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.