ESPN has investors really worried

[landtuna]

The Mouse's stock took a beating recently due to subscription losses by their traditional money-maker.

http://www.usatoday.com/story/tech/2015/11/27/disney-stock-slammed-espn-loses-subscribers/76446886/

 

[purpledevil]

You must've taken Misleading Headers 101 in school. Hardly the news this topic title suggests.

C'mon tuna...Mickey is far, far away from any fear of demise. I do love the "plummeted to 92 million" line, though.

 

[landtuna]

You must've taken Misleading Headers 101 in school. Hardly the news this topic title suggests.

C'mon tuna...Mickey is far, far away from any fear of demise. I do love the "plummeted to 92 million" line, though.

I'm not a holder of the Mouse' stock but the theme of this story seems to be that a traditional, and significant, revenue source for Disney is now falling due to cord-cutting. By itself perhaps not a big story but combined with all the other cable cord cutters?

A business that is not growing is dying.

ESPN has either overpriced itself or it isn't offering what the customer wants. And, the headline mentioned ESPN, not Disney.

 

[nathannah]

I'm not a holder of the Mouse' stock but the theme of this story seems to be that a traditional, and significant, revenue source for Disney is now falling due to cord-cutting. By itself perhaps not a big story but combined with all the other cable cord cutters?

A business that is not growing is dying.

ESPN has either overpriced itself or it isn't offering what the customer wants. And, the headline mentioned ESPN, not Disney.

The difference here though is ESPN has more than enough time to turn around and has already been pro-active with staffing cuts and program reductions. In the case of Viacom they had more than enough time to plan for a turnaround, but they still think it's 1997 and viewers want endless SpongeBob reruns and multiple MTV channels that go mostly unwatched, and now we go into 2016 worried about them majorly post-Redstone. Plus end of the year; many factors besides the ESPN ratings news play into things, including profit-taking. Most networks would never admit a subscriber decline, and Disney knows what they're doing.

 

[landtuna]

The difference here though is ESPN has more than enough time to turn around and has already been pro-active with staffing cuts and program reductions.

What business did you ever hear about that managed to continue for long by reducing staff and service reductions? Granted, it takes certain companies longer to die than others (Sears, K-Mart) but a business that isn't growing is dying. The only unknown may be how much time is left. Once more ESPN subscribers figure out they don't watch it and don't want to pay for it the fat will be in the fire but by then it will be too late and the once industry sports leader will become a 2nd tier sports peddler.

Most networks would never admit a subscriber decline, and Disney knows what they're doing.

I don't know whether Disney knows ESPN's business or not. Disney has made a great living by pushing out kiddie fodder but paying huge bucks for mediocre sports isn't the wave of the future. The revelation was disclosed on an SEC filing and I am positive if it wasn't a required disclosure then Disney wouldn't have made it because it is one more event in a long list of troubling indicators in the cable biz.

In the past several years about the only continuing big sports draw has been the NFL and for ESPN the year end NCAA football bowls. They have paid a fortune for what little they show. And sports in general are declining in viewership. Not a good omen for a company also losing paying customers.

 

[TVCOOL]

Time to trim all those unnecessary bonus channels (I.e ESPN 2, ESPN Classics, Teen Disney, Disney XD, MTV 2, NICK jr, MTV 3, etc).

 

[TheBigA]

And sports in general are declining in viewership.

That's not true. Spots is increasing in viewership, and it's why you see much more sports on broadcast TV. It's Saturday and scan the OTA channels. What do you see? Non-stop college football. What's hurting ESPN is they're being battered by other competing sports channels that didn't exist a few years ago.

 

[KeithE4]

That's not true. Spots is increasing in viewership, and it's why you see much more sports on broadcast TV. It's Saturday and scan the OTA channels. What do you see? Non-stop college football. What's hurting ESPN is they're being battered by other competing sports channels that didn't exist a few years ago.

Scan them in a couple of weeks and say that again. The college football regular season ends next week (other than Army/Navy), and most schools finish up today. With only a very few exceptions, the bowls air on ESPN channels. Outside of the NFL, college basketball on CBS, and the occasional NHL game on NBC, major sports will disappear from OTA television in the next week. ABC doesn't start its NBA coverage until Christmas. NASCAR is done for the year. What's left? Golf? Tennis? Fishing?

My guess is that those who are not big sports fans are the ones that are cutting the cord. And even some sports fans can get by with the online MLB, NBA, and NHL packages. Beyond that, there's tons of free radio feeds via TuneIn, and MLB Gameday Audio is $20. You're kinda SOL with the NFL either way, though, outside of what you get on your local affiliates. I did this for several years, but I missed 90% of college basketball and about 2/3 of college football. No good for me, so I got DirecTV. No more cord-cutting for me, at least not for the foreseeable future.

 

[TheBigA]

My guess is that those who are not big sports fans are the ones that are cutting the cord.

Nope...if you do a search, the exact same thing happened to Viacom earlier this year. What does Viacom own? MTV and Nickelodeon.

People simply don't want to pay for stuff. ANY stuff.

 

[KeithE4]

Nope...if you do a search, the exact same thing happened to Viacom earlier this year. What does Viacom own? MTV and Nickelodeon.

People simply don't want to pay for stuff. ANY stuff.

Maybe people don't want to pay for lousy programming but will pay for good programming. How many of those who cut the cord to ditch Viacom, or some other cable network provider they don't like, pay for Netflix or one of the other online services?

 

[TheBigA]

Maybe people don't want to pay for lousy programming but will pay for good programming.

I'm simply responding to your comment that they don't care about sports, and the previous post that sports viewership is in decline.

 

[landtuna]

That's not true. Spots is increasing in viewership, and it's why you see much more sports on broadcast TV. It's Saturday and scan the OTA channels. What do you see? Non-stop college football. What's hurting ESPN is they're being battered by other competing sports channels that didn't exist a few years ago.

I was reading the other day only two networks are seeing increased audiences - SEC on CBS and Notre Dame on NBC. Most of the major conferences have their own outlets which bypass ESPN.

 

[landtuna]

Maybe people don't want to pay for lousy programming but will pay for good programming. How many of those who cut the cord to ditch Viacom, or some other cable network provider they don't like, pay for Netflix or one of the other online services?

That is an excellent point. Netflix, Hulu, Vudu and the other dozens of online program providers are generally a lot less money than a cable package. Cable could go to a sports-specific ala carte setup but they have historically been too greedy to do that so people opt for NHL Center Ice and other packages which can be purchased ala carte. The writing has been on the wall for a long time. It just took some years for the monthly pricing to drive the fence-sitters away. And now it is taking some of the more sports passionate with them.

I will say it again.....provide a quality program either without commercials and bill be appropriately or with commercials but not plus subscription and I might come back. Do neither and I will get my programming via other means - which the industry does not get to participate in.

This even applies to non-sports programming. It is actually cheaper for me to buy DVD's of series I really want to see rather than subscribe monthly to the premium channels plus all the other crap that cable piles on.

 

[KeithE4]

I'm simply responding to your comment that they don't care about sports, and the previous post that sports viewership is in decline.

You also said that people don't want to pay for any stuff. Given how well Netflix, Hulu, and the like are doing, I think that's wrong at least to a point. But there's more than enough free programming to keep the true cheapskates happy.

And I know sports isn't in decline (and I know I'm not the one that said that), but my point is that in order to get most sports, paying for cable or satellite is all but mandatory outside of football season. The pro leagues' online packages don't cover their postseasons; only a few playoff games are shown OTA, with the World Series and NBA Finals being the main ones. The bowls are almost exclusively on ESPN. Most of the NCAAA Men's Basketball Tournament is on the Turner channels now. The women's tourney is on ESPN. You want to watch your local MLB team? Get cable or satellite since MLB.TV/Extra Innings blacks out the locals. I understand Fox Sports Net plans lift the blackout of their teams next season... but only if you subscribe to cable/satellite.

 

[TheBigA]

You also said that people don't want to pay for any stuff. Given how well Netflix, Hulu, and the like are doing, I think that's wrong at least to a point.

You're comparing two different things. Netflix and Hulu are the modern version of Blockbuster. At one time Blockbuster was doing great. And truthfully, people aren't watching "better" programming on Hulu or Netflix. In most cases, it's the SAME programming, just using a different platform.

 

[nomadcowatbk]

when does ESPN offer a standalone service?

 

[PTBoardOp94]

Nope...if you do a search, the exact same thing happened to Viacom earlier this year. What does Viacom own? MTV and Nickelodeon.

People simply don't want to pay for stuff. ANY stuff.

I don't think I follow your point.

Because of bundling, consumers don't get to pick whether they get rid of ESPN or Viacom, and so theoretically the same subscriber declines should be happening to all the "extended basic" nets.

Viacom is struggling further because of a big drop in ratings (and therefore advertising revenue).

 

[KeithE4]

when does ESPN offer a standalone service?

Most likely never, unless rights fees come crashing down to 1970 levels. They have to pay $Billions per year in rights fees to the leagues/conferences to get the games, and without games, ESPN has no reason to exist. Same goes for the CBS, NBC, and Fox sports channels. They'd have to charge $50 a month or more if they went online-only, since roughly 20% of the public watches them regularly, and then it depends on the game. But in any case, those rights fees have to come from somewhere, and that somewhere is us.

 

[TheBigA]

Because of bundling, consumers don't get to pick whether they get rid of ESPN or Viacom, and so theoretically the same subscriber declines should be happening to all the "extended basic" nets.

Did you read the USA Today article in the OP? It also refers to ratings declines for SportsCenter. The sub decline is about 2%. The article doesn't compare ESPN to other cable services, so what you're saying is quite possible.

 

[KeithE4]

That's not true. Spots is increasing in viewership, and it's why you see much more sports on broadcast TV. It's Saturday and scan the OTA channels. What do you see? Non-stop college football. What's hurting ESPN is they're being battered by other competing sports channels that didn't exist a few years ago.

There are 7 college football games on OTA TV today, nationally or regionally, out of 32 being televised: Ohio State-Michigan, UCLA-USC or UNC-NCState (regional), and Oklahoma-OKState on ABC, Alabama-Auburn on CBS, Notre Dame-Stanford on Fox, and Duke-Wake Forest on ACC Network (in some parts of the country, usually on a .2 or .3 subchannel in SD). Twelve of them are on ESPN channels, not including ABC. This is typical of college football season.

I can watch 5 of them via regular channels (no ACC Network affiliate in Phoenix, and UNC-NCState will be on ESPN2). The rest I can only watch on satellite or are not available at all.