Should Regional Sports TV Go OTT?

Regional TV sports networks may be finding a tougher road to travel in future years, as programming costs keep rising and TV consumers become more leery about incurring price increases.

On top of this, traditional pay TV operators aren’t all that interested anymore -- even if a niche group of consumers are apparently ready to pay.

Time Warner Cable’s SportsNet LA just lowered its wholesale price by a full dollar a month to around $3.50, as well as promising longer six-year deals to entice local cable operators.

But so far only Time Warner Cable and Charter Communications have SportsNet LA -- only 38% of LA’s cable TV homes.

This has been a long-running predicament going back since 2012, when Time Warner Cable paid big bucks for the local-area Dodgers TV rights.

Pay TV operators are starting to believe that profit margins on high-flying regional sports services are now a risky proposition, as many TV subscribers, according to many studies, look to trim back cable channels.



On the other side of the country, in New York, Comcast Corp. -- the biggest U.S. cable operator -- dropped the YES network (owned by 21st Century Fox), the regional sports service that airs the New York Yankees and Brooklyn Nets, back in late 2015. But, Comcast is in the minority here, as other New York area cable operators have the channel available to subscribers.

Alternatives? Regional sports networks -- as well as other national sports networks -- could launch as a stand-alone Web-based app or over-the-top services, bypassing traditional cable, satellite, and telco TV distributors. But analysts say this currently is a long shot to happen -- and probably won’t have the scale needed to become a profitable operation.

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