ESPN To Combat Cord-Cutting By Putting Once Kinda Free Content Behind A New Paywall

from the that'll-show-'em dept

In reaction to cord-cutting, a very real "thing" no matter what some cable executives will tell you, ESPN has mostly employed two strategies to combat it. The first strategy has been to stick its head as far and deep into the sand as possible, virtually ignoring reality. Once that was no longer possible, the ESPN ostrich lifted its head out of the sand and squawked out a new streaming service, for which it would bill customers $5/month. In that last link, our own Karl Bode wrote:

There's every indication that ESPN's still only paying lip service to innovation. What consumers say they want is the ability to either avoid ESPN entirely, or buy ESPN the channel on a standalone basis. But it's important to point out that's not what ESPN is actually offering here. The new streaming service won't provide access to ESPN's existing channel lineup unless you have a traditional cable subscription. Without a traditional cable TV subscription, users of the app will be directed to other content they may or may not actually want.

While all of that is still mostly true, recent revelations about the new streaming service indicate that it's actually worse than Bode described. There will indeed be more content on ESPN+ that users probably do want -- such as MLB and NHL games --, much of the rest of the content offered through the service will be cannibalized from another ESPN property that has previously been kinda sorta "free" if you're a cable subscriber.

ESPN+ is also a way to get some extra money out of current subscribers, ones who might already be used to thousands of live sports over streaming. If this new service sounds a lot like ESPN3, the current online home—provided by many ISPs*—for thousands of sports that aren’t televised on ESPN’s TV channels, you’d be right.

While certain aspects, like the MLB and NHL games, are brand new, one of ESPN3's main draws is a wealth of college games in lesser-watched sports or conferences, as well as expanded coverage of Grand Slam tennis and global competitions like cricket. The network has so far been vague about which leagues and games will get cannibalized from ESPN3, or how many, but ESPN did confirm that some of ESPN3's programming will change.

ESPN3 comes along with many cable television packages that include ESPN's TV channels. The content for ESPN3 has always been the sort that isn't popular enough to air on the channels, but which might interest some customers. College games and niche sports make up the bulk of the lineup. But now ESPN will remove some of that content and put it behind a $5/month paywall, asking customers used to getting this content free, bundled with their cable subscription, to instead pay another $60 per year for it. Same content, more money, all while further reducing the value of an ESPN cable subscription, where ESPN still makes most of its money.

How is this a recipe for increased revenue?

You'll still get ESPN3 forced on you by your cable subscription (if you have one), it will just suck a little bit harder. Most of the sports content you want will still only be available through a cable TV subscription, which more and more people do not want. And ESPN+ will cost more money, while only being moderately better in content compared with the bundled in ESPN3.

This is what we call a swing and a miss.


Reader Comments

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  • icon
    Discuss It (profile), 4 Apr 2018 @ 8:18pm

    World to ESPN:

    Dear ESPN,

    Many people like sports but I'm not one of them. I absolutely do not want your channel. In fact, the reason I cut the cord was ... You. I didn't want to keep paying for a sports channel I didn't want, didn't watch, and didn't have the least interest in but was required by the cable company to subscribe to. Net result, not only didn't you gain a customer, the cable company lost one.

    If you want to find the true root of the challenges and falling profits you're experiencing, you have only to look into a mirror.

    Best,
    A former Cable Subscriber - AKA: CORD CUTTER

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

    • identicon
      I.T. Guy, 5 Apr 2018 @ 5:31am

      Re: World to ESPN:

      [Stands up] Hi. My name is I.T Guy.
      It's been almost a year now since I had my last cable TV show. I too, am a cord-cutter.
      [Sits quietly]

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

    • identicon
      Anonymous Coward, 5 Apr 2018 @ 5:49am

      Re: World to ESPN:

      There are a lot of people like you and I think Timothy has missed a big part of this picture.

      ESPN doesn't play very many baseball and hockey games. People that want to watch baseball or hockey will pay for the MLB and NHL services (we subscribe to both). ESPN's service is for very casual watchers of those sports and I think that's why they are only charging $5 / month.

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

    • identicon
      Anonymous Coward, 5 Apr 2018 @ 8:03am

      Re: World to ESPN:

      Same here!!!

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

  • identicon
    Anonymous Coward, 4 Apr 2018 @ 8:41pm

    I too, cut the cord. I don't particularly like sports. Why should I pay for someone else when I don't watch the channel and don't use the channel?

    I've been long enough now with out PPV, I no longer care what ESPN does. I'll not have another TV in my house. Since I am now commercial-less and gotten used to the idea that there is peace in the house instead of being bombarded 24/7 by them, I won't go back to TV. It also means I won't go back to paying for movies and sports events I care nothing about.

    After screwing the public for so long ESPN, you're on your own with the results of your actions.

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

    • identicon
      Anonymous Coward, 5 Apr 2018 @ 8:35am

      Re:

      Our household "cut the cord" close to 10 years ago for mostly the same reasons. We still have 2 TVs in the house on which we watch Hulu and Netflix among other services, all commercial-free. If we get bored with a channel we unsubscribe. Maybe we pick up a different one, maybe we don't. The point is we actively choose what we pay for and what we watch and no cable company is stuffing unwanted selections down our throats/wallets.

      In all this time we've very rarely felt left out or that we're missing some content we want to watch. For those times we did we simply wait for it to appear on one of the services we use or we go without. It's wholly unimportant.

      Cable is a dying technology. I'm more than a little surprised it has even lasted this long.

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

  • icon
    Killercool (profile), 4 Apr 2018 @ 11:14pm

    Completely typical of cable...

    Someone feel free to correct me if i'm wrong, but the cycle has been like this:

    1: Remove content that was previously included in a channel's, or set of channels', lineup(s).

    2: Offer removed content as a "new" channel or service, for an increased fee (of course!) . 3: Maim the "new" service by repeating steps 1 and 2 upon it, but don't reduce the fee.

    4: Charge another, even higher, fee for the new "new" channel.

    5: Repeat ad infinitum, ad nauseam.

    Did I miss anything? Because this applies to a LOT of channels, not just ESPN.

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

    • identicon
      Anonymous Coward, 5 Apr 2018 @ 8:07am

      Re: Completely typical of cable...

      Take this to the next level as people flee as Comcast has done. Cut the cord, complain about Internet hogs. Throw on a 1TB CAP, and force people to pay another $50 to get back the Unlimited service they had.

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

  • identicon
    Anonymous Coward, 5 Apr 2018 @ 2:53am

    "as far and deep into the sand as possible"

    Are you sure that's sand you're referring to?

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

  • icon
    PaulT (profile), 5 Apr 2018 @ 3:32am

    "How is this a recipe for increased revenue?"

    It's not. It's a recipe for ESPN execs to show to less informed shareholders how much they're "trying to compete" while cashing in as much as they can before everything finally collapses.

    I'm increasingly convinced they know they can't rescue this as the old business model depended so much on forcing people who didn't want the channels to subscribe anyway, so they're just making as much as they can before the inevitable occurs.

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

    • icon
      Ninja (profile), 5 Apr 2018 @ 6:05am

      Re:

      This would explain the suicidal behavior.

      Seriously, cable tv is dead to me. If I can't have a streaming alternative to what I want then it doesn't exist. They should be afraid of not existing.

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

  • identicon
    AricTheRed, 5 Apr 2018 @ 7:19am

    ESPN

    ...idiots.

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

  • identicon
    Pixelation, 5 Apr 2018 @ 7:19am

    ESPN exec meeting

    "Sir, people are not watching our shows any longer."

    "I know, make it harder to watch!!!"


    "Profit!"

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

  • identicon
    TRX, 5 Apr 2018 @ 9:16am

    > How is this a recipe for increased revenue?

    Having worked for a company that committed a similar act of hara-kiri, one explanation is that the company is split into multiple semi-independent "business units" that have their own management chain, their own budgets, their own sales goals, and often their own sales networks. They spend their resources competing against each other inside the zero-sum corporate bubble instead of trying to acquire outside income, which is of less importance since that money goes into the corporate hopper instead of their own budget.

    Add another layer of abstraction by having "sales" isolated (or even outsourced) from the decision-makers, who often seem to lose track of the concept that while shuffling corporate quatloos back and forth may be their career path, the company can't pay its bills without outside money from customers.

    Add the idea that customers are a "cost center", and that any money spent dealing with them is a loss, so dealing with them is reduced until there aren't any customers any more...

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

  • identicon
    Anonymous Coward, 5 Apr 2018 @ 10:15am

    "Kid losing popularity vows to hide out so then 'people will really miss me!'"

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

  • identicon
    Anonymous Coward, 5 Apr 2018 @ 10:49am

    I realize not everyone can manage this because they don't have the luxury of a medium or large sized city nearby, but once I put up an OTA antenna and subscribed to Netflix I realized there was very little on cable, or TV in general, I really wanted to watch at all.

    There's plenty of OTA channels here where I live: Des Moines, IA. Each of the networks (major and minor) are represented, plus their secondary channels like the ones that show reruns of older shows and movies. There's two sci-fi/horror/fantasy channels.

    Combine that with Netflix and there's usually something of interest when I want to watch something.

    This is why I don't have cable, for the price of the packages $160/month for their "money saving bundle", I don't get anywhere near my money's worth just compared to 'free' OTA. And I don't subsidize ESPN.

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

  • identicon
    tom, 5 Apr 2018 @ 1:53pm

    To the Daymond John of Fubu. More magazine editor Jonny Lichtenstein recently got involved in dangerous coraption business with crazy CBS anchor Otis Livingston to steal money from Fubu company employees bank accounts never trust Jonny Lichtenstein and Otis Livingston they belong in prison!!!!!!!!!!!!!!!!

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

  • identicon
    TDR, 5 Apr 2018 @ 3:51pm

    In the words of Major League's Harry Doyle,

    "Juuust a bit outside... "

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

  • icon
    Dave (profile), 7 Apr 2018 @ 12:50am

    Tell that to fans of American soccer...

    ...because they're looking at ESPN+ as a pretty good deal. The entire MLS LIVE service, which was about $70/year, is moving to ESPN+, which is only $50/year. Plus, matches from USL (the U.S. 2nd division) will be available on ESPN+, as will select European international matches and some lower-division English matches.

    Admittedly, I'm a supporter for local USL and NWSL clubs, so I know a lot of soccer fans, many of whom are cord-cutters (myself included), and several of whom jumped on the Fulham FC bandwagon when Clint Dempsey played there, which makes ESPN+ even more appealing to them. Combine ESPN+ with Fox Soccer Match Pass ($140/year) and NBC Sports Gold's Premier League pass ($50/year), and that's pretty much an all-you-can-eat soccer buffet for $240/year without cable, and for the PL games are on cable, we can always catch those at the pub.

    ESPN+ might appear counter-intuitive, but it's going to hit this particular niche very effectively.

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

  • identicon
    Peter, 5 May 2018 @ 9:21am

    Fueling a declining interest in sports

    ESPN 3 content used to be free. You could stream grand slam tennis, lower tier college football and basketball games, and more without a cable subscription.

    No longer. So I've uninstalled the ESPN app on all my streaming devices, and my already waning interest in sports now wanes a little faster.

    It takes a lot of nerve to charge for content fraught with ads.

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


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