ESPN -- "Dead Channel Walking"

[EatemupISU]

This is a fascinating read on the dire situation facing ESPN.

http://www.outkickthecoverage.com/espn-loses-another-555-000-subscribers-per-nielsen-112916

Shorter version:
- Lost over 1 million subscribers in last two months.
- Within 5 years, ESPN's subscriber revenue will not be enough to pay coverage rights.
- Network TV (ie: free over the air) could regain prominence in sports landscape.

For consumers, this is actually great news. But if you extrapolate this to the wider implications, it means we have already reached "peak sports revenue" in a way and revenue going forward may be going down for EVERYONE (this would include college conferences and schools like ISU btw).

 

[Stewo]

I'd have no issues with that. I love the big, cutting edge facilities and whatnot, but this thing has to slow down because it's not sustainable at its current pace.

 

[EYEoftheSTORM]

Love me some Clay Travis. He catches a lot of heat from fans but his point of view is usually reasonable.

 

[stateofmind]

So glad we are a "have" right now... When the next conference shake up happens the conference alignment might not matter as much as a rabid fan base.

 

[Mr Janny]

good article. Thanks for sharing.

 

[CyForPresident]

"Plus, it begs the larger question, if ESPN is going over the top to consumers, why wouldn't the leagues just try this directly themselves? Why do you need ESPN to be the middleman if you can handle distribution as well as they can?"

Boom. Yes, it's called Cyclones.tv

 

[tim_redd]

"Plus, it begs the larger question, if ESPN is going over the top to consumers, why wouldn't the leagues just try this directly themselves? Why do you need ESPN to be the middleman if you can handle distribution as well as they can?"

Boom. Yes, it's called Cyclones.tv

Yeah, I imagine something like a streaming big 12 network. Top game of the weekend is free/ad-supported, rest of the games behind a paywall.

 

[Judoka]

Are there numbers available for BTN? Given how hard they fought to be on the basic cable lineup in the Midwest and Northeast I'd think they probably are also losing a big chunk of subscribers.

 

[KnappShack]

Isn't Amazon in talks with the NBA, NFL, ACC, etc for rights?

Didn't see the Big 12 on the list but why would I expect the conference to be proactive

 

[somecyguy]

While I don't mind seeing ESPN take it in the shorts, the alternative may not be much better. ESPN or not, the NFL, NBA, NCAA, etc are getting paid a lot of money. If all cable subscribers are no longer paying part of that cost, then the full burden falls to us sports people who want to watch those games.

 

[chuckd4735]

This is EXACTLY what the Big 12 is banking on. Its why it was such a horrible idea to add teams to the conference this last go around, and why it was a genius move to add West Virginia over Louisville (much larger fanbase).

 

[Mr Janny]

While I don't mind seeing ESPN take it in the shorts, the alternative may not be much better. ESPN or not, the NFL, NBA, NCAA, etc are getting paid a lot of money. If all cable subscribers are no longer paying part of that cost, then the full burden falls to us sports people who want to watch those games.

it will hit a happy medium eventually, and some sports wouldn't be affected that much. The NFL, for example is only dependent on cable for 2 games per week, (and Thursday is rumored to possibly be on the way out). If MNF wasn't picked up by ESPN again, ABC, CBS, NBC, or FOX would definitely bid on it, and it would be back to free over the air, and paid for solely by advertising instead of subscribers. The rest of the NFL's content would remain unchanged. The problem is really with cable TV. The model in general is way too dependent on channels being subsidized by people who don't watch them. ESPN is just the most expensive example, and so the most visible.

The NBA would be a different story, because so much of their content is cable based, but TBS/TNT have other, non sports programming, so they might not be suffering the same subscriber loss rates that ESPN is.

 

[awd4cy]

Very interesting. ESPN underestimated big time on the number of people that don't care about cable or sports enough to pay their high prices. I myself am enjoying watching this play out. All in all though I wan't whatever is best for Iowa State.

 

[acgclone]

Another challenge for college football will be the huge decline in younger fans and players due to the CTE stuff.

I would love to see numbers. From what I see in my suburban bubble, is that with the under 10 crowd, football is now a niche sport. It wasn't that way 20-30 years ago.

 

[aeroclone]

While I don't mind seeing ESPN take it in the shorts, the alternative may not be much better. ESPN or not, the NFL, NBA, NCAA, etc are getting paid a lot of money. If all cable subscribers are no longer paying part of that cost, then the full burden falls to us sports people who want to watch those games.

I think this is where the bubble pops. If the cost of content ends up tripling because you are no longer subsidizing those costs with cable subs that don't watch sports, I think a lot of people just walk away. I know in this scenario I would probably scale back what I watch, the casual viewing would just end. Or the other option is to cut prices to maintain subscribers. Either way, it looks like the path for continued growth of TV rights for live sports would be at an end.

 

[TykeClone]

I think this is where the bubble pops. If the cost of content ends up tripling because you are no longer subsidizing those costs with cable subs that don't watch sports, I think a lot of people just walk away. I know in this scenario I would probably scale back what I watch, the casual viewing would just end. Or the other option is to cut prices to maintain subscribers. Either way, it looks like the path for continued growth of TV rights for live sports would be at an end.

Or longer advertisement breaks during games...

 

[Judoka]

The NBA would be a different story, because so much of their content is cable based, but TBS/TNT have other, non sports programming, so they might not be suffering the same subscriber loss rates that ESPN is.

ESPN is on basic cable. So unless I'm missing something these numbers are more or less the same as saying "Cable companies lost XXX,XXX" subscribers last month. Which implies that TBS/TNT and everybody else lost the same number of subscribers. ESPN is just the one hit the worst since so much of their revenue comes from subscriber fees.

 

[awd4cy]

Or longer advertisement breaks during games...

You would think that couldn't get any worse, but it sure seems to.

 

[tim_redd]

ESPN is on basic cable. So unless I'm missing something these numbers are more or less the same as saying "Cable companies lost XXX,XXX" subscribers last month. Which implies that TBS/TNT and everybody else lost the same number of subscribers. ESPN is just the one hit the worst since so much of their revenue comes from subscriber fees.

The difference is ESPN gets like $7 per subscriber, every other channel is less than $1 I think. So it's a bigger chunk out of ESPN's pocket.

 

[Trice]

This is a fascinating read on the dire situation facing ESPN.

http://www.outkickthecoverage.com/espn-loses-another-555-000-subscribers-per-nielsen-112916

Shorter version:
- Lost over 1 million subscribers in last two months.
- Within 5 years, ESPN's subscriber revenue will not be enough to pay coverage rights.
- Network TV (ie: free over the air) could regain prominence in sports landscape.

For consumers, this is actually great news. But if you extrapolate this to the wider implications, it means we have already reached "peak sports revenue" in a way and revenue going forward may be going down for EVERYONE (this would include college conferences and schools like ISU btw).

It's worth remembering that Clay Travis works for Fox. Not to imply he's lying or making something up but he has an incentive here to make the competition look as bad as possible.