ESPN lost 2 million subscribers in 2016, signaling the potential end of the cable TV era.

2016-11-29

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Disney recently reported that, as of October 1, 2016, its popular sports cable network ESPN had 90 million subscribers—down by 2 million from the 92 million recorded in fiscal year 2015. In 2015, ESPN’s subscriber base also experienced a sharp decline. Media outlets have noted that this traditional sports television network may continue to lose subscribers in the future.

1. Nearly 10 million subscribers lost in the past three years
In 2014, ESPN had 95 million subscribers. However, it appears the network has been losing users year after year. Back in 2013, ESPN boasted a massive 99 million subscribers, but now that number has dropped to just 90 million—a figure that marks the lowest since 2005. Over the past three years, ESPN has lost 4 million, 3 million, and, most recently, 2 million subscribers, respectively. Interestingly, ESPN’s subscriber count last reached 92 million back in 2006.
According to estimates from Fortune magazine, a significant drop in users has resulted in ESPN losing $1 billion in revenue annually.
ESPN responded by noting that, for at least the past several years, the rate of subscriber losses has been trending downward. However, data monitoring firm Nielsen pointed out that, according to its statistics, ESPN lost another 621,000 subscribers in November—marking yet another all-time monthly record for the company.
According to available information, ESPN is a U.S.-based cable television network that delivers sports programming 24 hours a day and holds exclusive broadcasting rights to numerous major sporting events. In addition to this, ESPN offers users a comprehensive range of viewing options—catering to audiences whether they prefer TV, radio, websites, mobile apps, or even print magazines.
2. Subscriber numbers are declining, yet subscription prices continue to rise.
ESPN's subscription prices have remained consistently high. In 2014, ESPN's subscription rate was four times higher than that of the second-ranked U.S. network, Turner Network Television (TNT). Despite ongoing declines in subscriber numbers, ESPN announced in August of this year that it would raise its subscription prices—bringing the monthly fee to nearly $8. According to a report from the Chicago Tribune, a survey revealed that 56% of respondents would be willing to cancel their ESPN subscriptions just to save on this cost.
ESPN is the largest sports cable network in the United States and also Disney's flagship sports cable channel, accounting for 70% of Disney Media Networks' sales revenue. Take the NFL's most popular event, the Super Bowl, as an example—advertising fees there have reached astonishing levels, with a single 30-second spot on ESPN reportedly fetching as much as $5 million.
In the fourth quarter of 2016, Disney reported revenues of $1.31 billion, a 3% decrease compared to the same period last year—primarily due to declines in its Media Networks, Consumer Products, and Interactive Media segments. Specifically, the Media Networks segment saw a 3% drop, while the other two segments experienced even steeper declines of 17%. Notably, the reduction in ESPN subscription subscribers was the main driver behind the decline in Disney’s Media Networks profitability.

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