ESPN Did Plan For Cable's Future, The Plan Just May Not Work
By Ty Duffy
Bloomberg published a piece on ESPN’s future. Such pieces each have the same familiar refrain. ESPN spent a lot on sports rights. ESPN pays for those rights with stupendous cable revenue. Fewer and fewer people are subscribing to cable with each passing month. Problem: imminent.
The pieces suggest ESPN is denying this reality and blithely has been roaring full steam ahead into an iceberg. That’s not the case. The correct question to ask is what would ESPN be doing if they were preparing for the future?
ESPN would want to be really good at streaming content. Watch ESPN is the best and most stable of the sports streaming products. It’s awesome if being a few seconds behind Twitter is not a life or death matter. Disney just made a billion-dollar investment in BAMtech to get even better at doing that.
ESPN would want a lot of sports to stream. They would want to make ESPN essential with premium content such as Monday Night Football and the College Football Playoff. They would want to make sure they were showing sports year round to keep people subscribing year round. From that perspective, having the MLB regular season (April to September) and the NBA regular season (October to April) is more valuable.
ESPN also would pare down talent expenditure. They would shift from expensive TV-centered personalities making millions to less expensive versatile ones they could push out over TV, radio, podcasts, short videos, written content. People who can be available however the user wants to find them.
ESPN would ride the cable model as long as it lasts. It looks more like death by paper cuts rights now than a sudden mortal blow unless Google Fiber or something else undercuts cable providers supplying the Internet. Even if subscriber numbers trickle away, that’s still quite a lot of revenue.
ESPN would move to start its own subscription streaming service (why you invest in BAMtech). ESPN would also ensure that new streaming services, such as YouTubeTV, were paying full freight to carry ESPN.
Basically, ESPN, preparing for a future without cable, would do more or less what they have been doing. Building a time machine to go back and not sink quite as much money into a Sportscenter studio isn’t practical.
So, ESPN has a plan for the future. Whether that plan will work is another matter.
The network has a potential chicken/egg problem. Did ESPN emerge to meet the organic demands of the national sports fan? Or, did the national sports fan emerge because of ESPN’s constant access and promotion? Probably a bit of both. How many sports fans really care about a random NBA game between the Thunder and the Wizards unless ESPN is telling them to?
We could see sports fans revert back to just following their local teams. That scenario could give Fox Sports an edge with its regional networks and less overhead. There’s also the alarming possibility technology creates a sea change. Young people may abandon sports television entirely. If the latter is the case, there’s no real way to plan for it.