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ESPN Loses 4 Million Subscribers In Past Year
I've heard worse news this yearIn the past five years ESPN has lost 11,346,000 subscribers according to Nielsen data. If you combine that with ESPN2 and ESPNU subscriber losses this means that ESPN has lost over a billion dollars in cable and satellite revenue just in the past five years, an average of $200 million each year. That total of a billion dollars hits ESPN in the pocketbook not just on a yearly basis, but for every year going forward. It's gone forever. That's not just bad, this is downright cataclysmic. And it's getting worse. In the past year ESPN lost 4.159 million subscribers, that's another $350 million in lost revenue across the ESPN family of networks. ESPN presently has 88,781,000 subscribers, down from 101,000,000 subscribers five years ago. Given that the rate of lost subscribers appears to be accelerating, if we're conservative and just project ESPN loses 3 million subscribers a year for the next five years, then the worldwide leader in sports will have just 73 million subscribers in 2021. At that point in time ESPN would be roughly break even with the amount of money its paying for sports rights and the amount of money ESPN brings in via subscriber revenue. So where are all these subscribers going? A good theory posited by SportsTVRatings is that the loss is happening three ways, 1. death, 2. cord nevers and 3. cord cutters. Let me unpack those three: first, older people are dying off and they're more likely to subscribe to cable than younger people, second, many younger people don't subscribe to cable at all, hence they're cord nevers and third, many of you are also cutting the cord to save money. Combine all three of these factors and all are working against the cable and satellite bundle. So let's talk about the ESPN business model. I've written a ton about this, but on its most basic level every channel has a cost in your cable bill. You don't realize it because your cable bill isn't broken down by individual channel cost, but ESPN is by far the most expensive channel on all our cable bills. (ESPN is the most expensive channel costing $6.60 a month. The second most expensive? TNT, which costs just $1.65 a month). Every single cable and satellite subscriber pays around $80 a year for ESPN. With 88.7 million subscribers, that means ESPN pockets around $7 billion a year just in cable and satellite subscription fees. So what makes sports on cable TV a bubble? The fact that ESPN uses the money it receives from cable and satellite subscribers to buy sports rights. And the vast majority of those cable and satellite subscribers never watch ESPN. Your Aunt Gladys, who hasn't watched a sporting event in a decade, pays the same amount for ESPN as you do. What does ESPN do with that money from you and Aunt Gladys and its other 88 million subscribers? It buys sports rights. Presently ESPN is on the hook for the following yearly rights payments: $1.9 billion a year to the NFL for Monday Night Football, $1.47 billion to the NBA, $700 million to Major League Baseball, $608 million for the College Football Playoff, $225 million to the ACC, $190 million to the Big Ten, $120 million -- and potentially growing -- to the Big 12, $125 million a year to the PAC 12, and hundreds of millions more to the SEC. This weekend, the NFL opening exhibition game, the Hall of Fame Game will be on cable only. The travails ESPN is having in losing More at the link Via Ace O'Spades and the Perfesser Posted by: badanov 2016-08-06 |
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