The future of ESPN may be in jeopardy.
Last year ESPN laid off about 300 employees and underwent cost-cutting programs as the company was struggling to make money. And this year isn’t starting off any better for the sports network, and it’s not just because of bad College Football and Monday Night Football ratings.
According to a recent survey by the BTIG Research company, 56 percent of people would remove ESPN and ESPN2 from their cable packages in order to save $8 per month, which is about the cost cable subscribers pay to receive the channels. Broken down by gender, 60% of women and nearly 50% of men said they would remove the sports network to save money.
In fact, regardless of age, people are not interested in ESPN and would rather save money than watch what ESPN has to say. “Even more interesting, results did not vary by age, with Millennials, Gen X’ers and Boomers all similar, adjusting for the survey’s margin of error,” BTIG Research’s Richard Greenfield wrote in a story about the survey results.
According to the Washington Post, a large percentage of ESPN earnings come from fees charged by cable subscribers, most of whom pay for the channel whether they watch it or not as part of a “bundle” package. But, that model has been threatened as more people are interested in streaming services like Netflix than cable packages. Combine that with the fact that airing live sports events is extremely expensive. For example, ESPN spent 1.4 billion dollars per year for over nine years to show professional basketball games.
To add insult to injury, seven million American households have dropped ESPN from their packages in the past two years, according to the Washington Post. That’s why ESPN is considering adding a subscription service to their consumers. However, as analysts pointed out, Disney would have to charge $20/month in order to make up the revenue from lost cable subscribers. And a study found only 6% of people said they would pay $20/month for ESPN and ESPN2.
Apparently, people are only interested into certain sports at certain times of the year.
Many consumers wouldn’t subscribe to such a package on an annual basis, instead turning it off or on depending on the time of year (NFL fans only subscribing during football season, for instance).
But, it is hard to deny the impact ESPN has in the sports industry. Nearly every sport imaginable is broadcasted on the network including bowling. So it’s no surprise that Disney executives are confident they are going to find a solution their sports network problem. “It’s still the dominant form of television viewing in the home. … [ESPN] is one of the strongest brands out there, and if you want to have one brand during a time of such change, I would argue it’s ESPN.”
