Because of my job, it's not a parallel comparison. I pay for stuff (particularly Netflix (NFLX - Get Report) and Hulu) I probably would not pay for if I didn't do what I do for a living. So we'll just go with what I pay DIRECTV only.
My most recent monthly bill came to $180. That's for the "Ultimate" programming package (one step below the "Premier" package, which costs $48 more), Time Warner's (TWX - Get Report) Home Box Office (HBO) (and Cinemax) and pay-by-the-month subscriptions to "NHL Center Ice" and "Major League Baseball Extra Innings." The $180 also includes small and temporary promotional discounts.
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If I cut the cord, I would likely subscribe to Hulu (so I could keep up on some current programming), NHL Game Center and MLB Baseball At-Bat Premium. That would run me much less -- roughly $60 a month. So a third of the cost of satellite, however I would not have access to HBO, Disney's (DIS) ESPN as well as Kings, Ducks, Dodgers (all else equal) and Angels games. They get blacked out on the NHL and MLB online feeds.
Herein lies the deal breaker ...
In a perfect world, HBO offers HBO GO unauthenticated for like $15-$20 a month (don't be surprised to see HBO offer wider access, in some fashion, over the next year or so); Disney does the same with ESPN; and, for an additional fee, the sports leagues rip the bandaid off in one fluid motion lifting local blackout restrictions from their apps. That would easily take us at least close to, quite possibly back to and maybe even over the $180 I pay now.
If you think the fight the programmers are having with Aereo is a big deal, consider what would happen if the NHL and MLB (naming just two) messed with the blackout situation. The local sports networks (most of whom are owned and/or affiliated with one of the nation's largest programmers, Twenty-First Century Fox (FOXA - Get Report)) would come unglued right alongside their advertising partners. But it's not about the ads as much as it's about subscription fees.
Using Southern California as an example, cable and satellite companies pay networks such as Fox Sports West a few bucks per month per subscriber. That's a lucrative relationship. Of course, the obvious answer then is to do apps such as HBO GO and require authentication (you log in with your cable or satellite subscription username and password) to access feeds of in-market games complete with commercial breaks. It could basically be an addendum to what you already receive out-of-market on the apps. I can't imagine it would be all that difficult to get the leagues on board. They've been fantastically ahead of the game with respect to taking their product to digital platforms.
But, for whatever reason, that's not happening. I have no answer why. It's just because this is how quite a few old guard media conglomerates and their offshoots roll. It's difficult to make even what seems obvious take place in other corners.
But ... wait ... again -- that would be a solution for them (cable, satellite, networks), not you. The whole point is how do you access everything you want to access without having to prove you subscribe to cable or satellite. The answer is -- you don't.
If you had the option as a Game Center or At Bat subscriber to pay an additional fee to see in-market games (without a cable or satellite account), that would basically bring you back to where you started. It wouldn't be cheap because it can't be cheap. Too many people need to get paid -- the networks still need to recoup any lost subscription fees and, depending on whether or not these digital broadcasts included commercials, advertisers would require some level of attention.
It's a confusing mess that's quite simple all at the same time.
I'm not even a big Kings, Ducks, Angels or Dodgers (remember, all current drama aside with the Dodgers) fan, but I know I'd be miffed if I sat down one night and they were the only game on -- as they are often are -- and I couldn't watch because I no longer had a cable or satellite subscription. Like I said in the article cited at the beginning of this one, having that traditional corded account is, for many of us, a safety net. We keep cable or satellite for those instances where we might need it and would regret not having it.
It's a powerful dynamic that acts at both psychological and practical levels.
--Written by Rocco Pendola in Santa Monica, Calif.