Dive Brief:
- New Nielsen numbers show that ESPN lost 555,000 subscribers in November, as reported by Outkick the Coverage.
- October was ESPN’s worst-ever month in terms of lost subscribers with 621,000 departing, per Nielsen. The past two months have then seen a total of 1.176 million subscribers drop the network. ESPN, which is owned by Disney, contested Nielsen's October numbers, but Nielsen recently affirmed the data and findings were accurate.
- Outkick the Coverage described ESPN's rapid decline as the “biggest story in sports.” The channel has previously been seen as a cable powerhouse in terms of sports news and coverage, and it retains around 88.4 million cable and satellite subscribers, far lower than the 100 million-plus it had just a few years ago.
Dive Insight:
A once-stable market leader like ESPN losing so many subscribers in such little time is potentially indicative of a large speed-up in the already strong trend toward cord-cutting. Most major cable networks took a hit to their ratings this year, and destination viewing staples like NFL football games — which ESPN covers heavily — have also been hurt by lower viewer turnouts than usual.
As non-traditional platforms like Twitter, YouTube, Facebook and others further build out their live streaming video offerings and major media deals, the trend away from set-top boxes is unlikely to slow, which could further hurt advertisers and sponsors on linear TV. Younger demographic groups have shown signs of preferring digital channels like live streaming, but some older viewers are also turning away from things like NFL broadcasts, according to surveys reported on in The Wall Street Journal.
In ESPN’s case, the loss is a problem that extends beyond view counts: The network has huge deals in place with most notable professional sports leagues like the NFL and the NBA to the tune of $7.3 billion in fees for 2017 for the right to air content. Per Outkick, that number is more than any other source currently has booked for content, including Netflix, Amazon, NBC and CBS. Those long-standing contracts were inked before viewers' attention began migrating to other outlets like live streaming, and ESPN may find itself in a bit of pickle as subscription revenue declines, potentially collapsing the network's margins overall.
