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Nielsen estimates ESPN lost 555,000 subscribers during the last month

138 points| perseusprime11 | 9 years ago |outkickthecoverage.com | reply

174 comments

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[+] moonshinefe|9 years ago|reply
Excessive advertising. In the NHL, they used to have nice white boards around the rinks, now they're all plastered with ads. More and more commercial breaks during games. Heck, now there are even 'mini-ads' that aren't full commercial breaks but just show up for 30 seconds then it returns to the action. Let's not get started with picture-in-picture ads like F1 has.

They've even started digitally projecting ads behind the goalie nets on the glass. It's just becoming ridiculous. Are they not making enough money already?

If it weren't for old people set in their ways and sports, I think cable would basically die. It looks like that may be happening soon anyway, as younger generations would rather just watch shows commercial free and find alternative sports to watch (such as esports).

I'm not old enough to have seen it, but I've heard some people say half the point of paying for cable way back in the day was so you _didn't_ get ads. That seems to be the case for newer, streaming services.

[+] pwg|9 years ago|reply
> but I've heard some people say half the point of paying for cable way back in the day was so you _didn't_ get ads.

There were at least three reasons.

1) In most markets, there were a grand total of 3-4 major stations. If one lived in one of the larger market then there might have been one or two extra PBS stations. Cable marketed 25 or 35 or 40 channels to the existing 3-6.

2) In a lot of locations, analog reception was terrible (ghosting, static, etc.). Cable marketed a crystal clear picture as an alternative to the ghosts and static.

3) Fewer commercials. Yes, in the early beginning, they did indeed have fewer commercial breaks. Some channels had none, or only had a 4-5 minute break between programs. Those days from cable's start are long gone today.

While cable did market itself early on as 'less commercial breaks', #1 and #2 above were likely the larger draw, and with the costs then (mid 1970's) of $20-30/month appearing smaller than today's $150+/month cost, it was a somewhat easy sale.

[+] usrusr|9 years ago|reply
> I'm not old enough to have seen it, but I've heard some people say half the point of paying for cable way back in the day was so you _didn't_ get ads. That seems to be the case for newer, streaming services.

And just yesterday I discovered my first "supported by product placement" disclaimer overlay in a Netflix show. Not a big deal, probably just them getting in line with local regulations, but it might be a harbinger of things to come. Not cutting up the goose that lays golden eggs might just happen to be something that high stakes capitalism is not particularly good at.

[+] Shivetya|9 years ago|reply
Broadcasters have been overwriting stadium ads for awhile now. Digital insertion was fine when it was used to enhance games, showing down lines in American football, following a puck in Hockey, and more. However the ethics around insertion of ads apparently escaped the industry, it would have been fine but I am awaiting the day where you don't know where the scene is real or not. They probably could put everyone in a Coca-Cola shirt in the stands with the tech available. More fun, they could digitally ad fans to stadiums.
[+] blinddev|9 years ago|reply
There was also a push to put ads on the player's jerseys. This is already common in sports like football/soccer. It is just visual noise at this point.
[+] bachmeier|9 years ago|reply
My son will soon be a teenager. He has little interest in watching TV. His default is to go to YouTube and check what's new.

Cable TV was an improvement on over-the-air broadcast networks. It's had a good run, but serves little purpose today, being inferior in all ways to the internet. It's just not worth $70, $100, or $140 a month. Our bills rose and rose until we shut it off completely and permanently - there are limits, and TV executives don't seem to understand that.

[+] thirdsun|9 years ago|reply
> My son will soon be a teenager. He has little interest in watching TV. His default is to go to YouTube and check what's new.

Of course. I'm 30 and if it wasn't for live sport I'd never watch TV and even that is going away: Sky Germany lost the right to the british premier league and before that the spanish La Liga. Both, as well as the italian and french football leagues, are legally available at DAZN for 10 bucks a month. It's a great deal.

However besides sports the program just isn't there. It can't be since its priority is to find the lowest common denominator and please everyone. Which results in nobody getting what they actually want. YouTube doesn't have those limitations - you'll find in-depth content for any kind of niche interest and I welcome it.

I can only assume that traditional TV is even less interesting to today's teenagers than it is to me, someone who grew up with it.

[+] MicroBerto|9 years ago|reply
> TV executives don't seem to understand that.

Oh, they completely get that, but this generation of executives are ride-or-die into retirement. They don't care about the future of their companies.

They're going to pick the carcass as long as they can, parachute out with everything, and leave it just in time to go the way of Blockbuster.

[+] gambiting|9 years ago|reply
I'm 25 and I never had TV when I moved out of my parents house. I mean, I obviously had "a" TV, but never used it to watch TV, cable - I basically use it as a display for my PS4 and to watch netflix, that's it. My ISP wanted to bundle a TV package with my broadband, but I just have absolutely no interest in watching it, it's a waste of time.
[+] JustSomeNobody|9 years ago|reply
Oh, but they do understand that and that is why they also control the internet. Ok, just the tubes, but still. As more and more people start cutting cable tv, watch what your internet bill looks like. Up, up and way too much!
[+] wslh|9 years ago|reply
Yes, and I don't know in US but Cable TV started with a lot of channels without advertisements. Now, you are paying Cable TV and the channels are full of advertisements, so it is not clear why you are paying.
[+] kgilpin|9 years ago|reply
Yes. Youth of today will will sit in a room that has a TV and watch shows on their phone. TV is like Facebook for them, an artifact left by a previous generation.
[+] drzaiusapelord|9 years ago|reply
> there are limits

My U-verse TV was at least $120 a month considering I had two boxes and HD (why is HD a fee in this day and age?) I dropped it for two FireTV's with Playstation Vue and Netflix and because I have Amazon prime I get all the Prime TV and Movies. We pay $50 a month now for TV and get an unbelievable selection of TV's, movies, and Netflix/Prime originals.

I think the only reason we had ESPN was because it had to be bundled with the package with Bravo and E! my wife wanted. How many people are paying for ESPN when they don't need it? The bundling is completely out of control with cable TV as well as the box rental fees. How can Amazon sell me a wonderful box that has a great interface and has native apps for Netflix and other services for a one-time cost $99, but U-verse and Comcast want me to pay $20+ a month for their shitty boxes. Over a few years I've paid for those boxes several times over! Consumers aren't stupid. They've been ripped off for decades but its only recently we can get a cable-like experience with cable-cutting.

Sadly, the margins on these services are very high so neither AT&T or Comcast wants to do price cuts. AT&T is instead launching its Vue competitor instead of making its cable problem more competitive. I think these companies want to continue to milk non-cablecutters for as long as possible and try to bring back cablecutters with these services, which ultimately reward the bad practices of the cable industry. So its almost like the worst of both worlds.

[+] dhogan|9 years ago|reply
Even my mom is done with cable and she is far from a techie. It's getting easier for the masses to not have cable.
[+] imagist|9 years ago|reply
At least in the US, there's a strong investor preference for growth stocks. This often drives companies to keep trying to increase revenue from saturated markets rather than stepping back reinvestment and paying a dividend.
[+] lintiness|9 years ago|reply
most cable tv bills come bundled with internet which is half or more of the cost. the best internet provider where i live just so happens to be the cable tv company, so there's not much choice.
[+] Animats|9 years ago|reply
The major sports industry may have a problem. Especially Major League Baseball™, with an average viewer age of 53.[1]

[1] http://www.cnbc.com/2015/07/12/baseballs-advertising-worries...

[+] mmanfrin|9 years ago|reply
MLB deserves a special level of scorn for building the technology to bring them in to the digital age and then blocking a majority of users from seeing their favorite team. Local blackouts are fucking asinine -- especially when the service itself costs $120.
[+] ilamont|9 years ago|reply
Grew up a Red Sox fan, watching free games on broadcast TV every week and attending games for less than $10. At one point in the mid-80s bleacher seats were $2.

Left Boston, came back 8 years later, found that you can only watch games on cable and tickets are unbelievably expensive. The Red Sox's new owners want to make a lot of money and hire top talent to make them a winning team. But not all fans can afford to go along for the ride.

Now I have a family. We don't have cable so my son can't watch 95% of games on TV. The one time four of us went to Fenway it was nearly $400 about 15 rows back from the third base line. How can anyone keep that up? He never got a chance to be a fan like I did.

[+] Zaheer|9 years ago|reply
Correlation doesn't imply causation may be the wrong phrase here but as people get older they have more free time to watch these sort of things. Therefore it's possible the older folks passing are simply going to be replaced by younger folks aging. I have 0 evidence, just proposing a thought.
[+] hyperbovine|9 years ago|reply
To be fair, the average age of those viewers was 35 at first pitch.
[+] tom_b|9 years ago|reply
As a youth baseball coach, I have noticed that none of the players talk about a favorite baseball player or team. We're cord-cutters and my own kids never even mention watching a game. Not a good sign for MLB.
[+] seibelj|9 years ago|reply
I would be happy to pay for ESPN on my Roku exactly as I do HBO Now. $10/month max, cancel anytime. I would subscribe for NFL season only and quit right after. Otherwise, I use HD antenna for local games and the occasional streaming website for a game I really want to see. I really don't care for their commentary.[0]

[0] http://www.espn.com/video/clip?id=17823563

[+] jmnicolas|9 years ago|reply
Does someone know why this is happening? This is not explained in the article.

I'm not American, don't have a TV and don't like sports but I'd like to know why they're loosing so much subscribers now. Is it the economic situation or people found a better alternative to watch sports?

[+] raverbashing|9 years ago|reply
The main sport being played is how many ads they can have in the least amount of time and space

It's incredibly alienating

Yes, major leagues are to blame, what comes around goes around

[+] pryelluw|9 years ago|reply
TV is now to the smartphone what radio was to the TV. It still a viable marketing tool in some instances but has lost most of its power. Facebook is the new NBC. Twitch is the new ESPN (e sports are growinf like crazy). There is an amazing opportunity for those who recognize this and evolve their approach to fit the different mediums.
[+] legodt|9 years ago|reply
What is only touched upon in the comments but not often discussed in depth in these articles- is ESPN losing subscribers who had eyeballs on their content or is the majority of this continued slide the effect of general cord cutting rather than conscious unsubscribing? I would love to see some more detailed analysis on this breakdown.
[+] cmurf|9 years ago|reply
Good? The games take entirely too long, not least of which is all the advertising that disrupts the natural flow of the game.
[+] gcb0|9 years ago|reply
BS detector is high on this article

> But those sports rights costs are going up and those subscriber revenue numbers are going down.

i doubt sports rights are going anywhere if even espn can't pay them.

[+] slantaclaus|9 years ago|reply
Luckily for us Disney shareholders we've been getting raked over the coals for a year now. Hopefully this has already been priced in. Plus, the ad revs for a captive (read: live) audience are pretty rich.
[+] heisenbit|9 years ago|reply
The cable network channels ESPN and Discovery are between a rock and a hard place. Bidding for content from entitled sports is more expensive but their customers are running.

Individual customers are cutting cord.

Resell customers are barking at the price of the packages. German public television decided NOT TO COVER THE OLYMPICS due to the high price Discovery was charging.

Emerging new channels (Twitter, Youtube, Amazon, Netflix) are getting their own original content.

[+] f1nch3r|9 years ago|reply
Doesn't this also mean that cable companies lost 555,000 subscribers last month? The only way for me to get ESPN is with a basic cable subscription.
[+] kyriakos|9 years ago|reply
Netflix for international live sports is the next big thing. It's extremely hard to get around the licensing though.
[+] commandar|9 years ago|reply
Legacy broadcast contracts are a huge problem here. I only care about hockey, but NHL.tv is a complete mess from an audience perspective.

$120 a year theoretically gets you streaming for the regular season.

Unless you're considered in-market for the team you want to watch, in which case, the games are blacked out for you since they're available on regional sports channels.

So say you live out-of-market from the team you want to watch. Great! Now you can stream all the games live... unless it happens to be broadcast on national TV, in which case you get blacked out.

It's literally impossible to give the league money and watch all the games you want to see without also having cable and it's all because of the tangled mess of agreements with regional cable channels.

[+] kriro|9 years ago|reply
The NFL is ahead of the curve here. Their streaming option for me as a non-US person is amazing. It's not cheap (250 Euro iirc) but it's also a ton better than normal games. Since I have no spoilers here as NFL results aren't even reported my usual NFL watching is:

RedZone (simulcast) for the batch of early games on Sunday which is roughly 19h-22h over here. Then watch the remaining Sunday games, including SNF on Monday in their cut down all snaps only version (about 45 minutes each compared to the normal 3.5h) and the MNF game on Tuesday (TNF on Friday or Saturday usually). If need be that can be shifted back a day (Sunday Redzone on Monday etc.)

All games archived and reviewable, All22 perspective is also nice to do some analyzing every now and then. The bundle includes Playoffs and the SB and some other stuff. I usually also watch Hard Knocks before the season for example.

[+] joering2|9 years ago|reply
Theoretically speaking... couldn't a startup mimic Uber?

An app that I can find someone who has their cellphone pointing at their screen LIVE with a game on... and I pay that person pennies to watch it.

AFAIK there is some sort of a loophole that re-brodcasting even live show by recording it off of your screen (showing TV frame etc) is not illegal.

Am I wrong?

[+] kimshibal|9 years ago|reply
Not in China. We have free HD sport. F1, Premier League, La Liga, NBA and everything. Just download an app on Chinese app store, you are good to go.
[+] Hondor|9 years ago|reply
It seems they've got about 90,000,000 subscribers, so 500,000 is only half a percent drop. As the article projects, it'll still be many years before they're disrupted out of business.
[+] pwg|9 years ago|reply
The premise of the article is not that a 500,000 drop is significant by itself. It is that ESPN has huge contractual costs to teams/leagues to carry sports over the next several years that cost enough that they need (for example) 85,000,000 subscribers minimum in order to pay their overhead costs.

So it is not a 500,000 loss against 90,000,000 total, it is a 500,000 loss against a buffer of 5,000,000 [1] extra beyond the minimum subscriber point they require to bring in enough money to pay their obligations. 500k against 5M is a 10% reduction in their buffer zone in one month.

[+] leepowers|9 years ago|reply
There's only two good things that ESPN broadcasts:

* Live Sports * "30 for 30" documentaries

Aside from these it's mostly noise - sports commentary and sports news. Which, not incidentally, are the cheapest forms of programming on the channel. Quality programming will almost always find an audience in the Internet era. ESPN has a lot of low-quality filler that viewers simply don't want to pay for.

[+] dnackoul|9 years ago|reply
I used to watch Sports Center for highlights (now the internet makes sure I don't miss anything noteworthy) and occasionally the talk shows (which now rarely cover inside the lines topics). I think without reliable non-event programming it's hard to justify an entire channel.
[+] jordanbaucke|9 years ago|reply
Started seeing them doing 'eSports' drops occasionally now... gasp! (I thought their long-form "OJ" documentary was excellent!)
[+] Shivetya|9 years ago|reply
One thing to also take into understanding, for the heavily negotiated games like American football, baseball, and basketball, less revenue from TV contracts will certainly affect future negotiations with their respective player unions. It will be curious when that profitability number is crossed and how the leagues adopt to it. They can only squeeze broadcasters and fans so much.
[+] lordnacho|9 years ago|reply
Perhaps someone could give us non-Americans some insight into how TV works over there.

Whenever I'm visiting relatives, it's just this huge mess on TV. They have the same shows like Big Bang Theory, but it's not clear to me how it's distributed. Some channels seem to be local, while others seem to be planet-wide like CNN. The amount of advertising is insane, I can't watch it. Also there's these low quality local business ads that you never see in Europe.

What's a network, what's cable, what's a blackout, and what does it matter?

Also, what is the impact of free internet video? I can pretty much watch any soccer match I want by googling it during the match, including some quite obscure ones. Could it be that US sports viewers have discovered this as well? In fact the US sports lend themselves to highlights, because they're so incredibly long and full of ads.

[+] raverbashing|9 years ago|reply
It's funny, because I never realized TV in Europe had those differences (and I watched some of it)

Cable is basically subscription TV (like Virgin Media in the UK and some countries, Canal+ in France, in Germany they have KabelDeutschland, UPC in the Netherlands, SKY via sattelite, etc)

Network is a channel basically (BBC might also be considered a network since it's a collection of channels with the same owner, but you have France 1/2, etc, ARD, ZDF, ProSieben in Germany, SkyNews in the UK)

The difference in the US/Canada (and other countries in the American continent) is that usually you have some local programming (State/Province/City level). So you usually have a local news program dealing with, for example, State News (this also happens in Brazil and some other LATAM countries). And you bet the local low-quality ads happen everywhere (but not necessarily go to the TV)

[+] figgis|9 years ago|reply
You order a subscription to various channels via cable, satellite, etc.

Shows are run on a schedule, television sets usually include the ability to set recordings for showings. Most people just set it to record the newest episode of every show they want to watch and catch up their shows that way, deleting watched shows as needed. Unless it's a show they are really interested in and obviously you can tune in to the scheduled showing if you remember the time.

The subscriptions you purchase usually include a set amount of local or regional channels (depending on where you live). You can also pick up local channels via an antenna or similar methods.

It's hard to be a sports fan without cable. They have blackouts on games where channels can't display games based on your region.[0] Or not being able to stream certain games online for a multitude of reasons.

[0]https://support.espn.com/articles/en_US/FAQ/What-is-a-Blacko...

[+] AnAfrican|9 years ago|reply
Blackouts in Europe don't happen because most right-holders are national.

But basically, a particular sports event shown on one channel will not be broadcasted because another channel holds the rights in that juridiction.

It happens a lot on Sattelite TV in Africa...

TF1, the biggest French Channel is broadcasted on Canal Sat Africa. TF1 shows Formula One events. But they only hold the rights for France.

Since Canal Plus (the channel) or SuperSports (South African Channel) hold the rights for Africa, TF1 is blacked out during Formula One events.

[+] johnny22|9 years ago|reply
the local channels tend to be affiliates of the biggies like NBC, ABC, CBS, and Fox. We tend to refer to that as "Network TV". Bigger cities likely have more variance, but I"m not too familiar.

The local channels sell advertising to local businesses, while also showing ads from the national network.

Blackouts are (i think) specific to sports, and I'm not too familiar with them.

[+] CaptainZapp|9 years ago|reply
I really don't get why you're downvoted.

It seems like an honest question, which, unfortunately, I can't really answer for you.