Bob Iger says the future of ESPN is to go direct to consumer, though that won’t happen anytime soon. The question is, will viewers need it by the time that happens?
In an interview on CNBC’s Squawk Box, Bob Iger was bullish on the future of ESPN, its flagship sports brand. Clearly the relationship with pay TV operators is critical to the company, and according to Mr. Iger that relationship is going very well:
It is not a niche brand. In the first calendar quarter of this year 83% of households that had multichannel TV tuned in to ESPN at one time or another.”
He was quick to point out that the future of ESPN is direct to consumer over the Internet, though he didn’t think it would happen anytime soon. Wisely, he refused to be specific about timing, though he does think there will be significant change within 5 years.
The timing of a big change like going direct could be critical if the actions of ESPN’s industry partners is anything to judge by.
All the major sports leagues in the US now have direct to consumer subscription services in market. Kagan says that the NHL, NFL, MLB, NBA and MLS all allow people to subscribe to a full season of games online. As well, a user can watch live games on their mobile device, as well as highlights and on-demand games. The biggest restriction to this is that most local games can’t be viewed through these apps. The rights to these games are normally sold to local broadcasters and the sports league are keen to protect those relationships.
The leagues are also creating original content around the sports akin to the shows found on ESPN. For example, NFL NOW created 100 hours of original programming for the last football season. Among the shows available were Finding Giants, a behind the scenes look at the Giants scouting process, and Undrafted, a show about players fresh out of college as they prepare for the NFL’s regional combines.
The leagues are also creating tiers of service that allow them to reach casual and serious fans. For example, NHL has a free version of GameCenter which has talk, live mobile radio commentary and highlights. There’s also GameCenter LIVE for $159 a season with live mobile video access to games.
The trend is clear: if you want to know what’s going on in your sport of interest online, use the league app or website and sign up for the level of service that fits you.
And the leagues are even kicking the tires on other outlets for the live games. The NFL signed an agreement with Yahoo to allow the site to live stream the game between the Jacksonville Jaguars and Buffalo Bills taking place in London during the 2015/16 season. While this isn’t exactly a high value game, it likely will attract a very big audience. The game will be live streamed free to anyone in the world accessing the site, and Yahoo reaches 1 billion worldwide users monthly.
Mr. Iger is confident that ESPN has a solid future online, but I’m not so sure. Just as pay TV customers are learning there is TV life outside of the big bundle, could it be that sports fans are learning there is a TV sports life outside of ESPN?
Why it matters
ESPN has provided an aggregation point for the sports world in pay TV for almost 36 years within the pay TV world.
Disney says ESPN OTT direct to consumer won’t happen anytime soon.
However, the major sports leagues already have a strong direct-to-consumer online presence with tiered subscription services.
It could be that the sports leagues won’t need ESPN online in the same way they needed it in cable.