Wrong model...HBO is not deserting the carriers they are looking for an augmentation to get to the cable cutters.
How much will people pay and how many will pay? Not much and not many is the answer.
It's absolutely the right model. The cable companies most certainly view HBO's moves as giving them the finger. It is the beginning of the end of their business models. The transition to a la carte and smaller streaming packages is going to be far swifter than most people think. You're going to see many more networks offering a full experience w/o the cable companies over the next two years. Once ESPN takes the plunge, everyone will follow suit. Traditional 100+ channel bundles will be a thing of the past. That will suit me just fine since there are only a dozen or so that I watch regularly. I'll be thrilled to not have to subsidize Lifetime or Disney or MTV.
The Pac-12 can continue to make their content available to cable subscribers, but they should not be dependent upon them to deliver the full network experience to cord cutters and those who live outside the Pac-12 footprint.
I freely admit I'm pulling these numbers out of my ass, but I'm going to speculate anyway. Hundreds of thousands of people fill Pac-12 stadiums every week. I think the majority of those people who are willing to shell out money for tickets would certainly be willing to shell out $8 a month for the Pac-12 network. Many more live in areas that can't get the Pac-12 Network from their cable provider. Most of those people already own a game console or streaming box. A
$39 Roku Streaming Stick is no big deal for people to pick up if necessary. That goes for sports bars, as well.
So let's say that the Pac-12 requires a yearly subscription so that people can't sign up just for football season. Let's say it's $96 per year, which works out to $8 per month. Let's conservatively say they get 350,000 streaming subscribers. These would be four types of subscribers:
1. People who are currently cord cutters and would love to see their Pac-12 teams, but don't want to shell out $100/month for cable.
2. People who cancel their cable/satellite subscriptions because they're fine with Netflix, Amazon Prime, Hulu, etc as long as they can still get their Pac-12 fix.
3. People who downgrade to a cheaper basic cable package because they're only on the more expensive plan and/or paying for the regional sports network package in order to get the Pac-12.
4. People/sports bars who can't get the Pac-12 through their provider and don't want to switch to Dish for whatever reason. (I used to be a Dish subscriber. Loved it for years but I cancelled when they wanted to charge me a boatload to come out and repair or replace their defective equipment that I was leasing. I'll never go back.)
350,000 x $96 per year = $33,600,000. They'd also get 100% of the advertising revenue. These numbers I've pulled out of my ass certainly sound like a solid business plan to me.
