Failures

by Karl Bode


Filed Under:
cord cutting, espn, ratings, subscribers

Companies:
disney, espn, nielsen



Despite ESPN Whining, Nielsen Confirms Historic Subscriber Losses For Channel

from the not-just-a-river-in-Egypt dept

Last week, we noted how Disney and ESPN threw a bit of a hissy fit when Nielsen data indicated that ESPN had one of the biggest subscriber losses in company history last month. According to Nielsen's data, ESPN lost 621,000 homes in a single month, as well as losing 607,000 ESPN2 households and 674,000 ESPNU homes. That's of course on the heels of losing more than 7 million subscribers over the last three years or so, thanks largely due to the rise of cord cutting, cord trimming (scaling down your TV package) and the rise of some "skinny bundles" that exclude ESPN from the base channel lineup.

ESPN demanded that Nielsen withdraw its numbers, insisting they represented a "dramatic, unexplainable variation" that didn't match ESPN's own numbers. Nielsen obliged, but after conducting an "extensive" review of the numbers found them to be "accurate as originally released." Of course, this shouldn't be a surprise; we've noted how everybody but ESPN appears to have seen the writing on the wall. But instead of adapting to the changing times, ESPN responded by denying that cord cutting was real, and suing companies like Verizon for trying to bring some flexibility to the traditional cable bundle.

Not too surprisingly, ESPN's response in light of Nielsen confirming its numbers was to continue denying the very obvious fact that customers are tired of paying an arm and a leg for sports programming many of them simply don't watch. From an ESPN statement given to the media:
"This most recent snapshot from Nielsen is a historic anomaly for the industry and inconsistent with much more moderated trends observed by other respected third party analysts. It also does not measure DMVPDs and other new distributors and we hope to work with Nielsen to capture this growing market in future reports."
Except it's not an "anomaly" at all if you've been watching ESPN's subscriber base drop 2-4% per year right alongside dips in other broadcast ratings. Even sports, long believed to be the untouchable holy grail of television programming, has been suffering a notable decline as younger viewers look for cheaper, more flexible alternatives to the bloated cable bundle. ESPN's response to these challenges? Either outright denial or incorrect claims by company executive John Skinner that these departing customers are old, poor, and not worth keeping anyway.

ESPN is the biggest beneficiary of the old method of bloated, overpriced channel bundles, but like so many broadcast and cable companies, it's too terrified of prematurely harming the existing cable TV cash cow to try anything truly innovative. As a result, the company is seeing historic losses in subscribers, with apparently everybody but ESPN seeing that this adaptation (like a standalone streaming service) will need to come sooner rather than later.

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  • icon
    TechDescartes (profile), 7 Nov 2016 @ 11:59am

    You would think that the ESP Network would have seen this one coming.

    reply to this | link to this | view in chronology ]

  • icon
    streetlight (profile), 7 Nov 2016 @ 12:30pm

    The home team paradigm might be one problem

    Besides the TV viewer that has absolutely no interest in sports, a TV viewer might be at home thinking of watching something and is mildly interested in sports so checks the listings. The home team (basketball, baseball, hockey, football, whatever) isn't on so looks elsewhere for some entertainment. The viewer finds a couple of good movies not seen, checks out IMBD for ratings and forgets about sports. After some years of finding home teams are almost never on ESPN and isn't interested in Frisbie golf, decides money can be saved by not subscribing to a package that includes ESPN. Of course, the high cost of the subscription is what ESPN has spent "billions and billions" of dollars for - sports, like basketball, that few will watch. Advertisers must also be ticked off because fewer and fewer eyes see their ads but are unwilling to pay higher fees to subsidize a failing network. ESPN has cash flow problems and starts firing it's high paid analysts. Even sports fanatics become upset at the lower quality of on-air "talent" and move away. ESPN needs a new business model as well as the sports team industry.

    reply to this | link to this | view in chronology ]

  • identicon
    PRMan, 7 Nov 2016 @ 12:31pm

    To be fair...

    ESPN's entire complaint is that Nielsen does NOT count cord-cutters watching their WatchESPN service through Sling or Vue, like I am.

    That's what "It also does not measure DMVPDs and other new distributors and we hope to work with Nielsen to capture this growing market in future reports" means.

    It's a legitimate complaint and Nielsen is a well-known dinosaur when it comes to these things. Unfortunately, ESPN will still lose money on ads until the dinosaur figures out how to count.

    reply to this | link to this | view in chronology ]

    • identicon
      The Apache, 29 Dec 2016 @ 2:39pm

      Re: To be fair...

      Good argument -- however, espn might be streaming on Vue and Sling, they most certainly are not collecting the $6.80 they are getting from the cable companies. I'll guess that it's half that at best. And the fact that Sling is offering the non-espn version at a steeper price than then version that includes espn, makes this investor think espn is getting somewhere around ONE or TWO dollars from Sling and less from Vue.

      reply to this | link to this | view in chronology ]

  • identicon
    Bruce C., 7 Nov 2016 @ 12:31pm

    Up Next

    MLB signs exclusive new broadcast/streaming contract with YouTube Red.

    ...or Amazon or Netflix or Hulu... One of the streaming services will be willing to overpay a bit to nail the lid on the coffin of traditional sports broadcasting, and then the floodgates will open. ESPN has held streaming of sports hostage to their broadcast service, but eventually, someone will be willing to pay enough for streaming that ESPN won't be able to match because of the lost subscriber streams.

    reply to this | link to this | view in chronology ]

  • icon
    sehlat (profile), 7 Nov 2016 @ 12:37pm

    And For Those of Us Who May Watch One/Two Games a Year

    My local sports bar also has a Hofbrau. So... for Game 7 of the World Series, my wife and I went there, got a nice dinner and a drink each and then watched the game for less than the cost of one month of cable with E$PN.

    And I make no secret of the fact that I cut my cord back in 1992 and haven't looked back except to pull down and trash the slowly rotting cable more than a decade later.

    reply to this | link to this | view in chronology ]

  • icon
    That Anonymous Coward (profile), 7 Nov 2016 @ 12:42pm

    ...company executive John Skinner that these departing customers are old, poor, and not worth keeping anyway.

    Perhaps we should apply that logic to company executives who are old, overpaid, and not worth keeping unless you want to ride ESPN to the end, which is coming much faster than they want to admit. Even if he assists in driving ESPN into a smoking crater, he still gets a handy parachute... perhaps if you want them to adapt to changing markets you should tie their pay to performance of the network.

    reply to this | link to this | view in chronology ]

  • icon
    Geno0wl (profile), 7 Nov 2016 @ 1:06pm

    As a result, the company is seeing historic losses in subscribers, with apparently everybody but ESPN seeing that this adaptation (like a standalone streaming service) will need to come sooner rather than later.

    Pretty sure that them going to a straight stand along streaming service would actually violate a lot of their contracts which put them on the base package deals. Which is why they have not tried to push into that arena.

    They are stuck in between a rock and a hard place in that respect. Sling TV is their attempt to get into the streaming space.

    reply to this | link to this | view in chronology ]

    • identicon
      Simon, 8 Nov 2016 @ 8:54am

      Re:

      >They are stuck in between a rock and a hard place in that respect

      I know. I love it!

      The cable providers are also stuck having to force ESPN on their subscribers which limits their ability to offer better value packages. Which again helps encourages people to drop cable TV all together.

      reply to this | link to this | view in chronology ]

      • identicon
        The Apache, 29 Dec 2016 @ 2:44pm

        Re: Re:

        I love it too! And I don't know why, because i'm a daily watcher and have been for 35 yrs. BUT espn has become a cess pool of hate and anti-white commentary and it's difficult to imagine this was at one time a totally unstoppable machine. And now - it's in the toilet with NO WAY OUT! Makes me smile and smile - - since i dropped my $180 per month Charter cable pack and now do the $20 Sling pack. Find myself hating espn even more than before!!!

        reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 7 Nov 2016 @ 1:07pm

    In the last year I unsubscribed from all ESPN chanels, UT they did not lose a viewer.

    reply to this | link to this | view in chronology ]

  • icon
    Ryunosuke (profile), 7 Nov 2016 @ 1:12pm

    in other news, horse breeders upset that automobiles are a thing.

    reply to this | link to this | view in chronology ]

  • icon
    mrvco (profile), 7 Nov 2016 @ 2:34pm

    ESPN should invest in original content... maybe rekindle the Hard Knocks franchise!

    reply to this | link to this | view in chronology ]

  • identicon
    freakanatcha, 7 Nov 2016 @ 4:16pm

    espn dumping subscribers like me after a bad mexican meal

    Has anyone estimated the effect of gaming on ESPN? Same male 18-49 demo.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 7 Nov 2016 @ 5:52pm

    The problem is people are cutting the cord and don't give a crap about ESPN. It's the majority of Cable and Satellite subscribers subsidizing the Tiny fraction of people who do watch Sports. These Sports channels are the most costly.

    If they were realistic, only those that wanted the Sports channels should pay, the real cost could be $25-$50 a month extra to get those Sport channels.

    Even SlingTV, ESPN is thrown into the main Bundle and everyone PAYS wither they care about sports or not. It's one reason I don't pay for that. I get most of my TV from the Antenna.

    reply to this | link to this | view in chronology ]

  • identicon
    Simon, 8 Nov 2016 @ 8:50am

    Looking forward to the fallout

    It's increasingly looking as if ESPN has overpaid for certain sports rights and for too far into the future.

    Losing their subsidizing viewers means that the people that really want ESPN are going to have to foot the bill, which as it increases will cause more and more will decide they can live without it. Thus ESPN will raise the costs and the vicious circle repeats. Hopefully a huge correction will occur and the ridiculous price of sports rights will become more sensible.

    reply to this | link to this | view in chronology ]

  • programvb.com

    My local sports bar also has a Hofbrau. So... for Game 7 of the World Series, my wife and I went there, got a nice dinner and a drink each and then watched the game for less than the cost of one month of cable with E$PN.

    And I make no secret of the fact that I cut my cord back in 1992 and haven't looked back except to pull down and trash the slowly rotting cable more than a decade later.

    http://www.programvb.com/2017/03/channel-frequency-alhidaya-tv.html
    http://www.programvb.com/20 17/03/channel-frequency-al-omma-tv.html
    http://www.programvb.com/2017/03/channel-frequency-alathar-tv .html
    http://www.programvb.com/search/label/%D8%AA%D8%B1%D8%AF%D8%AF%20%D9%82%D9%86%D9%88%D8%A7%D8%AA

    reply to this | link to this | view in chronology ]


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