ESPN Loses 2 Million Subscribers in Last 12 Months
The “Worldwide Leader in Sports” continues to find itself in bad shape as the acceleration of “cord-cutting” among cable television consumers costs ESPN more and more subscribers.
Indeed, this is less about cutting a cord and more about ESPN standing in an elevator at the top floor and someone cutting the cable holding up the car.
ESPN has 86 million subscribers, according to Disney’s 2018 annual report.
That might sound like a pretty massive audience. Trouble is, the network had 88 million last year, Variety reported.
Every time a cable consumer cuts a cord, someone at Disney starts looking over his shoulder wondering when the next round of layoffs is coming.
Speaking of the Mouse, ESPN isn’t the only Disney property feeling the crunch.
The Disney Channel is down from 92 million to 89 million. Freeform is down 2 million to 90 million. Disney Junior and Disney XD both lost 3 million subscribers, their current subscriber bases sitting at 69 million and 71 million.
Disney got a lot of help from the Trump administration, reaping a $1.7 billion tax windfall from the budget package passed at the end of 2017.
But in a two-steps-forward, three-steps-back world, the company just took on $20 billion in debt in order to acquire Fox Sports, and the interest alone on its $40 billion in total debt is greater than the tax savings — $2 billion against $1.7 million.
It’s not all bad news for Disney, though.
For one thing, Nielsen Media Research, which maintains the subscriber counts, doesn’t count online streaming services; plenty of cord-cutters still use services like Sling TV to watch live sports without a physical television.
On top of that, Disney pointed out that it has over 1 million subscribers for the new ESPN Plus streaming service, which essentially allows cord-cutters to keep their sports fix without bundling it in with a larger online-TV package like Sling.
And in what may be a bit of a “we’re still dying but we’re dying slower” spin, Disney executives were quick to point out that the rate of subscriber decline has been slowing lately.
From 2016 to 2017, Disney properties lost 3 percent of their subscribers. This year, they lost 2 percent.
But when you’re bleeding out after turning into the sports business equivalent of the Black Knight from “Monty Python and the Holy Grail,” there’s a certain amount of “it’s just a flesh wound” in pointing out they’re spraying blood slower.
As time marches on, and as younger consumers continue to turn away from traditional cable services, companies are going to have to find new ways to deliver content to that audience.
Furthermore, the companies like Nielsen that tally the ratings need to measure all these new forms of media lest the whole thing turn into a political poll where they only call landlines and wonder why the poll is off by 10 points when people actually vote. It’s a problem of failed method.
But at the same time, maybe Disney shouldn’t be racking up debt like a first wife with her ex-husband’s credit card if it’s going to come out of this in one piece.
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