Business

Americans May Love ESPN, But Not As Much As They Love Eight Bucks

56% of cable subscribers polled in a recent survey said they’d happily drop ESPN and ESPN 2 if it meant a lower cable bill.

Elsa / Getty Images

America’s cable-watching public may be less attached to ESPN than many think, according to survey results released today.

In the survey, commissioned by BTIG research analyst Rich Greenfield, about 1,600 U.S. consumers were asked two simple questions: “If you could save $8 per month by removing ESPN and ESPN2 from your cable or satellite package, would you do it?” and “If ESPN and ESPN2 were ONLY available as a standalone service like Netflix, would you pay $20 per month to subscribe?”

Of the responders who are cable subscribers, 56% would get rid of ESPN and ESPN2, including 49% of men. “There’s this view that younger men are so dedicated to sports, but whether you look at age or sex, almost half of men would save eight bucks,” Greenfield wrote.

Only 6% of responders said they would pay $20 a month for ESPN and ESPN2 as a standalone streaming service.

Through its distribution agreements with traditional cable providers, ESPN gets nearly $9 billion in annual revenue, Greenfield said. If 15% of the 115 million U.S. households with internet signed up for a $20/month streaming package, ESPN would bring in just over $4 billion in revenue.

“A DTC [direct to consumer] model would leave Disney/ESPN with far less subscription revenue, a smaller base of subscribers to advertise to (reducing ad revenue), at the same time when they would need to invest in technology to support over-the-top video streaming,” Greenfield wrote.

“The math for a direct-to-consumer offering for a basic cable network does not work, especially for channel(s) with very high monthly fees.” In 2014, Disney had $21.2 billion in revenues from its TV networks, which includes the company’s cable channels.

ESPN has already suffered a decline in cable subscriptions, shedding over 3 million households according to data from Nielsen. While it is available in some alternative, “skinny” bundles of channels, like Dish’s Sling TV, it will not necessarily be available in all of them. Verizon’s Custom TV service, which allows customers to pick channel packs, was the subject of a lawsuit from Disney that claimed it violated agreements.

In a conference call with analysts in November, Disney chief executive Bob Iger said some desertion of cable subscriptions was due to “economic factors,” along with “young people…not signing up as quickly as they once did.”

“At some point the subscriber numbers fall far enough you start to get people to launch direct to consumer or smaller bundles,” Greenfield said. “I wouldn’t be surprised if this year you’ll see bundles without ESPN.”




Check out more articles on BuzzFeed.com!

Matthew Zeitlin is a business reporter for BuzzFeed News and is based in New York. Zeitlin reports on Wall Street and big banks.
Contact Matthew Zeitlin at matt.zeitlin@buzzfeed.com.
 
 

More News

More News

Now Buzzing