ESPN still losing viewers

[spuwho]

Per DSLReports.com

http://www.dslreports.com/shownews/ESPN-Lost-Another-38-of-Viewers-in-May-139672

The exodus of viewers away from ESPN shows no sign of slowing down. Nielsen data indicates the channel lost another 3.8% of its viewership in May, nearly a third higher than the median drop of 2.9% for cable channel subscriber losses during the month overall. Nielsen notes that ESPN was in 86.9 million households as of the end of May, down 3.3% from 89.8% one year earlier. These defections continue courtesy of skinny bundles that exclude sports (which ESPN tried to sue to stop) and the slow but steady rise of cord cutting among users that no long want to pay for traditional cable television.

Pivotal Research analyst Brian Wieser says ESPN's losses -- and last quarter's record cord cutting rates -- come despite the fact that the overall number of TV-watching households actually grew by 1.7% (they just didn't subscribe to TV or watch ESPN).
When Nielsen data began more clearly highlighting ESPN's subscriber defections, ESPN originally made a bit of a public stink, insisting the data had to be in error (it wasn't). More recently, ESPN has been conducting a notable number of layoffs, though you'll note the executives that failed to steer the company through choppy cord cutting waters (or, frankly, see the phenomenon on the horizon at all) remain gainfully employed.

ESPN's been losing 2-4% of its subscriber base annually, and monthly losses have been between 500,000 and 700,000 subscribers. Meanwhile, one recent survey suggested that 56% of consumers would drop ESPN in a heartbeat if it meant saving the estimated $8 more the channel costs cable subscribers each and every month.

[Dapperdan]

All cable channels are bleeding customers. The piper has come to collect his payment. Either develop your channel as a stand alone app or license your content to a streaming service. This is the only way to survive. It will be interesting to see how licensing deals shake out now too. NFL may not get as much as it wants anymore for the rights to show its broadcasts. NFL seems to know this too which is why they are experimenting so much with streaming. NCAA and all other sports are in the same boat.

[spuwho]

ESPN started the "double dipping" in content delivery years ago.

"Old cable" had people paying just for carriage. If you wanted commercial free product you subbed to HBO or some premium channel.

ESPN came along and now you pay for carriage, for content and you get commercials. To win big sports deals they added "must carry" in their contracts with cable operators.  Now the revenue source becomes mandatory with any subscriber who enrolls with a cable company.  On top of that they have a radio network that again charges stations fees for carriage rights on top of the bundled commercials that generate yet more revenue, leaving scraps for the local station to try and scrape up advertisers to pay for the carriage fees.

It was a great racket, but people are rejecting it by moving away from cable completely. Radio stations are dropping ESPN for cheaper rates from Fox Sports.

People are waiting for the next link in the chain to start falling.  With less exposure to the audience, ESPN cant charge high rates for advertisers.  In turn they cant pay Sports Inc. the large fees they need to pay the players.

The same will happen to the broadcast networks eventually. Advertisers will see that people have shifted to other content and expect a reduced rate for the same ad time.

The biz model will change shortly there after.