network. They will put better content on it.

Again, this is all hypothetical as we don't even know what it will look like. It very well could be a traditional channel. As for the future, I don't know how you can say it won't be a monster. No one knows what the future distribution models will look like. The entire ESPN family of networks could be all digital 10 years from now.

Then again, it might not, but I don't think anyone can say it will be something one way or the other.
 
The ACC is simply screwed for dragging their feet. Other conferences were more aggressive and will reap the rewards until the cable mafia ends.
 
ESPN3 is free and filled with content that couldn't make the many ESPN family of networks. They would be taking content away and making people pay for it. It would be directly on smartTVs like Hulu and Netflix among other things. And it would involve games that actually have some more weight to entice people to watch it.

It is saying nothing of the sort.

But I guess we'll hear all of your crazy shit regarding this for the next few years if that is the case.

ESPN3 isnt exactly "free." ESPN gets a carriage fee for it.

What I am trying to tell you is the numbers don't work. A digital only cannot make money right now. I am asking you to give me some hypothetical numbers which will allow the digital only subscription model to make money. I contend that its basically impossible and if thats all we get, its the equivalent of ESPN saying "no" to the network question. The ACC and ESPN has to squeeze out enough money from the masses as long as the cable model is here. In case you haven't noticed, rights fees keep going up. The NBA, the EPL, Big Ten, CFP, etc.

So, again, give me some hypotheticals. I'd love to see it.
 
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ESPN3 isnt exactly "free." ESPN gets a carriage fee for it.

What I am trying to tell you is the numbers don't work. A digital only cannot make money right now. I am asking you to give me some hypothetical numbers which will allow the digital only subscription model to make money. I contend that its basically impossible and if thats all we get, its the equivalent of ESPN saying "no" to the network question. The ACC and ESPN has to squeeze out enough money from the masses as long as the cable model is here. In case you haven't noticed, rights fees keep going up. The NBA, the EPL, Big Ten, CFP, etc.

So, again, give me some hypotheticals. I'd love to see it.

Their only chance is to make some sort of deal with Netflix, who has 75 million subscribers. But Netflix won't go for it.
 
Not if they are trying to sell it as an actual digital network. They will put better content on it.

Again, this is all hypothetical as we don't even know what it will look like. It very well could be a traditional channel. As for the future, I don't know how you can say it won't be a monster. No one knows what the future distribution models will look like. The entire ESPN family of networks could be all digital 10 years from now.

Then again, it might not, but I don't think anyone can say it will be something one way or the other.
I say it won't be a monster, if it is a stand alone, because the ACC doesn't have even close to the appeal and following of SEC or B1G, so they will, at least, remain behind those. I'm not even sure the ACC could rival the subscriptions of those leagues if ALL of their content was on a stand alone network vs just 3rd tier type stuff for B1G and SEC.

It would be disastrous if the ACC takes even the middle rung games off of the normal distributions right now because there is such low demand for their middle to low rung product and they would lose an enormous amount of eyes. There isn't really a lot of great content to be had. There is football and basketball. You can't develop other great content, so either they pull their best content from National networks and eyes to go to a digital subscription service or they are essentially lining up leftovers that are already available and now asking people to pay for them.

An ACC Network isn't going to have the clout to be a monster, no matter what, but essentially being a pay extra for ESPN3 model now would provide almost 0 uptick whatsoever and IMO probably just really, really piss off the fans who do care.
 
Keep in mind the advertising dollars the nfl is moving towards an online limited package I believe for a certain games. That's a lot of clicks for online advertising dollars. I could see a way for the ACC to make revenue .
 
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