ESPN may have brought us to the tipping point

About ten years ago there was published a popular book by Malcolm Gladwell titled the Tipping Point…How little things can make a big difference.  It was quite popular among many in business, since it described how major trends are shaped by seemingly small things.  Last month some announcements by ESPN, and late last year by HBO and Showtime, may have brought the cable and satellite industry to a tipping point.

If you are a regular reader of this column or blog, you know that I have written often about how the economic model of cable and satellite providers was slowly being eroded and could soon collapse.  The model in question is the bundling, or tiered, approach to providing your channels.  This model is one that forces you to pay for services that you will never use.  Since it results in very strong profits, the Time Warners and Comcasts of the world are not in a hurry to make any changes.

TV audience researchers have long known that many cable and satellite subscribers continued to pay escalating monthly fees only because it was the only way to continue to get ESPN and HBO.  These two services are extremely popular and, up until recently, exclusively available via cable or satellite.  Many analysts in the industry thought that since ESPN was making billions on this arrangement, they would be slow to embrace any major changes in how they reach customers.

Well, the tipping point may have been reached.  ESPN has signed a deal with SLING TV that will allow subscribers to have ESPN programming via internet delivered TV.  Initially, the SLING TV subscribers will have two ESPN channels among other popular cable fare.  All now available without subscribing to cable.  For $20 per month, SLING TV subscribers will receive a dozen channels including ESPN, Disney TBS, HGTV, CNN and the ABC Family.  

This announcement comes on the heels of similar announcements by HBO and Showtime. Both will allow viewers to subscribe to their services via the internet thus making cable cord cutting more attractive for millions who pay for, but don’t watch the 500 cable channels.

The SLING TV service is owned by Dish, the satellite service, but is being operated as a separate company.  Perhaps the folks at Dish are looking for a life boat if the DishTV market should implode.

The SLING TV service is not perfect.  You can watch only one channel at a time, you can’t record the programs and the channel offerings are a bit meager even for the cord cutters.  I look for other similar services to launch now that the tipping point has been reached.

As I write this I am getting ready to watch the Super Bowl…how much longer will I need a TV to watch it?   …and what about all those commercials?