The Broadcast/OTT Conundrum Solved

 Everything is going digital these days.  People are cutting the cord on their TV service and opting for Netflix/Hulu/SlingTV services, short video content and social media are ruling the day. With this sudden change in consumers consumption of media and entertainment, how come the industry itself is not moving faster to adapt, but instead holding firm to a losing medium?

It started with TV ratings ever so slightly trending downwards over the course of some time, but sports, specifically ESPN, were not affected as this was live TV, and consumers NEEDED to watch their sports live.  Well even now ESPN is hemorrhaging subscribers, 7 million over the past two years, and ratings overall on the network were down 10% in 2015 YOY.

What ESPN should be doing now is moving to an OTT platform.  They have struggled to capitalize fully on their ESPN3, Watch ESPN, ESPN app (whatever they’re calling it these days), however it has done well.  The one thing, is that it is not a completely proprietary and stand alone product, you have to be a current TV subscriber to use the service. ESPN still has one of the highest sub costs in the TV industry, well over $6. Would you not pay $6 monthly for a standalone service? I know I would, and ESPN sure as hell knows we will. Even so, they’re not going to charge $6, that’s to odd a number, it would easily be $10 a month, and I would still just throw the money at them.

If you look at this economically also, ESPN to charge $10 for say their main channel and ESPN 2, would still be making much more per subscriber than they currently make from cable service provider subs. And here is the catch, viewing on OTT services continues to increase! ESPN alone had these stats from the X-games two weeks ago…

TV & Attendance

  • 925,000 viewers of four live broadcasts (lowest since 2004)
  • 102,600 attendance (down 11% year-over-year)

OTT Viewing

  • 12 million total minutes viewed on the WatchESPN app (58% increase from 2015)
  • Competitions airing on ESPN had 69,000 average unique viewers on the WatchESPN app (115% increase from 2015)

The trend is clear, and ESPN can evolve their current revenue model while also making MORE money per subscriber, but they’re not. Instead they cut staff, eliminate divisions and projects (Grantland) and stick to their old world view. If you want to change ESPN, hit me up.

[UPDATE FEB 18, 2016 1PM EST] – ESPN In Talks To Join Digital Streaming Services, Doesn’t Plan On Standalone Offering (SBJ/SBD)