EconomyFinancialThe war of streaming and pay TV raises the...

The war of streaming and pay TV raises the costs of sports content

Juan Cabrera has been a subscriber to the cable company Dish for more than eight years. He claims to have contracted the pay television service for the range of sports content that can be accessed through the company’s signal, especially the Liga MX and Concachampions matches. However, on April 13, it was learned that Fox Sports programming would no longer be available on Dish because both companies did not reach a commercial agreement.

“I’m going to take it down because I watched Dish mainly for sports; yes there are interesting channels, but without sports it doesn’t seem so attractive anymore and that’s why I’m thinking about canceling my subscription, because now I have to look for options to access sports programming. In addition, they did not notify users in advance, and that is rude, “said Juan Cabrera.

Fox Sports channels still appear on Dish’s programming grid, but when one of them is selected, the user is automatically prompted with the reasons for the termination of the agreement between the two companies.

According to Dish, Grupo Lauman –which acquired Fox Sports in Mexico– will transfer part of its programming to its new Premium channel, as well as to its application that has been in operation since April 2, which will mean that users of the cablera will have to pay up to 50% more in their subscription to access sports content.

“They want (Fox Sports) to significantly increase the cost of their channels, which are now left with less sports content (…) so defending the economy of our subscribers and the quality of content, as of April 13, 2022 , the Fox Sports channels, Fox Sports 2 and 3 will be suspended”, details Dish’s explanation to its users through its cable signal.

In a statement, Fox Sports explained that the 2017 distribution contract between the two companies expired earlier this year, and for more than three months – the time Fox Sports signals were maintained on Dish – they sought to negotiate the renewal of the agreement. with a 3% price adjustment, but they failed.

Currently, Juan pays 449 pesos a month for his restricted television service on Dish. Of that amount, 309 pesos correspond to its basic package, while 140 pesos is for its Premium package, which includes Fox Sports channels.

If Dish and Fox Sports reached a new agreement for the transmission of sports content, subscribers would have to pay an additional 50%, that is, 70 pesos more, which would mean that instead of 140 pesos a month they would have to pay 210 pesos a month. month. In total, Juan Cabrera would have to pay 519 pesos a month for his restricted television service.

To compensate for the departure of Fox Sports content, Dish has integrated various content into its offer to retain its subscribers. Some channels are: AMC, which broadcasts movies; Cartoonito, childlike; MNX Meganoticias, of an informative cut; Baby First for children; and Gourm, of a gastronomic nature.

Gonzalo Rojón, director of analysis at The Ciu consultancy, explains that the movements and alliances currently being carried out by production companies and companies that own entertainment channels to generate a Premium product end up affecting users, as is now happening with those of the cable company Dish, because now they must choose between continuing with pay TV or looking for another option that allows them to access their programs.

“More than an affectation for the cable companies, it is for the users. Imagine those who had paid TV and the Fox package, and suddenly they won’t have it anymore. Now they must look for options”, comments the analyst.

First Disney, now Fox Sports

In little more than 10 years, video-on-demand companies like Netflix arrived in the Mexican reality with a new business model: content on demand at any time. This paradigm has been attractive to users who are eager to watch their programs, series – and now sports – whenever they want. Entertainment companies have understood this, which is why they have opted to launch their own streaming platforms.

But this situation is already affecting pay television to get content for their grills and users by increasing the costs to maintain programs on pay television.

In January of this year Disney decided to withdraw children’s channels from the pay television programming grid to migrate them to its streaming platform, while on April 13 Fox Sports left the Dish broadcast for not reaching a commercial agreement between both companies.

Gonzalo Rojón considers that, since they depend entirely on the content of the production companies to feed their program schedule, cable companies such as Dish are subject to the commercial conditions imposed by content companies such as Fox Sports.

For this reason, he assures, pay television companies are forced to suddenly increase their rates, which only ends up affecting consumers.

“What the cable companies do is buy programs and they depend a lot on the price they put for this content, which is in dollars. If suddenly the exchange rate increases, the price for the content also increases. That is why suddenly there are hikes in the cable companies and they have two options: increase the cost to their users or absorb the price of the content, which goes against their profits, or outright not afford it, as is the case with Dish”, details the specialist.

Rojón considers that other restricted television operators could see their sports offer affected by the conditions that Fox Sports may impose due to the permanence of its contents.

Last year, Grupo Televisa assured that the purchase of the Fox Sports channels would generate a barrier to access to sports content, since by passing into the hands of Grupo Lauman, only this company can reserve the rights to the programs.

The specialist says that the proliferation of streaming platforms – and with it the reservation of content for these applications – makes the development of pay television more complicated, so the option you have is to ally yourself with video on demand companies in your service packages.

“We are trying to figure out what the strategies are going to be, because (the service) is not going to disappear. It’s not like in the United States, where they are leaving pay television subscriptions to go directly to streaming platforms. This coexistence is going to cause many alliances to emerge not only to include them, but to offer specific content that is from some platforms”, he assured.

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