There’s a survey making the rounds that doesn’t contain a lot of happy news for Mickey’s Empire.
A survey of 1,582 consumers commissioned last week by BTIG Research found that 56 percent of respondents would remove ESPN and ESPN2 from their cable packages to save $8 per month, which is about the cost cable subscribers pay to receive the networks. Broken down by gender, 60 percent of female respondents and 49 percent of male respondents said they would remove the sports networks to save money.
“Even more interesting, results did not vary by age, with Millennials, Gen X’ers and Boomers all similar, adjusting for the survey’s margin of error,” BTIG Research’s Richard Greenfield wrote in a story about the survey results.
B-b-b-b-but I thought everybody loved sports!
Feed that information into ESPN’s existing trend lines…
Seven million U.S. households have dropped ESPN in the past two years, Disney said in a federal filing submitted in November. Its subscription base is down to 92 million homes, the lowest in nearly a decade, and the operating profit Disney expects to receive from ESPN — its most profitable cable channel — is expected to flatten this year, leading to a cost-cutting mandate from Disney.
… and it would appear that Disney is caught between a rock and a hard place with its business model.
To combat these losses, Disney chief executive Robert Iger has said ESPN is prepared to offer a direct-to-consumer subscription service, in which consumers would pay for ESPN programming by itself without subscribing to a cable package. However, this plan also presents a certain amount of risk. As The Post’s Drew Harwell noted last month, if 30 percent of ESPN’s current subscribers shifted to paying for the network via an online service, Disney would need to charge about $20 per month to make up for the revenue from lost cable subscribers.
BTIG Research also asked about this in its survey, and its results were similarly bleak for ESPN and Disney. The survey found that only 6 percent of respondents would subscribe to ESPN and ESPN2 at $20 per month, with 85 percent indicating they wouldn’t and 9 percent saying they weren’t sure.
“The reality is that ESPN would likely have to charge dramatically more than $20/month/sub in a direct-to-consumer model, given the dramatic reduction in penetration rates,” Greenfield writes, pointing out another strike against this plan: Many consumers wouldn’t subscribe to such a package on an annual basis, instead turning it off or on depending on the time of year (NFL fans only subscribing during football season, for instance).
Now, as the linked article goes on to note, talk is cheap and ESPN controls a ton of live sports programming, so if that’s what you want, you’re going to have to pay the piper, within reason, of course. And therein lies the rub: it’s an easy call when you’ve got the rest of the country subsidizing your sports hunger, but how much are you willing to pony up on your own?
And the obvious question to ask at that point is what happens to our buddies running college football – you know, the captains of industry running their own conference broadcast networks – get told that the next ESPN contract won’t be so lucrative? Here’s one thought:
The future impact of cord-cutting may be far more dramatic. Where does that leave college football? The sport’s present sugar daddy ESPN, at the very least, will be shelling out far less. The same cord-cutting that harms ESPN may kill off the viewer-less conference TV networks as constituted. College football may see a finite, diminished revenue pool, concurrent with increased business costs as it resolves its amateurism conundrum and perhaps deals with increased insurance premiums as medical research continues.
Projecting specifics is murky. But, the broad direction is clear. College Football will operate more like a business, optimizing itself to create revenue (rather than just distributing it). We can expect far greater centralization and collective action. Many of the sport’s lovable little inefficiencies may be cast aside.
Without cable, college football would be attracting viewers, not trying to collect what amounts to a college football tax over the largest population footprint. The focus would move toward producing the most quality games possible. That impetus could precipitate radical changes to scheduling and the way the sport is structured.
Eh, maybe. First off, there’s an implication there that the Scotts and Delanys running the show are capable of strategic thinking. If so, that’s something they haven’t demonstrated before, mainly because they’ve had the luxury of a broadcast market that’s been on steroids for the past decade.
But second, if there’s one way to make me skeptical about visions like this, it’s to say “perhaps with Notre Dame”. Notre Dame football doesn’t need a conference now. It has its own TV deal; more importantly, it has its own TV deal on NBC. It isn’t beholden to cable. If Notre Dame is good now, that’s certainly not going to change in an era of cord-cutting. In fact, it would be monumentally stupid to give up that advantage.
You know who else has that advantage? The SEC. Uncle Verne and Gary are free. But what happens when the current CBS deal expires and bold leadership dictates that all football product moves to the SEC Network? I guess we’d find out then how much Phyllis from Mulga would be willing to pay every month to listen to PAWWWLLL’s dulcet tones.
You don’t think the SEC would be dumb enough to make itself that vulnerable? Hey, this is the conference that expanded to fourteen schools to get out of a bad TV deal. It’s quite capable. After all, that’s what passes for strategic thinking.