Bob Iger, Disney CEO, said that ESPN would go direct to consumer online eventually, but are there penalties for not being there now?
Speaking on CNBC’s Squawk Box, Mr. Iger said that ESPN was being watched by 83% of pay TV customers. However, he thought that the channel’s destiny was to go direct to consumer online, as HBO and CBS have already done. He didn’t think this would happen soon, which set me wondering if there was a risk by not being there.
The major sports leagues all have subscription products available online which allow users to watch live matches, match recaps, commentary and related subject matter. For the avid fan these sports online services could be a replacement for what ESPN provides.
Will still thinks that ESPN has exclusive content that can’t be found in these online subscription packages. He also makes the point that ESPN is very active online, though a would-be viewer will need a pay TV subscription to benefit.
ESPN has been the anchor sports network on cable for nearly 40 years. It has filled the valuable channel schedule with sports for which it paid well, helping raise the leagues revenues and expand the sport’s audience. However, online there is no schedule or bandwidth restrictions. The widespread availability of sports information online seems to be impacting ESPN’s business more directly. Will makes the point that viewership of SportsCenter on ESPN has declined because of the availability of sports data online.
Will went on to say that Verizon’s Custom TV, which does not include ESPN, is a popular option with new Verizon FiOS TV customers. Verizon is also using live NFL games as an incentive to get people signed up for the top tier mobile data plan: a subscriber can watch for free on this plan.
Chapter 1: Bob Iger’s comments (1:45)
Chapter 2: What the sports leagues are doing online (3:55)
Chapter 3: Exclusivity is still ESPN’s trump card (7:40)
Chapter 4: ESPN’s historical role is changing (12:45)
Chapter 5: The broader market implications (16:30)
Chapter 6: Operators pushing back on sports costs (17:20)
Chapter 7: Verizon uses NFL to attract wireless subscribers (18:10)
Chapter 8: CBS to include broadcast ads in live OTT streams (19:45)