Looks like ESPN is losing chord cutters, and viewers to other sports networks. Mainly, NBC Sports and Fox Sports1.
Losing Millions Of Subscribers, ESPN Now Facing Tough Decisions
No matter your opinion of the "sports leader," ESPN has been the one constant around the sports world for well over a quarter century. Now, with unprecedented competition and some pretty ugly public relations issues, ESPN is seeing its biggest downturn since its inception during the Jimmy Carter Administration.
According to Nielsen, the network has lost 3.2 million television subscribers in a little over the past year (via Wall Street Journal, subscription required).
With Fox Sports 1 debuting and a trend towards fans getting their news from the Internet, this isn’t a huge surprise. Long considered divisive in the minds of many within the general public, ESPN’s reputation has also taken a hit during this span. From enigmatic personalities such as Skip Bayless and Stephen A. Smith to other enigmatic personalities clashing on our airwaves, it seems that the network has gone away from simply providing viewers the news—a philosophy that made it the sports leader in the first place.
Just over the past two months, it’s been announced that Keith Olbermann and Bill Simmons will soon be departing the ESPN airwaves. Clearly divorces based on creative differences rather than tightening its financial belt, ESPN made the decision to part ways with these two big-time players while still airing what some would call the hogwash that Bayless, Smith and company convey on a near-daily basis.
Some analysis points to consumers looking to cut costs by going to more slimmed-down versions of cable/satellite subscriptions, but the drop of ESPN subscribers is an outlier of sorts around the sports world.
The first quarter of 2015 saw Fox Sports 1′s viewership increase by 73 percent from the prior year. And while ESPN’s primary station is still leading all cable sports networks in ratings, Fox Sports 1 and NBC Sports Network just surpassed ESPN2. It’s a minor gain for rival networks, but it also represents a changing of the tide.
Heck, if you look at the total prime-time ratings for ESPN in comparison to Fox Sports 1 in the week ending on July 5th, a trend away from the powerhouse in Bristol is becoming increasingly evident. ESPN saw 593,000 viewers compared to 405,000 for Fox Sports 1.
This is also coming at a time when ESPN’s mother company, Walt Disney, is looking to cut costs based on the station’s lack of growth in recent years. ESPN contributes about 25 percent of the company’s operating profit on an annual basis. Its costs are also sky-high, as the annual fee to air NBA games jumped from $485 million to about $1.47 billion under the renewal of the contract.
With this comes the necessity to add revenue while keeping the network’s spending cost effective. Some industry insiders have floated the idea of ESPN offering a standalone online streaming service, much like HBO and other cable stations offer. However, those same insiders believe that ESPN would be forced to charge about $30 per month for subscriptions—something that wouldn’t necessarily go over well with consumers.
The primary issues here are competition and a lack of appealing content. Viewers will still tune to ESPN for Monday Night Football, college football and other live sporting events. Where it is losing traction is in the nightly news programs and the daily sports-talk sector.
Instead of looking to re-brand itself, ESPN might want to actually go back to its roots. After all, that’s why most of us tuned in to begin with. Until then, people will continue tuning the network out in large numbers—further forcing Bristol’s hands. ESPN’s next move could either lead to renewed growth or narrow the gap between itself and its top competitors in what has quickly become a market full of options for consumers.
http://www.forbes.com/sites/vincentfrank/2015/07/12/losing-millions-of-subscribers-espn-now-facing-tough-decisions/
