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.

Filed Under: cable, cord cutting, sports
Companies: disney, espn

ESPN Has Finally Realized This Whole Streaming Thing Has Legs

from the go-figure dept

ESPN has 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.

As the data began to indicate the cord cutting trend was very real, ESPN's first impulse was often to try and shoot the messenger. Meanwhile, execs doubled down on bloated sports licensing deals and SportsCenter set redesigns, pretty clearly unaware that the entire TV landscape was shifting beneath their feet.

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 for other reasons) whose myopia made ESPN's problems that much worse.

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 gave 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.

Even then, the service still managed to gobble up more than a million subscribers in just over five months, a fact ESPN was quick to highlight in a press statement about the milestone:

"Reaching one million paid subscribers is an important milestone for any video subscription service, but reaching this benchmark in such a short amount of time is an incredible testament to the teams from DTCI and ESPN who have worked tirelessly to bring this product to market and continually improve it since our April launch,” said Kevin Mayer, chairman, Direct-to-Consumer and International, The Walt Disney Company. “We’re thrilled so many sports fans have quickly come to love the service. The future is bright and we believe growth will continue as we add features, distribution partners and more exclusive content in the coming months."

While better late than never, you have to think ESPN would have far more than a million subscribers by now if execs had actually paid attention to the market they inhabit. And while ESPN+ is making progress, ESPN still finds itself between a rock and a hard place in terms of providing users what they actually want (again, just a streaming version of 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.

That said, you'd rather be out ahead of a major paradigm shift than trailing behind, a lesson ESPN execs seem to be slowly but steadily learning.

Filed Under: cord cutting, internet, sports, streaming
Companies: espn

eSports Milestone: Pro Gamer Ninja To Be The First Pro Gamer Featured On ESPN Magazine Cover

from the paid-to-play dept

We have been tracking milestones in the maturity of eSports as a real cultural pastime for several years now, given how eSports almost perfectly intersects two main topics here at Techdirt: technology and digital economies. While those that claimed eSports would become a real thing have long been the recipients of skeptical narrow eyes, pro gaming has already zoomed past a number of important checkpoints on its way to legitimacy. Tournaments were heavily viewed overseas at first, but pro gaming then became recognized by universities for athletic scholarships. Next came coverage of tournaments on ESPN, followed eSports leagues being created by some of the major professional sports leagues in America and abroad. Even the IOC kicked around the idea of including eSports in future Olympic Games.

While the latest milestone perhaps isn't as grand as the opening of leagues and new broadcast channels, it is still a notable development that the very first pro gamer will be featured on the cover of ESPN The Magazine this week. That honor will go to Tyler "Ninja" Blevins, who has amassed an enormous following on Twitch and elsewhere.

Ninja revealed the cover on Twitter and said "So excited to be the first professional gamer to be featured on @espn the Magazine. Cover and profile will be shown on Sports Center tomorrow in the 7 AM EST hour."

We'll have to forgive ESPN for the hamfisted Playstation controller icons that accompany the cover image, I suppose. The bottom line is that this ESPN cover is reflecting the popularity of pro gaming, not creating it. Ninja has recorded streams viewed by over a half a million people, putting his viewership at levels that rival smaller professional sports events. Given the adoption of eSports by younger generations, ESPN needs to cater to those interests, if only for purely business reasons.

Still, ESPN is a mainstay in the professional sports world. It's no small thing that eSports has reached a place to be featured on the cover of its magazine. In other words, anyone waiting for this whole eSports fad to wane in popularity appears to have been waiting in vain.

Filed Under: espn, esports, ninja, sports, tyler blevins

Guy In Charge Of EU Copyright Directive Claims He Didn't Know What He Voted On, Needs To Fix Things

from the well,-that-builds-confidence dept

Following the decision earlier this week of the EU Parliament to vote for the destruction of the open web by putting in place some pretty awful copyright proposals, people began highlighting more and more problems with the bill. Most of the focus before the vote had been on two particular articles, Article 11 and Article 13. But there are many other problems in the Directive as well -- it was just getting to be overwhelming to get into the weeds on all of them. One area of concern was in Article 12, which included a special new form of copyright for sporting events. Specifically, with no debate or discussion the legal affairs committee of the EU Parliament added in text saying that sporting event organizers would gain absolute control over recording, sharing and presenting any film clips -- even those that would otherwise be deemed legal in other copyright contexts. And yes, the law implies that if you're at a sports event, you can't even film anything from your own seat as that is reserved solely to the event organizers.

Incredibly, after the vote approving the directive, reporter Emanuel Karisten of the Swedish publication Breakit, asked Voss about this and Voss gave a fairly astounding answer, stating that "this was kind of a mistake" and that "no one had been aware of this." Later he states that he didn't know it was in there and he'll have to fix it:

Voss: This was kind of mistake I think by the JURI committee. Someone amended this. No one had been aware of this.

Reporter: But it was passed...

... discussion by someone with Voss saying that it's really about gambling/betting operations before Voss jumps back in ...

Voss: I didn’t know that this was in the proposal so far, so of course I have to deal with it now.... I do not consider that the commission and council will have this inside the proposal.

Later he says "because of the time and pressure" they concentrated on other areas of the bill. Which... does not seem like a good excuse.

You can listen to the exchange here:

Meanwhile, MEP Julia Reda is calling bullshit on the claim that Voss was "unaware" that this was in the proposal, noting not only that she had written about the issue prior to the vote, but that she had raised it directly with Voss and his colleagues:

There are a few possibilities here, none of which make Voss look any good. He either voted for an amendment he hadn't read and/or didn't understand, or he's lying to this reporter. It also suggests that rather than taking the concerns of critics like Reda seriously, Voss just tuned them out and happily voted away for such horrible proposals.

We've raised questions before about Voss's views on all of this, as he seems almost hysterically uninformed about how actual copyright policy works, even as he drives forward such a horrible policy. This seems to be yet more evidence that a few special interests made it clear to Voss what they wanted to do, and he just agreed to do that, no matter what concerns anyone else had.

Filed Under: axel voss, copyright, eu copyright directive, julia reda, sports

Over The Top Sports Streaming Comes To Europe With Amazon's Deal With The Premier League

from the it's-spreading dept

We've made the point repeatedly that one of the last and most important threads on which the current cable television industry is hanging is that of live sports. While cord-cutting is indeed a thing, the many broadcast agreements pro and major college sports leagues have with cable broadcast partners keeps the cord-cutting from becoming a deluge from a burst dam. That being said, small but important steps have begun with many leagues, which are finally recognizing the demand viewers have for over the top streaming options. While there are still far too many restrictions in these sports streaming options, there is no doubt that American sports leagues have begun snipping away at this thread for cable television.

And now it this practice is coming to Europe as well. Specifically, Amazon has secured a relatively small but massively important streaming broadcast agreement for Premier League soccer.

Amazon has scored the rights to stream Premier League football (soccer) matches in the UK for three years. It’s the first time that Brits will be able to watch a full day of games on a streaming-only service, and Amazon will offer 20 games next season to Prime subscribers at no extra cost. Amazon has secured one of the smaller packages of Premier League games, but an important one over the festive period. Prime subscribers will get access to the first midweek December games rather than the big weekend fixtures, and Amazon will also be streaming all of the festive Boxing Day fixtures.

“This will be the first time a full round of Premier League fixtures will be broadcast live in the UK,” notes Amazon. It’s a deal that will mean British football fans will need to have an Amazon Prime subscription to watch any Boxing Day matches live. Boxing Day is a public holiday in the UK, and it’s a big day of football matches. It’s also the day after Christmas Day, when most British football fans will sit around in their pajamas and feast on leftover Christmas dinner food and watch matches live.

The plans Amazon has for this specific broadcast agreement obviously revolve around more than just revenue from the matches themselves. The timing of the games is key, centered around the post-Christmas holiday. Amazon will be pushing the public to sign up for Amazon Prime so that they can stream these games, while at the same time pushing those same customers to do their holiday shopping on Amazon as well. It's a way to gobble up marketshare in a fairly ingenious way.

But the greater overall effect could be on the cable industry in Europe. Imagine if the viewership numbers for these streaming games compares favorably to broadcast cable television numbers. Suddenly, the Premier League will have found a brand new partner to show its games, one that is motivated by more than just selling advertising during commercial breaks. There's a synergy there that cable TV simply can't have. And, of course, the public would have far less use for cable TV if it can get its sports via streaming.

This trend has and will continue. And it doesn't look good for the cable industry.

Filed Under: eu, football, sports, streaming, streaming sports
Companies: amazon, premier league

ESPN To Combat Cord-Cutting By Putting Once Kinda Free Content Behind A New Paywall

from the that'll-show-'em dept

In reaction to cord-cutting, a very real "thing" no matter what some cable executives will tell you, ESPN has mostly employed two strategies to combat it. The first strategy has been to stick its head as far and deep into the sand as possible, virtually ignoring reality. Once that was no longer possible, the ESPN ostrich lifted its head out of the sand and squawked out a new streaming service, for which it would bill customers $5/month. In that last link, our own Karl Bode wrote:

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.

While all of that is still mostly true, recent revelations about the new streaming service indicate that it's actually worse than Bode described. There will indeed be more content on ESPN+ that users probably do want -- such as MLB and NHL games --, much of the rest of the content offered through the service will be cannibalized from another ESPN property that has previously been kinda sorta "free" if you're a cable subscriber.

ESPN+ is also a way to get some extra money out of current subscribers, ones who might already be used to thousands of live sports over streaming. If this new service sounds a lot like ESPN3, the current online home—provided by many ISPs*—for thousands of sports that aren’t televised on ESPN’s TV channels, you’d be right.

While certain aspects, like the MLB and NHL games, are brand new, one of ESPN3's main draws is a wealth of college games in lesser-watched sports or conferences, as well as expanded coverage of Grand Slam tennis and global competitions like cricket. The network has so far been vague about which leagues and games will get cannibalized from ESPN3, or how many, but ESPN did confirm that some of ESPN3's programming will change.

ESPN3 comes along with many cable television packages that include ESPN's TV channels. The content for ESPN3 has always been the sort that isn't popular enough to air on the channels, but which might interest some customers. College games and niche sports make up the bulk of the lineup. But now ESPN will remove some of that content and put it behind a $5/month paywall, asking customers used to getting this content free, bundled with their cable subscription, to instead pay another $60 per year for it. Same content, more money, all while further reducing the value of an ESPN cable subscription, where ESPN still makes most of its money.

How is this a recipe for increased revenue?

You'll still get ESPN3 forced on you by your cable subscription (if you have one), it will just suck a little bit harder. Most of the sports content you want will still only be available through a cable TV subscription, which more and more people do not want. And ESPN+ will cost more money, while only being moderately better in content compared with the bundled in ESPN3.

This is what we call a swing and a miss.

Filed Under: cord cutting, paywall, sports, streaming
Companies: disney, espn

NBA To Experiment With Cheap 4th Quarter Only Streaming Options

from the buzzer-beater dept

As entertainment streaming has officially become "a thing", one leading to massive change in the entertainment landscape, many eyes still turn towards the professional sports leagues. That's because live professional sports is now one of the last big bulwarks against cord-cutting. With that in mind, it's interesting to watch the major sports leagues experiment in streaming, a process that began roughly five years ago in earnest. While Major League Baseball has long led the way, the other leagues are catching up. The NBA in 2014 negotiated a new broadcast deal with Disney and TNT, one in which the league insisted that streaming options be significantly expanded. In fact, 14% or more NBA games are now nationally televised on those networks, with streaming options that do not require cable.

While that sort of deal is to be applauded, it's admittedly fairly vanilla. Put more broadcasts up on streaming services. There's nothing too experimental about that. Especially compared with a new plan the NBA is kicking around for cheap streams of the last quarter of NBA games.

Now the NBA is testing another, obvious-when-you-think-about-it idea: letting fans watch the 4th quarter of a live, in-progress game for just 99 cents.

On Twitter, Vasu Kulkarni shared a screenshot of a notification sent by the NBA app. For less than a buck, he could hop in and stream the end of a game between the Miami Heat and Oklahoma City Thunder. The Verge has reached out to NBA Digital for more specifics on how many fans are being presented with this option. I haven’t seen other screenshots or instances of it, and it’s very possible that the price could change as the NBA tries to find a sweet spot. 99 cents seems like a good one, though. Presumably the usual annoyances with these things (i.e. blackouts for local teams) also apply here.

If those annoyances are indeed still in place with this option, it would be a massive mistake. The whole value in offering these cheap streaming options for the more thrilling moments of a basketball game -- the end of it -- is the ability to draw in the more casual fan to view more broadcasts. Cutting out the local teams, particularly when what's considered a "local team" is so tortured and laughable for so many markets, undercuts that value at the kneecap. Regardless, it's good to see a league with this much sway experimenting in this way.

According to Darren Rovell of ESPN, these experiments are unlikely to end merely with end-of-game sequences.

ESPN reporter Darren Rovell predicts that the NBA could turn micro-transactions into a “significant revenue stream” for fans who want to catch the pivotal ending moments of a game. It’s a tiny, tiny fraction of the price of a full League Pass subscription, so it’s a much easier sell for casual fans who would hesitate to fork out for the big package but have no issue paying 99 cents when they get a push notification about a close, high-stakes game. Silver also mentioned the possibility of these streams being offered when a player has a chance of breaking an all-time record or reaching other notable achievements.

As the Verge post notes, this is somewhat akin to the NFL's RedZone channel, but you pay for what you want and nothing else. Hopefully the antiquated barriers come down along with this experiment and hopefully we'll see more and more creative options put forth by the leagues as well. If nothing else, it should make some large cable providers start quaking, and that's always fun.

Filed Under: discounts, innovation, sports, streaming
Companies: nba

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 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.

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.

Filed Under: cord cutting, espn, sports, standalone, streaming
Companies: disney, espn

NFL Expands Streaming Even Further With New Deal With Verizon, Which Will Make Mobile Streaming Non-Exclusive

from the stream-dream dept

Long-time readers of Techdirt will know that for as long as I've written here, I've screamed for professional and college sports leagues to offer better streaming options. It has never made a lick of sense to me that an industry so reliant on eyeballs and advertising revenue would want to limit either by keeping people from watching their games. While we're not where I'd like to be, much has changed in the intervening years. Streaming from pro sports leagues has advanced considerably, both in terms of quality and availability. And, perhaps more importantly, this march has only gone in the direction of more and better streaming options.

A march that continues into the present, in fact, as the NFL appears to be on the verge of inking a new streaming deal with Verizon that is just as important for what it does not include as what it does. We'll start with what Verizon gets from the deal, which is an end to the hilarious limit on screen size for the NFL streaming product.

Verizon and the National Football League are in talks to sign another streaming rights deal. According to a Bloomberg report, the wireless provider and the NFL are close to finalizing a new deal that would let Verizon stream games to Internet-connected TVs, tablets, and phones. Verizon's previous deal only allowed it to stream games to devices with screens that are 7-inches or smaller, so the new deal would open up NFL games to Verizon customers who primarily consume TV content on smart TVs, tablets, and other large devices.

This tells us a number of things. First, it tells us that Verizon is betting relatively small phones aren't the only devices that NFL fans want to watch NFL games on. With the explosion of Smart TVs and mobile tablets with 4G connections, fans have never been more ready to stream an NFL game from so many places, whether it's on the go in transit or in front of a computer screen or tablet at home. Likewise, these deal terms tell us that the NFL too sees value in expanding streaming generally (more on that in a minute). No longer attempting to limit this deal specifically to smartphones, the NFL is knocking over the dam keeping streaming at bay. This, in case it wasn't obvious, should be shiver-inducing for terrestrial and cable TV networks that used to be the dominant players for sports broadcasts.

But what's not in the Verizon deal is what demonstrates just how big an opportunity the NFL sees in streaming.

According to people familiar with the matter, Verizon would also lose exclusive rights to air games on mobile devices as part of the deal. That means that while Verizon customers would have more device options for watching football, it may not be the only one to stream NFL games. Other wireless providers or streaming TV providers, such as Sling TV or DirecTV Now, may be able to strike their own deals with the NFL and provide streamed games to their subscribers through their own apps.

That's a big deal, particularly for a league that has operated with exclusivity deals essentially as a business mantra. Born of the era of network television, the NFL has long maintained these types of close broadcast partnerships, but now that is slipping away when it comes to streaming. And ultimately that's the only move that makes sense, as eyeballs and advertising revenue will be spread far and wide through the NFL's own network, making the real estate for ads on its broadcasts all the more valuable.

Streaming keeps expanding in pro sports. It's a great thing for everyone other than cable TV.

Filed Under: football, sports, streaming
Companies: nfl, verizon

Adidas Opposes Turner Broadcasting's ELEAGUE Logo Trademark Because Of Lines

from the those-damned-lines dept

eSports, the once fledgling video game competition industry, has undergone several milestones in rapid succession as it grows into a true entertainment player. Once relegated to online streaming broadcasts, mostly run out of a few Asian and Pacific Island countries, eSports is now regularly broadcast on American television, including by ESPN. From there, it was a fairly natural progression for universities to take notice and begin organizing school eSports teams, as well as offering scholarships for eAthletes.

But while these milestones are both important to and positive for the eSports industry, not all milestones will always be so happy. I would argue that it's a milestone of sorts that a real-world athletic apparel company, Adidas, is suing an eSports league over its logo. Turner Broadcasting has invested in a venture called ELEAGUE, which has been broadcasting eSports for the better part of two years. Turner registered several trademarks for ELEAGUE, including the following logo.

Regular Techdirt readers will have already guessed why Adidas has opposed the trademark for the logo. Going back for what feels like time immemorial, Adidas has jealously protected the broad but admittedly iconic three-stripes logo it has cultivated for itself. And while even we skeptics can carve out a space for Adidas to have a valid claim on that sort of mark, it's been Adidas' aggression in going after anyone using anything even remotely similar to three-stripes regardless of shared industries, notable variations in branding, or actual customer confusion.

Which doesn't keep the company lawyers from pretending otherwise in oppositions such as this one against ELEAGUE, of course.

The opposition is filed on two counts—confusion and dilution.

The first alleges that the similarity between the two logos, that they consist of three broken lines, and "the fact that their respective goods and services overlap or are otherwise closely related" means that the ELEAGUE logo could create the impression that events are sponsored or endorsed by Adidas. While Adidas acknowledges that it does not do business in esports—although it is the shirt sponsor of Counter-Strike team North—esports is "within the natural zone of expansion of adidas’s business and goods and services".

On the second count, Adidas contends that the similarity between the brands will dilute the strength of the Adidas logo as a hallmark of authentic Adidas goods. That, Adidas say, would damage their brand.

Again, I suppose it's a milestone of sorts that a big player like Adidas files a trademark opposition under the theory that real-world athletic apparel and eSports broadcasts are in related industries. Still, the claim is an obvious stretch. The actual ELEAGUE logo calls to mind the letter "E", not Adidas' stripes, and the associated branding throughout the rest of the logo act as a clear source identifier. Pained concerns about customer confusion on the part of Adidas would seem to be laughable on their face, nevermind the question as to why it took so long for Adidas to undertake this if there is so much customer confusion and dilution.

Turner Sports first filed the trademark application in June 2016, but it took Adidas until Oct. 10 of this year to file the opposition.

It sure seems like the kind of harm Adidas is claiming would have required hastier action than a year and half's worth of waiting. Hopefully those reviewing the opposition will take that into account and grant ELEAGUE its mark.

Filed Under: eleague, esports, lines, sports, trademark
Companies: adidas, turner broadcasting