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November 30, 2016

ESPN's Subscriber Numbers Plummet for Second Straight Month

They lost 550,000 subscribers in November, which follows October's losses of 629,000 subscribers. These numbers are per Nielsen. Though ESPN challenged Nielsen's numbers last month, Nielsen reviewed them but still found big losses for ESPN's subscriber numbers.

[T]he worst month in the history of ESPN has now been followed up by the second worst month in ESPN history. ESPN has now lost a jawdropping 1.176 million subscribers in the past two months.

Putting that into perspective, that means nearly 20,000 people a day are leaving ESPN for each of the past two months.

If that annual average subscriber loss continued, ESPN would lose over seven million subscribers in the next 12 months. And at an absolute minimum, these 1.176 million lost subscribers in the past two months will lead to a yearly loss in revenue of over $100 million.

According to Nielsen ESPN now has 88.4 million cable and satellite subscribers, a precipitous decline from well over 100 million subscribers just a few years ago

...

The rapid decline -- and apparent escalation -- in cable and satellite customers abandoning the bundle is the biggest story in sports, and there isn't a close second. That's why I've been writing about it for the past several years.

He goes on to analyze ESPN's business model. ESPN is set to pay $7.3 billion in broadcast rights to various sports organizations this year. This is all contractual; they can't get out of it. ESPN can afford to pay that amount only because they have huge subscriber base and they charge every single cable subscriber in America $7 per month (which, of course, you can almost never get out of paying).

The broadcast rights are ESPN's selling point, but also a huge cost. If ESPN makes less money, they're still on the hook for that massive rights cost. ESPN is still making a lot of money (just less of a lot of money), and will make money for the next five years, but if people keep cord-cutting and abandoning ESPN, at some point, ESPN just won't be able to pay such huge amounts for broadcast rights, which then undermines their whole raison d'etre: Who wants to watch a "sports channel" that doesn't broadcast big sports?

ESPN used to be like that, 30 years ago, featuring a lot of pro bowler league and other cheap-to-buy broadcast rights. In fact, it used to look a lot like "The Ocho." (If it's almost a sport, we've got it here). I can't see them going backwards back to that. Not while extorting $7 per month from every cable subscriber in America.

T. Becket Adams links this piece and discusses the Social Justice Warriorification of the onetime sports network.


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posted by Ace at 11:02 AM

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