, a Disney owned sports network, may be the most the popular cable channel watched in the United States, but as well it is one of the most costly for the consumers. It is watched by 99 percent of the cable consumers.It is the only cable channel that had 20 million viewers watching one channel at once.
The cable company may be in high demand, but has to pay a hefty amount to provide the sports for the viewers. ESPN just signed a 1.8 billion contract to the NFL to air Monday Night Football. This increase will be tolled on the viewer. Cable companies will be required to increase prices. These higher prices have cost cable companies many clients. Newer technology allows consumers to view live television (sports) online without the high cable bills. ESPN is one of the major causes for the higher cable bills; cable companies say to pay for ESPN, it is about 20% of the cost. Disney also refuses to sell ESPN as a stand alone company because it would lose a large piece of its income. The main worry with cable companies is that Disney will keep increasing the cost of ESPN because it is highly viewed and an expensive operation.
ESPN has the ability to charge these high prices because it has many Points of Difference (PoD) from the cable TV industry (eg-Monday Night Football). This allows ESPN to separate its self from the cable TV industry and create this strong brand image.The high cost of production causes a lower demand though . The loss of demand and increase in price has caused ESPN to loose costumers. This will decrease the level of the current viewers price. ESPN should find a way to continue to entertain their costumers with low or average prices.