- India-focused OTT production entity Golden Karavan launched
- Woman alleges gang rape by two men in SUV
- Film producer Karim Morani surrenders in rape case
- Ryan school murder case: CBI team reaches school, starts probe
- Karti closed many foreign accounts, shifted money: CBI
- Pakistan shells border posts, hamlets in J&K; BSF jawans among 7 injured
- Sushma Swaraj raises issue of terrorism, H1-B with US Secretary of State
ESPN’s 7 mn subscriber loss in 2 years is matter of concern for sportscasters in the US
MUMBAI: There is a lesson to be learnt by sports broadcasters across the world. With cord-cutting in the US growing and audiences migrating online to platforms like Netflix, leading sports broadcasters can suffer loss in subscriber numbers and this can have deep financial repercussions in the wake of high acquisition costs.
ESPN, the leader sports channel and biggest growth driver of Disney, has shocked the industry with its disclosure that it has lost three million subscribers in its recent fiscal year.
The sportscaster has, in fact, shed seven million subscribers in two years. It has 92 million subscribers, down from 95 million a year ago and from 99 million two years back. According to industry estimates, ESPN’s affiliate revenues is $650 million less than what it was making two years back.
ESPN at $6.10 per subscriber is the most costly pay TV channel. The problem is that ESPN coughs out an estimated amount of $6 billion a year towards rights fees. This means that it cannot afford to let its number of subscribers slide. This will hurt not only its affiliate revenues but also impact its advertising income.
SNL Kagan has provided interesting figures. These are, though, a year old.
- ESPN $6.61 x 94.5 million homes = $7.5 billion
- NFL Network $1.31 x 73.6 million homes = $1.16 billion
- FS1 .99 x 91.2 million homes = $1.08 billion
- ESPN2 .83 x 94.5 million homes = $941.2 million
- SEC Network .66 x 69.1 million homes = $547.3 million
- Golf Channel .35 x 79.4 million homes = $332.2 million
- NBC Sports Network .30 x 83.1 million homes = $299 million
- Big Ten Network .39 x 62 million homes = $290.2 million
- MLB Network .26 x 71.3 million homes = $222.5 million
- FS2 .28 x 64 million homes = $215 million
- NBA TV .29 x 57.2 million homes = $199 million
- ESPNU .22 x 74.9 million homes = $198 million
- CBS Sports Network .26 x 61 million homes = $190.3 million
- NHL Network .32 x 37.4 million homes = $143.6 million
- Pac 12 Network .39 x 12.3 million homes = $57.6 million
The alarm is that there are serious doubts whether that trend of subscriber decline can reverse. People in large numbers in the US are moving to a la carte choices, available through streaming services and smartphone apps, even as cable TV bills are rising. If subscriber numbers do not grow, the financial situation can worsen due to high sports-rights costs.
Cord-cutting in the US is impacting all broadcasters. In case of sportscasters, the impact will be more as acquiring live programming costs are high.
In markets like India, traditional television is growing. But what if the trend changes fast and online viewing grows rapidly?