ESPN Dispels The Idea That Online Distribution Cannibalize Television




ESPN recently dumped a lot of data on its investors to fight back against arguments that they are struggling against cord cutting and new competition. The numbers show ESPN should be financially stable  through 2016. Even though they are quick to point out that cord cutting is not hurting their market they are wary of talking past 2016.

The recent numbers released show that 79% of ESPN viewers watch the channel live. ESPN and other live events are one of the few things holding many cable subscribers back from cutting the cord. What has been interesting to see from the numbers ESPN has released is that as ESPN offers more content online their cable viewership has also grown. “It’s exploded the misconception that more platforms would cannibalize television,” says Artie Bulgrin, SVP Global Research and Analytics.

Even though ESPN blocks live streams to non cable subscribers they are also one of the most shared services. They have not come out on the issue of account sharing but they stance seams to be similar to HBO’s that it helps them. These new numbers clearly lead us to believe they are benefiting from the account sharing happening between cord cutters.

ESPN success is clear evidence that the positives of online distribution greatly out weighs the feared negatives. As ABC fights back against online content and CBS expands its deal with HULU these numbers from ESPN should put many networks at ease of offering their content online to customers.

ESPN and live TV are the best hope of cable companies to keep subscribers. The question will be at what point dose the declining cable viewership force ESPN to start selling directly to consumers. Our best estimate is 2017-2018 could be the years that the pain of competition and declining cable revenue forces EPSN to start looking for new income streams based off of these numbers.

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