Bullet Points of Doom for ESPN
500ish.com
500ish.com
Of course this is also the doldrum period of the sports year, with football long over, and basketball and hockey in their offseasons also. Baseball just doesn't do it, and ESPN has to fill up the air-time covering tennis and golf in excruciating detail.
I will gladly pay a premium for someone to present me good content in an easily consumable manner, but I don't want filler stuff like talk shows etc about the content - that isn't where the value add is. The value add is in creating a package of actual content that I want and presenting it to me in a way that doesn't require a lot of work or nickel and diming of me?
I watch a bunch of magic the gathering on twitch, and there are two competing "brands"for casted live tournaments - WotC themselves, and starcitygames. WotC thinks they should be ESPN with a lot of talk in between, SCG thinks they should be just content, with a few really talented commentators mostly doing colour and play by play. SCG gets much higher viewership and better feedback despite running an objectively lower level tournament series, from having more content and more in tune with audience commentating talent.
I think that is a microcosm of where we will be going. Content and a small pocket of talent rather than huge productions that tries to cover gaps in content.
You don't even need ESPN for these, they show up on Netflix pretty quickly after they've aired on ESPN.
When there's a non-DirecTV option, thats when I will vote with my wallet.
However, MLB has shown it can be done right now, and done very successfully. MLB league revenue is about $9 billion vs $11 billion for the NFL, so the businesses are comparable. Yet MLB has built a juggernaut in the MLBAM subsidiary, with perhaps a billion in revenue for 2015 and ~$300+ million in operating income.
To put that in perspective, Netflix had operating income of $400 million for 2014.
The NFL is making a huge mistake in not building out a comparable platform to MLBAM. They're going to be running from behind as cable goes down.
Since, as you rightly point out, they're the vanguard here, when MLB figures out (contractually, presumably, not technologically) how to get local games streamed, that will be a watershed moment.
http://www.verizonwireless.com/mobile-living/sports-and-well...
If you visit that site from anywhere else in the world, this is what you see: http://i.imgur.com/2UcLGJi.png
The online app itself is amazing. You have access to stream any game live on game days, and any previous game (including playoffs and super bowls) going back like 4 years. It also includes the Scott Hanson version of NFL Redzone (not the bootleg DirecTV version). No commercials. No blackouts. Multiple stream quality controls. Options for home/away team radio broadcasts. In-app "quad-box" split-screen. It's the best football-viewing experience possible.
I bought the special anniversary of Madden a year or two ago that included access to DirecTV's streaming service; it's garbage. I sold my access on eBay as soon as possible. The NFL Gamepass service may try to shoo away US-based visitors, but they'll happily accept a US-based address and credit card. Fire up a cheap VPN (only necessary for initial login) and you're set.
What's insane is that a few years ago, they offered Gamepass for FREE in certain countries. So with the right VPN location you didn't even have to pay for it. They stopped that though, and I'll happily pay them money for it, even if I have to trick them into allowing me.
It's ~$200 USD per season, but Sunday Ticket is $350 and even a modest cable subscription pushes $50/mo, so it seems fair to me. They actually have a "follow your team" option, but it's only ~$30 less and only covers the pre/regular season.
I really can't endorse the service enough. It's a cord-cutters dream, and one of the few online streaming services where non-Americans are much better off.
If I were ESPN, I'd ride it out. Sure you may lose compare to the old TV hegemony you had, but you'd never make it up from the streaming side while leagues have their own services.
I think creating a good solid product wins. Something like www.ballstreams.com is much better than NBA League Pass. HBO Go is a better experience than your cable + HBO Subscription.
Good products and services win out in the long run. That's why this is even a debate - services like Netflix are destroying the cable companies. It's only a matter of time.
If ESPN built their own platform that was simple to use, worked wherever you were (without a cable subscription), and maybe most importantly did not have blackouts, I think they would make a killing.
I watch EPL Football and American College Football (along with the World Cup / Euros every other 2 years).
With over the air ABC moved more and more games to ESPN, which is now coming back to bite them. Canceled cable in 2006 after the World Cup, tried a few online services but they were all terrible. I think 40/mo should more than cover my viewing. Funny thing is, I get it all for free now. Yet I'd prefer to pay.
$30/mo is $360/yr. Could I even take my wife to a game at Levi's stadium for that price, once you factor in transportation and parking?
Almost everyone I know who watches football more than casually would pay for an all-access streaming service.
I like to watch auto racing, but there's no legal way to watch live without a cable sub and an extra package or two on top of that. Usually I pirate races after the fact or watch a handful of smaller series that upload to YouTube after the race. But watching live really has its own unique quality, and I would happily pay a few bucks for the privilege.
I heard this from somebody a couple years ago, so I can't take credit for the thought. In a broadcast medium, like TV, they don't actually know how many people are watching. It's kind of a guess built up from survey companies like Nielsen, but it's ultimately a fiction and can be gamed in certain ways. For example, "90% of cable subscribers subscribe to cable for the sports channels" and "there are 100million cable subscribers, so therefore the market for sports channels is 90 million households" and "the average household is 3 people" therefore "advertising reach is potentially 270 million pairs of eyes".
They can use these numbers to sell advertising at inflated prices, which makes the channel more money, etc.
But on the internet, things become less "fiction" because they can be backed by much more concrete numbers like unique visitors to a site, or number of accounts who watched some particular live-stream, etc. And suddenly 270 million pairs of eyes turns to 11,000 people tuned into the live-stream and now ESPN or whoever can't really charge $50k for a 30 second placement anymore...after all no more than 33,000 people might see it, and even if access to the stream is $10/mo, the revenue from a single game's TV advertisements will overwhelm the monthly fees from all of the subscribers.
The internet simply eliminates the advertising fiction the TV world operates in, and the better data quality it provides simply shows that it doesn't allow them to charge the same kind of revenue generating advertising that they used to. On top of that, there's more actors in the distribution channel that they have to revenue share with, making the number even smaller.
TV broadcasters are terrified of streaming TV even though they know it's the future. The gold mines of broadcast TV are too hard to move away from even if it's rapidly going away as a medium.
That ESPN surcharge was the actual last straw that pushed me over to the cord-cutting side...and you know what, I don't miss ESPN at all. If ESPN goes away (I know, I know unlikely), or at least diminishes its control over other media providers, etc. then I call this market forces merely bringing their invisible hands to balance the market/industry/economy; and I don't see a problem with that.
I barely watch it now. The only reason I have it is its included in the DirecTV package we get.
Since they moved MLS and the Premiership to ABC and its affiliates, and Hockey is no longer on ESPN either, I hardly watch it anymore. I used to be a huge Sportscenter fan, which used to be 30 min and really informative. Now it runs more than an hour and completely disorganized, and barely watchable.
I agree - good riddance.
> The financial stakes are especially high for ESPN because it earns the most carriage fees of any TV channel, about $6.61 a month per subscriber
I have no interest in televised sports. But if I had a cable package I'd be paying ESPN almost $80 a year? Whether I watch sports or not?
Now I'm glad I don't have cable TV, just a cable modem. I'll take the $80 over those sports broadcasts I don't care about, thank you.
That's not why the financial stakes are high. They're high because ESPN has fixed price contracts into the future for the rights to broadcast sports events. If their subscriber base falls, they're still on the hook for those contracts.
The article "Is ESPN A Giant Bubble About To Burst?" [1] does a much better job of explaining the whole picture. It also gives a reasonable argument as to why subsidizing channels we don't watch benefits TV viewers as a whole. (I'm thinking about becoming a cord cutter myself, but the argument is still reasonable.)
[1] http://www.foxsports.com/college-football/outkick-the-covera...
If ESPN continues to lose viewers, their ad revenue will suffer. If ESPN revenue suffers, will they be able to pay the fixed price contracts they have with the largest, most viewed sports leagues, such as the NFL, MLB, and SEC (college football)?
Seems to me that this is the first domino to fall...
Hypothetically, ESPN itself doesn't need to lose many viewers for this to happen. The ad revenues mostly just cover production costs. The bulk of their revenues come from the cable companies via cable subscriptions. Virtually all cable bundles include ESPN, so if cable subscriptions fell among non-ESPN watchers, it would still impact ESPN's bottom line.
This is something a lot of people don't really think about.
For example, Breaking Bad, while a critical success, was never a popular show until its final episodes. It and Mad Men mostly existed as a way to keep their parent network, AMC, in a more popular cable tier, so that it could continue taking in carriage fees.
Most importantly, it incentivizes people to make channels with cheap but low quality content just to suckle on the teat of the cable bill.
If there were true alacarte pricing options for cable channels, the channel would actually have to put an effort in for my dollar. Many channels would wither and die, but that's because they are offering an unappealing product.
It would also give consumers a way to actually push back when a channel goes against its core subscriber base just because they found some cheap content that can fill the airwaves. I mean just look at the current state of the History Channel or Discovery or even Animal Planet. Maybe it is time for them to die off and make room for a younger competitor not so in love with reality programming.
Still I find it ironic how many complain about the six dollar figure assigned to ESPN when many premium channels; hbo/showtime/etc are ten to fifteen dollars a month. I know quite a few who spent that for HBONow just for one show only to cancel as soon as the season for GOT was over. While I have no interest in sports its a matter of perception.
Now ESPN and others have sued cable operators who have tried to slice up offerings to where customers could elect to not have specific channels. So while not defending cable and satellite companies it does come to the point where its cheaper to eat the bad customer feelings than spend the money on court cases. That being said, you would think with the drop in subscribers that the financials of that decision are turning around sufficiently that maybe they will push back harder
Their price is ok (20 euro a month or so) but their app is completely broken. On iPad it kicks me out every few mins claiming I logged in somewhere else (I didn't). They had major issues with the streaming. The app is not searchable in a meaningful way.
Last two years I have paid them for the first month but have ended up using pirated streams/YouTube instead to even get to watch the games and then cancelling in frustration.
Before they are ready to move to an online first model they have a bunch of work to do. It is clear it is not a focus at the moment at least.
NFL Gamepass is MUCH better, although the web version is still Flash.
ESPN will lose the major sports to their own channels in the coming years. If ESPN is going to survive they need to become the "every other sport" network and learn to respect and promote the sports that won't defect to their own streaming services.
The 24 hour sports channel model just can't work in an age of on demand content. I want the event--not the pointless filler / tabloid drama. Ideally, all of these organizations would own their own streaming, and you could purchase various 'packages'...if there was a Netflix for sports, I would subscribe ASAP.
This year The International, the annual Dota 2 "tournament of tournaments", will have a prize pool surpassing 15 million dollars. Last year's tournament reached 20 million unique viewers and peaked at 2 million concurrent.