The cable TV scare machine has been working overtime telling cable subscribers that the expected ESPN standalone service will cost over $36 a month! Clearly these reports are meant to scare cable subscribers into staying with their cable service
So let’s look at why this won’t happen and why it will cost $10 or less for a basic ESPN package.
The first place to look to see that $36 is way overinflated is Sling TV. For $25 you get all of the ESPN channels (except ESPN Classic, but they do not show live recent sports). Not only do you get all of the ESPN channels but also over 20 non-ESPN channels for $25 a month. Somehow ESPN is making enough money on less than $20 a month to give you all of their channels.
Secondly these reports of $36 for standalone ESPN assumes that if ESPN went standalone all cable providers will drop ESPN. HBO, Showtime, and CBS have shown that cable providers will blink and not drop popular channels that offer standalone service.
Even with a standalone service many people will pay for a cable TV package. Some because they want the large number of channels but others just because it is easier to use. While for many people cord cutting is easy, it is still considerably more complicated than turning your cable box to channel 148 for ESPN. So while many people will jump ship expect it to be a surprisingly small number at first. This will allow ESPN to continue to receive money from people who do not watch ESPN.
The last and real reason ESPN will not cost $36 a month is packaging. Most people do not want all ESPN channels, especially the smaller channels like ESPNU, ESPN Classic, and the SEC Network. Do not be surprised if an ESPN standalone service offers ESPN and ESPN 2 for one price and additional channels for a few extra dollars.
There is a large drop in the number of households with ESPN compared to those with ESPNU. Most ESPN money is made off of ESPN and ESPN 2. So it would not be a surprise to see the same thing happen with a la carte ESPN, which would allow people to pay $10 or less for the ESPN channels they want and not pay for channels they do not want.
So do not be scared by the argument that a la carte TV will suddenly mean skyrocketing costs. That’s kind of like saying songs must go up in price because fewer people will buy them when CD sales go away.