Streaming media services, including Dish Network-owned Sling TV, could help make up for losses in traditional pay TV subscribers,ESPN President John Skipper said an interview with The Wall Street Journal published Tuesday.
However, he also expressed frustration with Apple’s attempts to date in the streaming device market.
Sports remains a growth business, Skipper said. It would be foolish to predict that sports rights — and therefore prices — would decline in the near future, even as traditional TV viewership continues to go down.
ESPN holds more sports rights than the rest of the sports media combined, he pointed out, suggesting that by utilizing those rights it could continue to create opportunities for revenue growth.
Sling TV earlier this month at CES 2016 announced that ESPN3, a live multiscreen digital network with live and on-demand sports contact, would launch on Sling TV’s Best of Live TV package later this quarter.
That will be the first time ESPN3 will be directly integrated with a pay-TV provider’s channel guide as well.
The ESPN3 offering will provide access to a variety of sports programming, including college football, college basketball such as the NCAA Championships, tennis, soccer and even cricket.
Sports is therefore a big part of the Sling TV service.
“When we signed the deal with Disney ESPN back in March of 2014, we knew it was a watershed moment for both the future of live Internet TV and the way sports fans watch their favorite teams,” Sling TV said in a statement provided to the E-Commerce Times by spokesperson Candace Dean. “Since then, a number of programmers have joined our service, and our sports offering continues to grow.”
The service could be a win for both ESPN and Sling TV, which can add more content without an increase in cost for the Best of Live TV package.
“Sling TV is adding users to ESPN,” said Joel Espelien, senior analyst atThe Diffusion Group.
“In the past, these users would have had ESPN anyway via a traditional pay-TV subscription,” he told the E-Commerce Times.
Addressing the Cord Cutting
There is no financial benefit to ESPN if people simply “trade down” from cable or satellite and opt for streaming services such as Sling TV, Skipper told the Journal. It’s a zero-sum gain.
However, there is a benefit for ESPN if the service brings in new viewers — potentially younger viewers who are known as “cord nevers.”
“As last year showed, as, one, people downgrade pay-TV service and, two, new households do not sign up for pay-TV service, ESPN is bleeding customers are a concerning rate,” Espelien noted.
“Sling TV is a way for them to stem — but not stop — the bleeding by providing people with a cheaper path to having ESPN,” he added.
That could ensure that millennials stay with ESPN, at least until there is an even more direct way for them to get connected to the sports content they seek.
“Where they may need to go eventually is a path where an ESPN Now service can be bundled directly with broadband — as HBO does — today,” Espelien said.
Advertisers are one hurdle for streaming services. ESPN may offset the viewers it loses as people cut the cord, but streaming services remain hard to track.
“Any new eyeballs are going to increase carriage revenue and boost ratings,” said Erik Brannon, senior analyst for U.S. television at IHS.
“Regarding carriage fees, any increase in subscribers is going to help ESPN. The question is by how much,” he told the E-Commerce Times.
The more pressing question is how the new eyeballs would be measured, Brannon observed. Rating tracking services such as Nielsen and Rentrak have begun to monitor and account for viewership via streaming media only recently.
Even with a boost from services such as Sling TV, it may not be enough to counter the trend in cord cutting.
“We believe that Sling has 442,000 subscribers today,” added Brannon. That’s “a far cry from making up for the millions of subscribers the channel has lost in recent years.”