ESPN Has Lost 14 Million Viewers In 7 Years Thanks To Cord Cutting
from the swimming-against-the-tide dept
ESPN has long personified the cable and broadcast industry's tone deafness to cord cutting and TV market evolution. Executives not only spent years downplaying the trend as something only poor people do, it sued companies that attempted to offer consumers greater flexibility in how video content was consumed. ESPN execs clearly believed cord cutting was little more than a fad that would simply stop once Millennials started procreating, and ignored surveys showing how 56% of consumers would ditch ESPN in a heartbeat if it meant saving the $8 per month subscribers pay for the channel.
The penalty for ESPN's failure to adapt has been severe. Disney's recent earnings revealed that ESPN lost another 2 million regular viewers this year. And while ESPN still has 86 million regular viewers, that's a 14 million regular viewer dip from the 100 million regular viewers it enjoyed in 2011. Those 14 million lost users generated around $1.44 billion per year for the "worldwide leader in sports," which is still saddled with the severe costs of set redesigns and sports licensing contracts the company struck while it was busy not seeing the massive locomotive of market change bearing down upon it.
While some of these wounds are inevitable due to shifting markets, many were self-inflicted. ESPN execs often tried to shoot the messengers instead of listening to the message. And once the damage was done, ESPN decided to fire hundreds of longstanding sports journalists and support personnel, but not the executives like John Skipper (since resigned for other reasons) whose myopia made ESPN's problems that much worse in the first place.
Ultimately, ESPN and Disney figured out that streaming was the future. In response, it launched a new direct-to consumer app dubbed ESPN+ that sort of provided users what they wanted, but not really. The $5 per month service basically took much of the fare available on ESPN's lesser-watched channels and offered it over the internet. But there were caveats; such as the service didn't really offer users what they really wanted (just a streaming version of ESPN's core channel) unless you subscribe to traditional cable, part of the "TV Everywhere" mindset cable execs can't seem to move past.
While ESPN's losses are the most notable, other Disney properties continue to see sharp viewership declines in the cord cutting era:
"Disney Channel has also seen its subscribers ebb to 89 million, down from 92 million in fiscal 2017. Freeform fell by 2 million to the 90 million mark. Disney Junior (69 million) and Disney XD (71 million) both lost 3 million subs. The numbers, attributed to Nielsen Media Research estimates, indicate that the growth of virtual MVPDs such as YouTube Live and Hulu’s package, are still not enough to offset a net decline in the subscribers from the traditional pay-TV world."
Again, many cable and broadcast industry executives are under the mistaken impression they get to choose when to adapt to the markets shifting around them. In reality they only have two choices. One, get out ahead of the shift toward streaming video by giving consumers what they actually want, even if that means losing some money in the short term. Or, refuse to adapt, double down on the belief that traditional cable TV is a cash cow that will never die, and watch as smaller, more flexible outfits continue to steal your massive subscriber base out from beneath your feet.
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Filed Under: cable, cord cutting, sports
Companies: disney, espn
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Your comment is true I’m the short term only. In the grander scheme, it’s myopic and totally irrelevant. Disney has been warning ESPN for years that it is the worst property in their entire portfolio. Disney knows cable is dead. They know that real viewership is what matters going forward. ESPN will fire hundreds more people soon. There’s a good chance they get sold if there are any buyers at all.
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The point is that under the traditional setup, you were still paying even if you never tuned into the service. Once people found ways to ditch the traditional cable packages, they also found ways to stop ESPN getting free money. This may be people like yourself who wanted to watch but dislike the direction they're going, but it likely includes many more who never really wanted to be subscribing in the first place.
They may be able to regain the former, but the latter is a reality of cost cutting that will not be changing soon.
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To add insult to injury I have to add $10.99 a month for Netflix to watch the fantastic series "Medal of Honor" where my cousin Vito is a subject (S1E5 SO WATCH IT!), 'cause ESPN will not diversify and support other content!
I might just switch over to that channel the kids were watchin' in that flashback scene in the original Terminator movie, you know, fire in an olde TV set.
Good news, I don't think they have a subscription fee. Although I do live in an area where no wood fires are allowed. But, I do have all of those olde OSQ issues and cable bills, so I should be OK until Skynet comes online.
"They" seem to get you coming and going.
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I'll get to my point, so have a little patience here. Have you seen those commercials on TV for "DAZN" (apparently pronounced Da Zone, because we're suddenly back in 1996 when that was just starting to not be cool anymore)? They're the ones with boxer Canelo Álvarez and the Let's get ready to rumble guy.
Anyways, they annoyed me just enough to see what the hell the actual product was, and essentially it's sports streaming. The deals they have in the US aren't very good right now, but if you see what you can get in Austria for the price they're charging... I'd probably sign up.
Well, who is the DAZN Chairman? That would be non other than John "Only poor miserable pricks who live in their parents basement and refuse to have kids" Skipper. Talk about a 180.
Moral of the story: ESPN can go away... I'd rather my $8 a month back.
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One, ESPN is pretty much the most profitable company in this particular space and also one of the most widely and consistently viewed, so is a useful barometer for the space in general. Second, ESPN has spent a great deal of time and effort over the last 30 years cutting deals with cable companies to ensure that every (or nearly every) cable subscription plan includes ESPN. Because of the aforementioned profitability and popularity, they had the leverage to generally achieve this unlike pretty much every other company. This makes it an effective case study for this phenomena, as a significant part of many people's reasons for cord cutting has to do with lack of flexibility in cable subscriptions, including requirements to pay for networks that they had no interest in in order to access other content that they did have interest in. Third, ESPN has been one of the loudest in denying cord cutting was a problem over the last decade, so it's always nice when people have to eat their words.
Or in other words, it is the very fact that cable companies do not allow you to just cancel ESPN that is the entire point.
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Other cord cutting losses
Not only has ESPN lost viewers . . . but cable tv companies have no doubt lost subscribers because of ESPN being forced upon them.
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Lost viewers or lost subscribers?
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Devil's advocate position
The survey says that have 56% are ready to cut the cord tomorrow, but they have lost only 14% of viewers from the peak.
In very round numbers, that says that ESPN is still extracting rent from 50 million consumers that aren't interested in their product. I'm impressed, lol!
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Re: Devil's advocate position
Which leads to a second point that seems to have gotten somewhat scrambled in the article which you and several people have mentioned. As you said, 56% of people are ready to cord-cut ESPN tomorrow, but haven't. The bulk of those are, probably, not sports watchers. They're forced to pay $8/month for ESPN as part of that fat channel bundles cable subscribers can't escape. They put up with it to get content they do want. That's different from viewers (people who actually tune into ESPN in any given time period), which apparently is also dropping. There's a relevant confluence of the two groups, though. As more and more content becomes available via streaming, more and more people can get what they want more cheaply by ditching cable, which hurts ESPN by $8/month/household but it also hurts ESPN another, less direct way. Sports is, more or less, the biggest hold-out from streaming. Sure, there's been some in-roads but not like what we've seen with traditional TV shows and movies. Due to the complicated licensing and demand for live broadcasts of sports, they don't really fit into the on-demand model provided by a service like Netflix, but Netflix and Amazon don't want to piss off that same 56% of subscribers who don't watch sports by jacking up rates to include sports, and they don't have the support systems in place to do it anyway (casters, camera crews, etc.) What we'll probably end up with, eventually, is something that looks like the so-called skinny-bundles where you pay a yearly or monthly fee for access to the sport(s) of your choice, produced by someone and distributed by Netflix or Amazon. Something like that. In the past, ESPN had a good bargaining leverage when negotiating license agreements with various sports entities (NFL, NBA, etc.) because they had a large subscriber base and a large viewer base. The NBA could get a lot of games to fans through ESPN. Eventually, they'll work out a more modern solution - it will probably look a lot like the way you can add HBO to your Hulu account for an additional fee. In the interim, though, with declining subscriber and viewer bases, ESPN is watching it's bargaining power dwindle (and costs rise) each time it renegotiates a license for content, and that's not just the live broadcasts, that's the licensing to use clips and highlights for commentary shows, etc. If they can't find a way to right the ship, which will involve adapting to the current market (the very thing they've been refusing to do), eventually they'll go out of business.
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Re: Re: Devil's advocate position
However, vociferously denying reality here seems to me to be a smart short-term move on the part of everyone in control of ESPN. 50 million subscribers paying rent for something they don't want seems like a great deal for ESPN execs and stockholders!
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It's More Than Cord Cutting
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I cut the cord 6 years ago...
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Re: I cut the cord 6 years ago...
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You really thing I'm going to pay for espn Hulu Hbo and what ever the fuck you call your new service for Star Trek ??? All under different separate internet subscriptions ?
And you wonder why piracy is rising ?
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time and value
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Re: time and value
Sling Orange costs US$ 25 per month.
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BTW, the CEO was on coke during his reign. Let's not forget that salient fact.
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Splitting the baby
That particular equation ("they still screwed up") is correct, but only from the perspective of mainstream US sports consumers.
From the perspective of fans of outlier sports, it's even worse. For the last few years the inclusion of ESPN3 (over the top) in the regular cable sub was a huge boon to fans of "foreign" sports. One could watch cricket, rugby and any soccer not on the cable channels on Roku and other platforms.
Then they moved cricket and rugby over to the ESPN+ service but **kept** the majority of the soccer on the cable channels. Thus splitting the baby.
So now, if you want to see the games the majority of the world watches, you have to have both the cable *and the ESPN+ sub.
The acquisition of Formula 1 rights in the US merely strengthened the splitting of the baby. The venn diagram of these sports is almost a circle.
Ugh.
PS: ESPN is not alone in splitting the baby in this way. NBC Sports has done the same with their Premiere League, Cycling and Rugby coverage. They have moved many off to the NBC Sports Gold service. And from there you have to buy individual passes for individual sports. Where one used to be able to see all Premiere League games on cable, one must now pay for the Premiere League Pass. If one want to watch all the cycling they used to have, one must now pay for the Cycling Pass.
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Re: Splitting the baby --
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Re: Splitting the baby -- Baby-eating zombie alert!
Hoots never stop here.
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The horror.
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No, YOU "personify" "tone deafness"! Sheesh, what clumy phrase:
Try not to mix and mangle your megaphors (sic), and to cut down on adjectives, especially pejoratives.
Dark Helmet has taken my advice on writing. Why don't you?
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You suck so hard at advice, a man in a burning building would rather immolate than listen to you!
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Greed over common sense.
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ESPN is a reason why I cut the cord
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Out of fairness to ESPN, respect to the writers of the article and acknowledgment of all the comments here, I think the underlying message here and the point missing is “ it’s not just an ESPN problem but an industry problem across TV, media, advertising and the current model” There needs to be a rude awakening and reality check on the problems in order to adopt solutions and there are solutions to some of these, albeit it’s going to take tough love, self examination, pain and no gain in some cases to stay relevant in a rapidly changing and digitally transformative world. Content may still be king, data and technology queens, but the customer is lord of the universe.
Most of not all of these activities were non existent 10 years ago or in their infancy.
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NBA coverage and over exposure of Lebron James
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cord cutting?
I stopped watching ESPN with the cord intact. I don't even visit their website anymore (not paying for terrible analysis), which was a daily stop for me once upon a time. They alienate their subscribers/viewers. Many people just got sick of them and found better options.
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