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ESPN Is Crashing And Burning
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<blockquote data-quote="RonJohn" data-source="post: 430861" data-attributes="member: 2426"><p>The big problems for ESPN are:</p><p></p><ul> <li data-xf-list-type="ul">The majority of their revenue(It used to be more than 80%) comes from cable subscription fees which are declinng.</li> <li data-xf-list-type="ul">They have too many financial obligations for carriage rights. They pay much more for carriage rights than the programming is actually worth.</li> <li data-xf-list-type="ul">They have too many channels to show sports programming. ESPN, 2, U, Classic, SEC, Longhorn, soon to be ACC .... When it was just ESPN, the would occasionally have Sports Center. They had re-runs, Aussie Football, rugby, strongest man competitions, lumberjack competitions, etc.. to fill in time when major sports weren't available.</li> <li data-xf-list-type="ul">They are a niche network. Pretty typical to niche networks they are trying to expand their base. In doing so, the get rid of off-center sports programming such as strongest man and try to put in social type programming to reach a larger audience. Similar to TechTV/G4, they are expanding the program offering, but alienating the base fans more than attracting new ones.</li> </ul><p>The very big problem is that ESPN grew by using a revenue base that was hidden and not directly related to the perceived value of their product.(Subscriber fees) Their entire business model was based on the cable/satellite TV subscriber base continuing to grow. Cable/satellite subscriptions have decreased. On top of that I have seen estimates as high as 60% for people who do have cable/sat subscriptions who don't watch ESPN channels at all and would gladly drop those channels for a $10-15 a month reduction in their monthly bill. 60% of 80% means that 48% of their revenue comes from people who don't watch and don't want to pay for it. I don't think any company can survive that long term.</p></blockquote><p></p>
[QUOTE="RonJohn, post: 430861, member: 2426"] The big problems for ESPN are: [LIST] [*]The majority of their revenue(It used to be more than 80%) comes from cable subscription fees which are declinng. [*]They have too many financial obligations for carriage rights. They pay much more for carriage rights than the programming is actually worth. [*]They have too many channels to show sports programming. ESPN, 2, U, Classic, SEC, Longhorn, soon to be ACC .... When it was just ESPN, the would occasionally have Sports Center. They had re-runs, Aussie Football, rugby, strongest man competitions, lumberjack competitions, etc.. to fill in time when major sports weren't available. [*]They are a niche network. Pretty typical to niche networks they are trying to expand their base. In doing so, the get rid of off-center sports programming such as strongest man and try to put in social type programming to reach a larger audience. Similar to TechTV/G4, they are expanding the program offering, but alienating the base fans more than attracting new ones. [/LIST] The very big problem is that ESPN grew by using a revenue base that was hidden and not directly related to the perceived value of their product.(Subscriber fees) Their entire business model was based on the cable/satellite TV subscriber base continuing to grow. Cable/satellite subscriptions have decreased. On top of that I have seen estimates as high as 60% for people who do have cable/sat subscriptions who don't watch ESPN channels at all and would gladly drop those channels for a $10-15 a month reduction in their monthly bill. 60% of 80% means that 48% of their revenue comes from people who don't watch and don't want to pay for it. I don't think any company can survive that long term. [/QUOTE]
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