One of the bigger sports media stories over the last couple of years has been people “cutting the cord,” and abandoning the traditional pay cable subscription template. To be sure, people are leaving pay cable at an increased rate, and it has cut ESPN’s subscription list by almost 15 million over the past few years.
But the idea that the Disney/ABC/ESPN conglomerate has been fiddling while cable subscriptions burn is not even close to the truth.
Among the highlights from the interview:
· Disney/ABC/ESPN have four priorities for the near future – creating a direct-to-consumer model, expand the audience reach, get back to quality storytelling, and continue to keep pace with innovative technology
Obviously, direct-to-consumer development covers a lot of these goals. It’s why they rolled out ESPN+ the digital platform that offers “extra” content not seen on the networks. Right now, it is mostly international events, such as soccer, but there are plans to expand that to include mainstream events such as major league baseball. Pitaro expanded on the new content to come.
“In terms of originals, we created a series called “Detail” with Kobe Bryant, which has been a very big success for us. We decided to expand it into other sports and now have Peyton Manning for the NFL. At the same time, this is just the first inning. We’re pleased with the performance of the service, but there’s a lot more to come. We’re excited about the rights we’re contemplating about bringing to the service.”
Currently ESPN+ only costs $5 per month, and they are closing in on 2 million subscribers. Pitaro added that combining the digital platforms with the traditional pay cable business model gives them time to study exactly where live sport programming is going in the next decade in terms of distribution.
“We are running parallel paths here. We’re making investments on the digital side, which includes ESPN+ and the ESPN app in general, which had 20.6 million unique users in October and was up 19 percent year over year. The numbers for Octobers have us at 101 million unique users across platforms. We’re number one and we’re growing. And this includes the traditional model, which remains a priority for us because it’s a model that has been good to us.”
Essentially the Disney corporation believes that “Form Follows Content”. No matter what form the distribution takes, those who have control of the live content will still be in the strongest position. Pitaro makes it clear that ESPN will always be ready to bid for content.
“We have the best rights-acquisition team in the business. And our people have been doing this for a long time and they’ve always faced tough competition,” Pitaro said. “They operate with an incredible amount of financial discipline. But we are in this for the long term, and we will continue to focus on serving the sports fans, anytime, anywhere.”
The NFL is still the most valuable commodity out there, and this season, its ratings are seeing real gains from the past few years. And if you think that the sudden rise in talk over expanding the College Football play-offs before the next round of contracts are up is over anything but re-bidding the content, then you haven’t been paying attention.
There will be new bidders the next time around, probably including (but not limited to) Amazon, Hulu and other tech giants such as Google. ESPN’s parent company is right there and more than willing to enter the new arena.
“There’s no doubt that there’s competition out there, but we like our hand,” Said Patiro. “We’ve always had competition and our team has done a very good job closing deals in a smart, disciplined way despite all that.”
The Disney/ABC/ESPN troika has a lot to offer, according to Pitaro
“If you look at the breadth of offerings that ESPN brings to the table: not just the best production team in the business, but we bring a broadcast network with ABC, we bring in promotion from various areas of the Walt Disney Company. If you’re a league and your rights are coming up for renewal, you have to think long and hard about going anywhere other than ESPN because we’re very good partners.”
His final sales pitch made it clear that all live sports programming is still in their sight.
“It’s who we are. When I grew up, I didn’t turn on ESPN just to get baseball highlights. It brought me up to speed on all sports. We’re not going to deviate from that. We want to be the starting point and the destination.”
Pitaro then added, “It also goes back to our other priorities: quality storytelling and programming — not just on TV but everywhere including platforms such as Snapchat. We also want to maintain a spirit of innovation and not being afraid to try new things and fail. That’s what ESPN has been for the past 39 years and we want to make sure we continue to do that.”