Read on Twitter
Traditional sports media is dying.
If they don't act immediately, they'll fade into irrelevancy.
Time for a thread
If they don't act immediately, they'll fade into irrelevancy.
Time for a thread
1) With COVID-19 disrupting their core businesses, Disney reported their first quarterly loss since 2001 this week - almost $5 billion.
Despite the loss, their stock was still up more than 8% after hours.
Despite the loss, their stock was still up more than 8% after hours.
2) Why did Disney stock gain 8% after reporting a $5B loss?
The COVID-19 pandemic caused more consumers to stay home helping Disney+ cross the 60M subscriber threshold, a number that took eight years for Netflix to achieve ( @RT_Watson).
The COVID-19 pandemic caused more consumers to stay home helping Disney+ cross the 60M subscriber threshold, a number that took eight years for Netflix to achieve ( @RT_Watson).
3) ESPN, which saw their subscriber base decline 6%, wasn’t as fortunate ( @RichLightShed).
The “Cord Cutting” phenomenon, which has been going on for years, is clearly showing increased signs of acceleration and greater impact to the sports media sector. https://twitter.com/RichLightShed/status/1290970650518200320
The “Cord Cutting” phenomenon, which has been going on for years, is clearly showing increased signs of acceleration and greater impact to the sports media sector. https://twitter.com/RichLightShed/status/1290970650518200320
4) How bad has the purge of cable subscriptions gotten?
Over 60% of Americans age 18-34 don’t have a cable subscription, and maybe even more surprising, almost 40% of Americans over 55 have also cut the cable cord.
Over 60% of Americans age 18-34 don’t have a cable subscription, and maybe even more surprising, almost 40% of Americans over 55 have also cut the cable cord.
5) ESPN’s streaming option, ESPN+, is the networks intended answer to cable cutting.
The issue?
With ESPN losing over 15M cable subscribers in the last 7 years, they aren't gaining enough digital subscribers (+8.5M) to offset the loses being suffered on the cable side ( @SInow)
The issue?
With ESPN losing over 15M cable subscribers in the last 7 years, they aren't gaining enough digital subscribers (+8.5M) to offset the loses being suffered on the cable side ( @SInow)
6) Keep in mind, a cable sub is more valuable to ESPN than a digital sub.
ESPN makes +/- $9/mo on each cable sub, while only making a blended price of ~$4.50 on digital subs ( @SInow).
Digital advertising is also in its infancy, while cable has a mature distribution channel.
ESPN makes +/- $9/mo on each cable sub, while only making a blended price of ~$4.50 on digital subs ( @SInow).
Digital advertising is also in its infancy, while cable has a mature distribution channel.
7) Given most providers have specific stipulations not allowing live sports to be streamed without a cable package, ESPN is also unable to move their largest asset, live sports, to their streaming platform ESPN+ without a cable subscription.
8) Recognizing that cable is dying, ESPN is attempting to transform their business digitally.
The problem is that ESPN+ is not good enough.
Without live sports, you need to offer the consumer increased value.
Sure, they have exclusive content, but they’re thinking too small.
The problem is that ESPN+ is not good enough.
Without live sports, you need to offer the consumer increased value.
Sure, they have exclusive content, but they’re thinking too small.
9) Picture this - ESPN partners with 50-100 athletes to create their own podcast network housed behind a paywall.
- They do revenue sharing with the players
- ESPN handles back-end content distribution
- Athlete increases fan engagement & builds revenue stream for retirement
- They do revenue sharing with the players
- ESPN handles back-end content distribution
- Athlete increases fan engagement & builds revenue stream for retirement
10) Ultimately, ESPN just needs to think bigger.
Instead of building a “skinny cable bundle” by combining Disney+, Hulu and ESPN+ as a package deal, they need to drive unique value to customers without live sports.
This shouldn't be as hard as they’re making it seem.
Instead of building a “skinny cable bundle” by combining Disney+, Hulu and ESPN+ as a package deal, they need to drive unique value to customers without live sports.
This shouldn't be as hard as they’re making it seem.
11) These media companies need to act more aggressively and do it much faster.
The longevity of their business quite literally hangs in the balance.
The longevity of their business quite literally hangs in the balance.
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