It may be that ESPN’s star is fading, given that the once popular cable sports broadcaster has lost 7 million subscribers in the last two years.
This information surfaced when the Walt Disney Company, who owns an 80% of ESPN (with Hearst Corporation holding the rest), revealed it in a regulatory filing, on Wednesday, November 25.
It was thus discovered that ESPN, which is considered to be Disney’s most profitable enterprise, now only has 92 million subscribers left, a sharp drop from 2014, when their number was of 95 million.
The decline appears even steeper when considering that back in 2013 the TV asset boasted 99 million subscribers, and indicates that customers have been gradually opting for alternate sources of sports coverage.
It also suggests that the channel has lost all of the progress it had managed to achieve since 2006, the last time when it had been watched by 92 million customers.
When considering the fact that a regular subscription amounts to approximately $6.61 per month, this means that revenue from such services has decreased by around $550 million per year.
Moreover, similar reductions have also been encountered at ESPN Classic and ESPN News (each of them losing 6 million subscribers), as well as at ESPN2 (which lost 7 million customers) and at ESPNU (abandoned by 4 million subscribers).
Therefore, ESPN has actually been left with a $700 million gap in the revenue produced by its core channels, in comparison with the income earned 2 years ago.
In response to this crisis, it has been revealed by Reuters that the sports network is actually undergoing a process of restructuring, having targeted 300 positions for elimination.
The downward trend isn’t entirely surprising, given that Bob Iger, the Walt Disney Company’s CEO, admitted back in August that ESPN had experienced “some subscriber losses”, but few had expected that the slump would be so significant.
Overall, cable TV stations operated by Disney have suffered a dwindling in customers in the last two years, probably because of digital platforms which have become more popular lately, such as Neftlix and Hulu.
For example, ABC Family has been given up by around 5 million subscribers, while the original Disney Channel and the Disney XD channel have each lost 4 million clients.
In addition, other channels that are half-owned by Disney, such as History, Lifetime and A&E have also witnessed a similar downward slope, and this diminished reach is bound to affect ad revenues as well.
The process through which those who have TV subscriptions give up certain pay television channels or decide to pay for fewer hours of viewing is known as cord cutting or cord shaving.
As competition from other providers of media content grows, it’s natural that some users will renounce subscription television in favor of other more personalized or cheaper options.
The only main cable channels owned by the Walt Disney Company, which have actually experienced an surge in subscribers have been Disney Junior, as well as the international versions of Disney XD and Disney Channel.
Only time will tell if these new revelations from the 10k filing will influence the conglomerate’s share price, which has recently been on the increase, most likely due to the theatrical release of “The Good Dinosaur”, an adventure comedy-drama film produced by Pixar, one of its main subsidiaries.
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