There’s a reason YouTube TV is being stubborn about its content acquisition deals with Disney.
Content costs are fully 65 percent of total costs, significantly exceeding the similar costs incurred by cable TV firms (42 percent or less).
Category, Streaming Provider | % of Total Cost |
Content Acquisition (Programming) Fees paid to networks and content owners | 65% |
Technology & Cloud Infrastructure CDN, servers, streaming technology, bandwidth | 12% |
Personnel (Staff & Operations) Engineering, support, product management | 8% |
Marketing & Customer Acquisition Digital marketing, promotions, partnerships | 7% |
Payment Processing & Platform Fees Credit card fees, app store fees | 3% |
General & Administrative Corporate overhead, legal, facilities | 3% |
Operating Margin (Profit) Net profit margin (often break-even or loss) | 2% |
Total | 100% |
For a cable TV company, content acquisition accounts for 42 percent or less of total cost, with the largest providers (Comcast, Charter Communications) likely getting volume discounts of five percent to 15 percent on content costs.
And given the declining nature of the linear TV business, costs matter quite a lot.
That noted, streaming services are taking a greater share of the remaining linear business.
So from a content provider point of view, the streaming customers represent a growing revenue source, while traditional linear cable TV or satellite TV represents a declining revenue source.
Channel Name | Content Owner | Category | Monthly Cost |
ESPN | Disney | Sports | $9.42 |
TNT | Warner Bros Discovery | Entertainment | $2.39 |
Fox News Channel | Fox Corp | News | $2.15 |
FS1 (Fox Sports 1) | Fox Corp | Sports | $2.04 |
NFL Network | NFL | Sports | $1.51 |
ESPN2 | Disney | Sports | $1.24 |
Disney Channel | Disney | Kids | $1.20 |
TBS | Warner Bros Discovery | Entertainment | $1.16 |
FX | Disney | Entertainment | $1.06 |
CNN | Warner Bros Discovery | News | $1.02 |
USA Network | NBC/Comcast | Entertainment | $0.89 |
Nickelodeon | Paramount | Kids | $0.79 |
MSNBC | NBC/Comcast | News | $0.54 |
ESPNU | Disney | Sports | $0.51 |
Discovery Channel | Warner Bros Discovery | Lifestyle | $0.46 |
MTV | Paramount | Entertainment | $0.45 |
History Channel | A&E Networks | Lifestyle | $0.43 |
Cartoon Network | Warner Bros Discovery | Kids | $0.41 |
FS2 (Fox Sports 2) | Fox Corp | Sports | $0.40 |
HGTV | Warner Bros Discovery | Lifestyle | $0.39 |
National Geographic | Disney | Lifestyle | $0.38 |
AMC | AMC Networks | Entertainment | $0.36 |
Golf Channel | NBC/Comcast | Sports | $0.35 |
Food Network | Warner Bros Discovery | Lifestyle | $0.35 |
Bravo | NBC/Comcast | Entertainment | $0.33 |
A&E | A&E Networks | Entertainment | $0.31 |
BET | Paramount | Entertainment | $0.31 |
Syfy | NBC/Comcast | Entertainment | $0.30 |
TLC | Warner Bros Discovery | Lifestyle | $0.29 |
Comedy Central | Paramount | Entertainment | $0.29 |
E! | NBC/Comcast | Entertainment | $0.27 |
Lifetime | A&E Networks | Entertainment | $0.26 |
Animal Planet | Warner Bros Discovery | Lifestyle | $0.24 |
VH1 | Paramount | Entertainment | $0.22 |
truTV | Warner Bros Discovery | Entertainment | $0.14 |
Total Estimated Monthly Cost (for all channels shown) | $32.86 |
And Disney represents the programmer that arguably represents the largest content acquisition costs for a linear TV subscription services provider.
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