Once Upon a ESPN
Sports are widely viewed on television networks, however, that might be changing as costs of production continue to rise. People now have more access to sports’ statistics and highlights online than they have ever had before. Facebook and Twitter allow everyday people to discuss sports without the need of star personalities, or a cable television subscription. Not only that, but many other sports networks such as the NFL and the NBA post a lot of their video content on their websites which can be viewed from any device. Sports channels on cable television networks are becoming obsolete.
People are turning to different types of television-like services that offer them access to whatever they want, when they want it. Some examples are Netflix, YouTube Red Originals and live streaming which is available on certain social media platforms. The only thing that is holding sports networks afloat is the fact that not many options are available for live streaming, but the reality is that most people really just want to see the exciting plays, like Curry’s impressive three-pointers. The LA Times reports that “[s]ports have become the glue holding the pay-TV bundle together. While Internet streaming options including Netflix, Hulu and Amazon.com offer thousands of hours of scripted shows, there is little in the way of live sports. So sports fans remain tethered to their cable bundle.” This is causing a massive change in the sports broadcasting and programming world, but not only that, it’s also changing the overall broadcasting landscape. Media giants have to face a change in their reality, which is that people no longer rely on television networks.
According to the Business Insider, “The news signals that the economics around live sports broadcasting is becoming unsustainable. Sports rights fees continue to climb despite slowdowns in viewership and pay-TV subscriptions, which points to a faltering business model for broadcasters who once relied on live sports to draw in TV audiences.” We see that with sports networks supply and demand, the traditional economic model no longer works. More specifically we see that with ESPN. ESPN’s costs are rising. ESPN’s supply is high while their demand is low. The Bloomberg reports “Disney led media stocks in a meltdown in 2015 after acknowledging that its flagship ESPN sports network was losing subscribers as viewers traded down to lower-priced TV options.” No one wants to pay for a more expensive network when they get the same exact content from somewhere else for a cheaper price.
ESPN’s parent company, Disney, is at odds because ESPN’s sales are falling. Analysts expected the company to reach $15.3 billion in profits, but instead, the company only reached $14.8 billion. The losses are a direct result of the company hosting fewer college games, as well as higher programming costs. Disney, according to Bloomberg stated that “higher programming costs at ESPN, [and] rising expenses for both NFL and NBA games [are to blame]. Profit at other cable channels, such as the flagship Disney Channel, was essentially flat.” The argument being made by Disney here is a bit vague. Essentially, Disney is saying that there should be no reason for programming costs to rise, especially if another channel within the same company is not having similar problems.
In order to balance the rising costs of production ESPN laid off hundreds of workers, but even that may not be enough to help the company. According to the New York Times, “The network has lost more than 10 million subscribers over the past several years.” ESPN needs to create a product that will draw in more subscribers, enough to replace the ones that they lost. Sydney Embers and Brooks Barnes, writers for the New York Times argue that ESPN is “betting on big personalities to restore its fortune.” However, it might be a little too late to bank on “big personalities” to save the channel. ESPN subscribers left because of the rising costs not because the entertainment value was low. Cost outweighs content for hundreds of people. People are not going to re-subscribe to something that is more expensive when they can get something that has almost the same value for a cheaper price.
However, ESPN is trying to adapt to the reality that more and more people are turning away from cable television. In response to that Disney has accelerated its efforts “to introduce an ESPN-branded subscription streaming service.” This too might be a little late, as people have become accustomed to using social media platforms for sports' highlights and conversations. Disney and ESPN would have to create not only a streaming platform but they would also need to create a social media platform within it to keep up with Facebook and Twitter.
The implications of a changing broadcasting system indicate that traditional sport television networks are no longer necessary, but rather a hindrance that keeps people tethered to cable networks that they would otherwise not have.
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