ESPN’s model is eroding. Past and present execs are split on how it can protect...

[TMC]

...its dominance

https://www.cnbc.com/2024/03/21/espn...cumentary.html

PUBLISHED THU, MAR 21 20246:00 AM EDT

Alex Sherman

CNBC spoke with ESPN Chairman Jimmy Pitaro and head of programming Roz Durant as part of a documentary on the Disney-owned network’s future as cable TV declines.

Former Disney CEO Bob Chapek spoke with CNBC about ESPN’s challenges in his first public interview since his 2022 firing.

ESPN has multiple streaming strategies to maintain its dominance and relevance as tens of millions of Americans cancel cable TV.

For more than 40 years, the world’s largest all-sports network has grown annual revenue by increasing cable subscription fees. ESPN first charged pay-TV distributors less than $1 per month per subscriber in the 1980s. In 2023, ESPN’s monthly carriage fee was $9.42 per subscriber, according to data from S&P Global Market Intelligence.

That business model is eroding. Since 2013, tens of millions of Americans have canceled their cable TV subscriptions, raising questions about ESPN’s future in an increasingly fragmented media landscape. CNBC spoke with multiple current and former Disney and ESPN executives about the network’s path ahead as part of the digital documentary “ESPN’s Fight for Dominance.”

ESPN reported domestic and international revenue grew just 1% to $4.4 billion in its most recent fiscal quarter. The network can no longer rely on price increases to make up the difference as the number of cable customers declines.

The company has a new two-part streaming plan to reinvigorate growth. First, this fall, Disney will make ESPN available outside the traditional cable TV bundle for the first time as part of a joint venture with Warner Bros.

The service, which does not yet have a price, will target noncable customers who want to watch sports but don’t want to pay $80 or $100 a month for a full bundle of networks.

Second, in fall 2025 ESPN will launch its flagship streaming service that will include everything ESPN has to offer, both live and on demand. It will include unprecedented personalization and will interact with ESPN Bet, the company’s licensed online sportsbook, and fantasy sports to cater to younger fans. The product will go well beyond ESPN+, which exists as a $10.99 streaming service that doesn’t include ESPN’s most expensive programming, such as all of “Monday Night Football.”

“The industry is in a transition phase right now,” ESPN Chairman Jimmy Pitaro said in an interview as part of CNBC’s documentary.

“We’re seeing declines in the traditional ecosystem, cable and satellite universe,” Pitaro said. “There’s a transition to digital. That is by far the biggest component of our future.”

Pitaro and head of programming Roz Durant defended ESPN’s growth plan to CNBC, while former Disney and ESPN executives Bob Chapek, John Skipper and Mark Shapiro noted the so-called Worldwide Leader in Sports faces multiple potential obstacles while it charts its path forward.

[TMC]

For more than 40 years, ESPN has reigned supreme as the king of sports media. Growing its business by consistently raising the price of its fee to cable TV providers, ESPN now generates more than $16 billion in annual revenue. But the business of media is changing rapidly. In the past decade, about 40 million U.S. households have cut the cord on traditional cable TV. ESPN must adjust to find customers that aren’t subscribing to the cable bundle as new competitors including YouTube TV, Apple, Amazon, Peacock and perhaps Netflix bid on packages of live sports. This CNBC documentary examines ESPN’s strategy to fend off larger streamers and questions its sustainability in a digital-first world.

Chapters:

• 00:00 – 02:25 Intro
• 02:26 – 08:59 ESPN’s streaming plan
• 09:00 – 16:14 Rising cost of sports
• 16:15 – 20:07 Mounting competition
• 20:08 – 24:20 ESPN’s future

[Yong Fang]

I saw a video or a news report that everyone who buys cable pays for ESPN, whether they want it or not. Which is another good reason to quit cable. People should be able to buy whatever channels they want alacarte. I know with ATT they do have some channels one has to pay for to access. Way it should be, and this is what it’s turning into because of the “streaming” services.

Sports media is about as fake as the regular news. Extremely biased and pushes anti majority biases.

[Caroline13]

cheaters can't go on forever, they've had a good long run....

[TMC]

Bob Iger on ESPN’s future streaming services: ‘We’re trying to serve sports fans in multiple ways’

"What we're trying to do is serve sports fans in multiple ways."