On The Media looks at why we continue to pay ESPN's live sports 'tax'

(Originally published 5/27/12)

This week's full episode of On the Media (WNYC, New York) is dedicated to "Television's Trying Times," "including how the industry is coping with changing consumer habits, the future of the communal viewing experience, and television on the web." One of the episode's segments looks, specifically, at a topic close to my heart: why television consumers continue to pay so much of our cable and satellite bills for ESPN and other sports networks.

The segment explains that we all pay an $80 annual "tax" to Disney for ESPN -- whether we watch the network or not. While the segment should have pointed out the importance of sports' young male demographic in these networks' high carriage fees (and, subsequently, our cable bills), the segment does do a great job highlighting the value of live sports in these high costs. OTM host Bob Garfield and guest Peter Kafka of All Things Digital explain the dynamic after the jump...

Garfield: You can watch Breaking Bad in real time, or time-delayed on your DRV. You can get it through Netflix, and you can binge on it or watch one show at a time. But that's not how people consume sports. They consume it in real time. It's kind of the last-chance gasp for the old mass audience. Is that what gives ESPN so much clout? 

Kafka: It gives sports in general enormous clout with advertisers. Sporting events and award shows -- Grammys, Oscars -- even things like American Idol all have enormous import for the TV advertising ecosystem because you can still get lots of eyeballs there. That's separate from why consumers are paying for access to sports. They're paying for access to sports because that's the only way they can get it.

To this effect, see this great June 2011 article from SportsBusiness Journal on the growing fees paid by cable networks for the rights to live sports events.