ESPN Still Isn't Quite Getting The Message Cord Cutters Are Sending
from the more-of-the-same dept
We've noted repeatedly how ESPN has personified the cable and broadcast industry's tone deafness to cord cutting and TV market evolution. The company not only spent years
As the data began to indicate the cord cutting trend was very real, insiders say ESPN was busy doubling down on bloated sports licensing deals and SportsCenter set redesigns. By the time ESPN had lost 10 million viewers in just a few years, the company was busy pretending they saw cord cutting coming all the while. ESPN subsequently decided the only solution was to fire hundreds of longstanding sports journalists and support personnel, but not the executives like John Skipper (since resigned) whose myopia made ESPN's problems that much worse.
Fast forward to this week, when Disney CEO Bob Iger suggested that Disney and ESPN had finally seen the error of their ways, and would be launching a $5 per month streaming service sometime this year. Apparently, Iger and other ESPN/Disney brass have finally realized that paying some of the least-liked companies in America $130 per month for endless channels of crap has somehow lost its luster in the streaming video era:
"There are signs that young people are coming into multi-channel television. People that were once called or thought to be cord-nevers are starting to adopt less expensive over-the-top packages," Iger said.
Who knew? Did you know? I certainly didn't know. Bloomberg, meanwhile, informs us that the company's new service is "Iger's bet on the future":
"If anything it points to what the future of ESPN looks like,” Iger said on a conference with investors. “It will be this app and the experience that it provides."
But will it? There's every indication that ESPN's still only paying lip service to innovation. What consumers say they want is the ability to either avoid ESPN entirely, or buy ESPN the channel on a standalone basis. But it's important to point out that's not what ESPN is actually offering here. The new streaming service won't provide access to ESPN's existing channel lineup unless you have a traditional cable subscription. Without a traditional cable TV subscription, users of the app will be directed to other content they may or may not actually want:
"The over-the-top service will roll out sometime in the spring, in tandem with a redesign of Disney's ESPN app. The over-the-top feature will be one part of that app, allowing users to watch live programming that will not otherwise be available on any of its channels. "The third feature is a plus service, we're calling it ESPN Plus, that will include an array of live programming that is not available — live sports, live sports events — not available on current channels," Iger said in an exclusive interview on CNBC's "Closing Bell."
This is something ESPN already tried once with the launch of ESPN 360 (ultimately renamed just ESPN 3) years ago. That channel offered access to streaming sports content, but not any of the content anybody was actually interested in (unless you're really crazy for men's professional hopscotch). What users want is either the option to buy ESPN as a standalone channel, or to avoid ESPN entirely. What ESPN's offering is a streaming channel retread filled with content viewers probably didn't ask for. All, again, because ESPN is afraid of cannibalizing its traditional viewership numbers by trying something new.
Admittedly ESPN is stuck between a rock and a hard place with no real easy options. ESPN currently makes $7.21 for each cable TV subscriber, many of whom pay for ESPN begrudgingly. Many industry insiders also have told me over the years that ESPN's contracts with many cable providers state that should ESPN offer its own streaming services, cable providers will no longer be bound by restrictions forcing them to include ESPN in their core lineups, which will only accelerate the number of skinny bundle options being offered without ESPN.
In short, if ESPN offers a standalone version of ESPN, it only encourages customers to cut the cord and move to less expensive (and less profitable) alternatives. If ESPN doesn't give customers what they want, they'll cut the cord out of frustration. But if ESPN actually wants to be ready for the future, getting out ahead of the inevitable shift to streaming is the only real solution. Nobody said evolution would be painless or the traditional cable TV cash cow would live forever. ESPN has the option of getting out ahead of the trend, or playing from behind later on when the cord cutting trend shifts from a trickle to a torrent.
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Filed Under: cord cutting, espn, sports, standalone, streaming
Companies: disney, espn
Reader Comments
The First Word
“Innovator's Dilemma
Cannibalize your current cash cow for the future, or ride it into the ground and watch an upstart do it to you.There aren't too many orgs with the fortitude to pull that off. I doubt ESPN will be able to. Netflix comes to mind, but hey, they freaking *named* the company with the vision they wanted, even when they were shipping physical disks in the mail.
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Something other than football or basketball
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Re: Something other than football or basketball
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Re: Something other than football or basketball
You can watch any sport you want with any competitors live or after the fact.
No need to VPN to Canada.
If you don't have NBC, pay for 1 month of Sling ($25) or YouTubeTV ($35) or Vue ($39) or DirecTV Now ($35). Or get a 7-day trial of each of them and watch for free.
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Re: Re: Something other than football or basketball
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Re: Re: Something other than football or basketball
Anything but worthless sports. I see more women sports than ever. If I wanted to watch sub par athletes I won't watch sports.
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Techdirt with lame topics spaced 3 hours apart yet presumes to advise multi-billion ESPN: "ur doin' it all rong!"
SAN FRAN MASS EXODUS: 'WE DON'T LIKE SANCTUARY, CRIME, POLITICS'...
http://sanfrancisco.cbslocal.com/2018/02/08/san-francisco-bay-area-mass-exodus-resident s/
Yeah, link is off-topic, which with Techdirt practically guarantees IS OF INTEREST.
Oh, if don't like Techdirt, why don't you stay away? What gives you the right to criticize Techdirt?
I'm an American, I can criticize anyone, and clown Masnick OFFERS this opportunity to the whole world, I don't force him.
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Re: Techdirt with lame topics spaced 3 hours apart yet presumes to advise multi-billion ESPN: "ur doin' it all rong!"
You're doing it all wrong.
Signed, Everyone Else
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Re: Techdirt with lame topics spaced 3 hours apart yet presumes to advise multi-billion ESPN: "ur doin' it all rong!"
Then you are openly inviting you being marked as spam. I will happily oblige, as will everyone else you whine impotently about.
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Re: Techdirt with lame topics spaced 3 hours apart yet presumes to advise multi-billion ESPN: "ur doin' it all rong!"
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Re: Re: Techdirt with lame topics spaced 3 hours apart yet presumes to advise multi-billion ESPN: "ur doin' it all rong!"
Well, he doesn't understand how someone could value conversation enough to allow the hecklers in, yet still tell people that they aren't required to listen.
For clarification, see XKCD.
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Re: Re: Re: Techdirt with lame topics spaced 3 hours apart yet presumes to advise multi-billion ESPN: "ur doin' it all rong!"
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Temper your expectations
Yeah, don't expect coherency, consistency or even rationality from that individual, you will only be disappointed. Entertainment on the other hand...
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Re: Re: Re: Re: Techdirt with lame topics spaced 3 hours apart yet presumes to advise multi-billion ESPN: "ur doin' it all rong!"
I'm not sure I would classify that as a complaint; it looks like more of a criticism.
An odd and probably ill-founded criticism, but still.
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"Allowing people to insult you is stupid!" "So we should block you then?" "Anyone BUT me!"
By that logic, since they seem to do nothing but criticize TD, then TD not only can but should block them from doing so, as that would be the 'smarter' option.
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Re: "Allowing people to insult you is stupid!" "So we should block you then?" "Anyone BUT me!"
I'm sure he'd just evade the blocks and consider himself justified in doing so because he's smart enough to figure out how to do so, but then, I never claimed that the viewpoint was self-consistent.
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Re: Re: Re: Re: Techdirt with lame topics spaced 3 hours apart y
Stop complaining about stupid social issues. Give me real sports or the the line of people leaving will rise.
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Re: Re: Techdirt with lame, lame claim to fame. Check it out, I bought a secondhand toaster from a guy who says he knows Brad Pitt. I got me an email from the prince of Nigeria -- well, he sure sounded legit.
"You're stupid for criticizing a company that's more successful than you are," says guy criticizing a blog that's more successful than he is.
...whaddaya know, he did it twice. How many hours did he space them apart?
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Re: Techdirt with lame topics spaced 3 hours apart yet presumes to advise multi-billion ESPN: "ur doin' it all rong!"
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Re: Techdirt with lame topics spaced 3 hours apart yet presumes to advise multi-billion ESPN: "ur doin' it all rong!"
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Re: Techdirt with lame topics spaced 3 hours apart yet presumes to advise multi-billion ESPN: "ur doin' it all rong!"
*Should* you continue to pour your shame on these posts?
*Should* you be upset when users mock you?
*Should* you be incensed that your posts are flagged by users as Tolling?
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Re: Re: Techdirt with lame topics spaced 3 hours apart yet presumes to advise multi-billion ESPN: "ur doin' it all rong!"
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Rinse & Repeat
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$7 / month seems like a bargain
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Re: $7 / month seems like a bargain
The problem is, to get the price that low requires everybody who doesn't like sports to subscribe as well. Without that artificial subsidy, the price is going to be much higher.
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Re: Re: $7 / month seems like a bargain
That's okay. Give me a commercial free option and I will pay $30 / month.
I think the networks are so focused on cord cutters that leave because of cost that they ignore the second wave of cord cutters that are leaving cable because the experience is terrible. I don't want commercials and I want to watch things on my schedule.
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Re: Re: Re: $7 / month seems like a bargain
It is actually a little surreal, and only a "frog in the kettle" analogy seems to adequately explain why anyone would ever watch this stuff, much less pay for it. Maybe people are fooled into thinking they are watching a sports contest. The reality is that the contest is for the minds and wallets of the watchers, and as long as people passively plop down in front of screen for several hours a day, it will never be much of a contest.
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Re: $7 / month seems like a bargain
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Re: Re: $7 / month seems like a bargain
That they require you to bundle ESPN or other unwanted channels with what you do want to watch, is not a technical problem with the medium. It's a business decision, akin to your internet provider allowing/restricting the most popular web sites according to what internet "bundles" you subscribe to.
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Re: Re: Re: $7 / month seems like a bargain
With all this cord cutting, shouldn't that be according to what cable bundles you subscribe to. They've gotta up those cable subscription somehow.
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Not everyone wants an app
I'm willing to pay something reasonable -- either a flat fee or per-event. Note: REASONABLE. But in return I want the events I'm interested in: college basketball -- mens's and women's; the WNBA; the NFL, college football; MLB; the occasional track/field, skiing, and other less-popular sports.
I'd even pay for some of the ESPN content: "Outside the Lines" is pretty good sometimes. So is "30 for 30". And "Pardon the Interruption" is easily the best commentary on ESPN, much better than anything else.
But I want it without a cable package. And I want the ability to time-shift, so that I can watch one game live and another simultaneous one later.
ESPN could be making money off me if they sold this. But they're not making a dime today because I just pirate everything. That's mildly inconvenient, and it doesn't get me everything I want (women's basketball is tough to find) but it doesn't require a cable subscription, it doesn't require an app, and it's good enough that I have zero motivation to change.
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Re: Not everyone wants an app
Some profit is better than no profit. While investors might not like that, they will get along with it, eventually, but maybe not with the same enthusiasm as they currently do.
Closed minded and focused only on what they want, not what their customers, or potential customers want. A formula for...the right to be forgotten, whether they want to be forgotten or not.
BTW, does Disney own the rights to Back to the Future? Seems like that is where they will wind up, sometime, down the road, when they realize that when the market speaks, vendors in that market should listen.
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Re: Re: Not everyone wants an app
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Profit!
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The former reduces costs for the 58% who don't want ESPN, but do want other channels.
The latter is an "ESPN tax" raising the prices of other channels, driving consumers away from them. ESPN is effectively shouting "IF WE'RE GOING DOWN, WE'RE TAKING EVERYONE ELSE WITH US!!!"
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It's not going to work out for them.
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I don't know how much ESPN gets from Hulu but all the ESPN networks are included in the Hulu service for $40 a month. And it automatically DVRs the games from my favorite teams.
Now if Hulu could just stream an entire game without me having to exit out and come back in 5 times to get past a frozen screen...
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Re:
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Phoney Sports.
Our tennis champion had been wrestling with alcohol since the age of eight, and when he pulled himself together and won a match, it was a cause for some celebration. We has a bad scare when a female friend, who was a gymnast, departed the mini-trampoline in an unplanned manner. An ambulance took her off to the hospital, but fortunately she was not seriously injured. Of course, she had had heart surgery in her early teens, and perhaps that made us a bit over-protective. I have a slight eye-hand coordination handicap, which means that my handwriting isn't very good; that I never learned to drive an automobile satisfactorily; that I had a lot of trouble using a typewriter, before word processors came along; and that I am very incompetent at games involving throwing and catching balls. Previously, in Texas, I had played football, but as a center. The quarterback tolerated my erratic ball-snaps because I could keep the rushers off him. However, when I got to the prep school, they did not think much of football. In New England, it is not considered a gentleman's game. Football, like boxing, is a low-prole activity. Gentlemen played tennis, or they climbed mountains. The school was interested in me as a mathematician, and I collected my share of academic prizes, but in sports, I was put into a "duffer's class," with three girls who were not cut out to be gymnasts, figure skaters, or ballerinas. We played badminton, with occasional excursions into bowling and putt-putt golf.
The school recently sent me a magnet-mascot--logo, a picture of a white horse, and I stuck it up on the refrigerator. It has the indefinable look of something drawn by a very young girl, innocent, and yet full of moral certitude.
I have attended five different universities, all of them offering the Ph.D. in a wide range of subjects, but organized sports have always been remote. The football players and basketball players lived in their own dormitories. The did not, and could not, take the kinds of courses I took. About the only time one became aware of them, outside of the football field or the basketball court was when they committed very serious crimes: grievous bodily assault, rape, murder, and arson-for-profit. They were slave-gladiators from the Roman arena, in short. If something bad happens to a college athlete, he is completely expendable. You cut him up in pieces and feed him to the dogs. College sports is a mass-entertainment for people who don't play any sports at all. To be a sports fan under those conditions is to accept the spurious in place of the real.
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ESPN can't afford to get the message
Given the change to opt out of paying for ESPN, I would and I suspect that millions more would also do so. In order to maintain revenue, ESPN would have to increase the subscription cost, which would drive many more to opt out.
Summary: ESPN has a choice: shrink its revenue drastically, or find a way to get millions of non-watchers to continue paying.
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They also can't afford NOT to
Summary: ESPN has a choice: shrink its revenue drastically, or find a way to get millions of non-watchers to continue paying.
The problem, for them, is that they can either take a hit now and make less money, or slowly but surely keep losing customers as they try to maintain current levels of profitability and drive away customers until they've driven enough away that they aren't making any.
Make less and stay afloat, or try to make the same and sink. Short term thinking versus long, either adapt or die just like any other industry.
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And yet look at HBO. They haven't been hurt by offering HBO Now. Heck, advertisers are constantly offering free HBO for a year if you sign up for an Internet & Cable bundle with them (as if HBO is proof that they're being innovative).
Given how widely watched ESPN must still be even with the lower numbers, they're hardly going to be completely wiped out by being dropped from the minimum bundle.
The real problem is ESPN loves the Socialism of cable TV via the guaranteed profits of tens of millions of cable subscribers who never watch ESPN but have to pay for it anyway.
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Exceptionally
Stupid
People
Network
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Additionally, many of the sports themselves have launched their own streaming services and free replays, causing even further dwindling of ESPN watchers. In fact, that's the entire reason ESPN is gaining coverage of Formula 1: NBC didn't want F1's planned streaming service to compete with its own "NBCSN Live" app.
And of course, there's always the problem of digital piracy. YouTube streamers, Kodi sticks, and various other websites have been and will be streaming ESPN content for years. Many people use them simply because they don't have an affordable option to watch it legitimately, but give them an accessible $10 a month option instead of a $50 a month option and they'll be glad to sign up.
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Re:
Because other networks are eroding their share, and so are other sports (notably MLB), and so are college conferences (like the SEC and ACC and Big 10).
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SEC & Longhorn
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The technology is there...
I would gladly go back to cable for a package like that.
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Re: The technology is there...
The moment passed. I'm never getting a cable TV subscription again, no matter what they do. It's too late; I've moved on.
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Gee, that was boring. I cannot imagine why would people waste time watching sports - with or without a cord - instead of doing them.
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Innovator's Dilemma
There aren't too many orgs with the fortitude to pull that off. I doubt ESPN will be able to. Netflix comes to mind, but hey, they freaking *named* the company with the vision they wanted, even when they were shipping physical disks in the mail.
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Professional men's hopscotch!!!lmao fucking hilarious writing man
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