ESPN Hemorrhages 7 Million Subscribers

In a recent article by Ken Fang, Disney has acknowledged that its cable assets including ESPN have lost subscribers, but until last week, it didn’t say exactly how many. When Disney boss Robert Iger said back in August that ESPN had experienced “some subscriber losses,” it sent media stocks spiraling. But in a regulatory filing last week, Iger’s acknowledgement was met with little more than a whimper, but the tempered reaction was due to the fact that the news was released late on Wednesday as investors were getting away for the Thanksgiving holiday.

Iger said ESPN has lost 7 million subscribers standing now at 92 million. In 2013, ESPN was at its peak of 99 million and 95 million in 2014. Cord cutters who now depend on Hulu and Netflix for their viewing are mainly responsible for the drop in subscriptions. Cord shavers who still subscribe to cable, but reduce to smaller, less expensive programming bundles are also seen as a reason for lower ESPN subscriptions.

In the meantime, ESPN remains the most expensive network for providers to carry. It will be interesting to see if future contracts will become protracted carriage fights. Disney and ESPN hope that the trends of consumers dropping cable or dropping ESPN will end soon, but for now, it’s in the midst of a downturn that will likely only get worse.

The current bundling and pricing for cable is no longer acceptable, especially for today's twenty-somethings. They clearly prefer a la carte options. Long-term, there will be reductions to program rights, especially sports programming. The payout outlook for Power Five bloated college football licensing looks to be coming to a close.


dggoddard said...

No doubt this is going to trickle down to local cable providers such as Altitude & Root Sports RM. Which in turn will likely result in less DU TV coverage.

Its the newspaper industry 20 years ago all over again.

Anonymous said...

The future of televised college sports for schools like DU is probably some kind of enhanced streaming model, where colleges use in-house crews and local production to keep costs down.