Media Tech Uncategorized

ESPN and FS1 on Hulu a sign that bundles may never die

Meet the new boss. It’s the same as the old boss. Higher ups in the entertainment and media industry have been saying for a while that bundles aren’t going away. They consistently say that bundles — and not a la carte offerings — are the only way that access to content can remain affordable. Cord cutting and streaming was supposed to be the bundle killer. People won’t pay for what they don’t watch. That is unless streaming services steal the bundle business model and use it themselves. That happened with Sling TV, Sony Vue, and now Hulu live is following suit.

The logic central to bundling is that no one watches every channel. Essentially paying a subscriber fee for things as big as TNT or as niche as Food Network subsidizes the true price of ESPN and FS1. It theoretically works both ways. The subscriber fees help the sports networks pay exorbitant television rights.So people who don’t watch ESPN on cable still pay for it. People who don’t watch History Channel still pay for it. Paying across the board allows everyone to contribute to a total package.

That means people are paying a lot for things they don’t watch. Cord cutting was supposed to stop that problem. People could essentially pick and choose what they wanted to watch. Netflix, Hulu, and Amazon Prime don’t care about a specific channel, they just care about people watching and subscriber fees. Live streaming changes the game a bit.

There was little chance companies were going to go the HBO Now route. HBO sells its product a la carte. Fans don’t need a cable subscription to view content. There was talk about ESPN moving to an a la carte model, but it would be extremely expensive. Someone might be willing to pay $20 per month for ESPN — $240 a year — but most people probably aren’t willing to pay $50 a month. Add in ESPN for $240 and every other channel a viewer wants and a la carte becomes more expensive than bundling.

That’s why the bundle is probably here to say. It’s safe. It does cut costs for people interested in a wide range of television. Streaming services aren’t getting rid of it. If another business model worked, they definitely would have, but bundles make sense. Meet the new providers. They are the same as the old providers.

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