Wednesday, April 10, 2019

If I Were Disney CEO Part 37 - ESPN

"I think that there's way too much pessimism about ESPN because ESPN is still in demand from three constituents you want to be in demand the most from.  One - distributors.  Two, consumers and three, advertisers.  And the reason it's in demand is the brand is still strong, the product is still good, and we're invested nicely to keep that product as high quality as possible."
Bob Iger, CEO the Walt Disney Company, February 7, 2017

The concept of ESPN was conceived in late May 1978 by Bill Rasmussen after he was fired from his job with the World Hockey Association's New England Whalers.  With land in Bristol, Connecticut and funding from Getty Oil, ESPN launched on September 7, 1979, beginning with the first telecast of SportsCenter.   From that first broadcast to 1.4 million cable subscribers, the channel has continued to grow and grow.

In 1984, the channel was purchase by ABC, greatly increasing the networks ability to compete for major sports contracts and increasing its credibility.  By 1992 and 1993, ESPN had expanded into radio and a second channel, respectively, helping it become the fastest growing cable channel in the 1990s, expanding its national reach to 75 million subscribers.

In 1996, The Walt Disney Company acquired ESPN as part of its acquisition of Capital Cities/ABC.  Over the following years, though ESPN would face challenges in waning cable subscribers, it remained a cornerstone of the Walt Disney Company.

In April 12, 2018, the networks launched ESPN+, a standalone, over-the-top streaming service, which currently has over 2 million paying subscribers.

ESPN's largest challenge relate to the changing form of media consumption and a bit of its overgrowth.  The steps into ESPN+ and direct streaming are a start, but the interplay between streaming, network, and cable is something that is going to need to be further explored.  ESPN should be the name in sports and the movement of the company should keep it in that place.

And it's that space that drives my recommendations for the network.

Primary Goals for the Division:
  • Streamline and Differentiate - ESPN currently offers 8 channels and other services.  I would seek to pare the list down to four. 
      • ESPN - the flagship channel. 
      • ESPNEWS - Just news and commentary.  Heavier on the news with the ticker at the bottom.
      • ESPNLive - A re-branded, ESPN2 focusing solely on live sports broadcasting.  
      • ESPN Deportes - ESPN in Spanish, with its own unique programming.  Recognizing the global reach of the brand.  
    • Each of these channels has a specific niche and reach.  The rest of the content that was previously generated should be pushed to the streaming platform.  This includes pushing classic sports content to the streaming platform. 
  • Coordinate Between the Different Channels - i.e. the Megacast approach.  For the most important, the most watched programs, why not offer a variety of ways and commentary to experience them.  In 2018, ESPN offered viewers 20 different ways, across 11 different platforms, to enjoy Alabama's 26-23 overtime win over Georgia in the title game.  There was the traditional game coverage on ESPN.  There was also the "Homers" telecast on ESPN2.  There was the "Coaches Film Room" on ESPNEWS.  And the "Finebaum Film Room" on SEC Network.  It could have been a mess, but instead it worked wonders as viewers jumped around networks and media platforms and sampled different announcers.  ESPN has a virtual army of announcers, analysts, insiders, and ex-players and coaches.  Why not put them all to use to keep up this kind of MegaCast approach?
  • Focus on Strengths - It's fairly simple.  Live sports programming, sports news, commentary, and documentary.  Work out from these cornerstones and build out each channel from these.
  • Lean Into Streaming - ESPN+, ESPN's streaming offering, has proven to be a great boon to the network.  As of February 2019, the service has over 2 million paying subscribers.  As with the other channels, streaming provides the perfect opportunity to be fed by the network and to feed the network.  It's another opportunity for differentiated coverage, another avenue for original programming like documentary and scripted programming.  
  • Move the Specific University Channels to Streaming - The Longhorn Network and the SEC Network have been more controversial additions to the ESPN roster.  And while they are drawing a large number of subscribers, those numbers are limited by regional limitations, including in streaming options due to proof of cable subscription for streaming access. Were the programming moved to streaming subscription only, this could open these options up to a much larger subscription base.  For example, Patrick Ryan, Policy Counsel, Open Internet at Google pointed out that the reach of the Longhorn Network as of September 2012 was about 10 million potential viewers, whereas if it were online and open, it could reach 230 million viewers in the United States, or as many as 2 billion viewers.
  • Simulcast "Monday Night Football" and potentially other options on ABC - "Monday Night Football" drew the smallest average viewership among the league's five main NFL TV packages in 2017.  The league is already simulcasting most "Thursday Night Football" games on Fox and the NFL network.  Why can't ESPN and ABC take a similar approach?  Yes, simulcasting could play into the problem that ESPN has been facing with regard to subscribers being down, but if played right, it could be a form of brand expansion.  The focus should be on different announcing teams on the simulcast, providing a variety of coverage, leading the truest fans to flip through them all.
  • Flex Scheduling on "Monday Night Football" - Sunday night football on the NFL is able to move games from Sunday afternoon to Sunday night with twelve days notice.  This process is used to ensure that Sunday night provides exciting football with surprise teams getting to play their way onto the prime-time slot.  ESPN, on the other hand, has a fixed Monday night schedule, which can make for uneven prime-time play.  Some sort of arrangement should be sought with the NFL for a certain number of flexible schedule games for Monday Night Football.
  • Resurrect the Wide World of Sports brand - ABC's Wide World of Sports programming disappeared as ESPN branding took over.  The program was one of the longest running television programs and was listed in Time's top 100 television programs of all time.  It was unnecessary to discard the program and should have been worked into ESPN's programming.  It remains a great way to program beyond the NFL, NBA, MLB, etc.  And the "thrill of victory...agony of defeat" byline needs to come back as well.
ESPN can and should remain a vital part of the Disney company.  Like everything else in the company, how it adapts to the changing media landscape will determine how vital it will be.  Hopefully, these suggestions could provide a successful start forward.

Up next in the series: National Geographic.

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