ESPN Slips as So­cial Me­dia Feeds Fans Clips

Sport­sCen­ter, the flag­ship high­lights show, is re­tool­ing it­self “They didn’t have a plan for this whole next gen­er­a­tion of stuff”

Bloomberg Businessweek (Asia) - - Companies/industries - −Gerry Smith and Lu­cas Shaw, with Christopher Palmeri

When Ul­ti­mate Fight­ing Cham­pi­onship star Ronda Rousey was vi­ciously knocked out by Holly Holm in a bout in Novem­ber, the clip seemed like the per­fect high­light to fea­ture on ESPN’s Sport­sCen­ter. Yet by the time the pro­gram showed footage, many fans had al­ready fol­lowed the fight live on Twit­ter and seen the clip on Red­dit.

That’s a chal­lenge for ESPN and Sport­sCen­ter, the flag­ship show in­tro­duced to pay-TV au­di­ences 35 years ago. ESPN is the dom­i­nant sports out­let on TV and the Web, es­pe­cially for lives­ports tele­casts, and the sin­gle big­gest profit con­trib­u­tor to par­ent Walt Dis­ney. But com­pe­ti­tion from so­cial me­dia and other chan­nels is eat­ing into its au­di­ence for news and high­lights, Sport­sCen­ter’s bread and but­ter.

“ESPN is so valu­able be­cause they have the most valu­able live-sports

con­tent,” says Liam Boluk, a me­dia strate­gist at Ja­son Hirschhorn’s Redef, a me­dia in­dus­try news­let­ter. “But the rest of their pro­gram­ming is un­der the same pres­sures as the rest of the in­dus­try.” So the net­work is re­vamp­ing Sport­sCen­ter for mo­bile view­ing and on­line shar­ing, as well as rolling out new edi­tions.

In Fe­bru­ary, ESPN will present a 7 a.m. EST edi­tion of Sport­sCen­ter to try to en­cour­age view­ers to watch on mo­bile de­vices on their way out the door, says Rob King, ESPN’s se­nior vice pres­i­dent for news. “Our pro­duc­ers have spent a lot of time work­ing with our tal­ent to really think about which au­di­ence we’re see­ing through the course of the day,” he says. The show is still rel­e­vant, he says, and fans want to watch—“it’s a mat­ter of where they are and how they con­sume it.”

In Septem­ber, Scott Van Pelt, a long­time ESPN an­chor, be­gan host­ing a new mid­night edi­tion of Sport­sCen­ter to try to com­pete with late night talk­show hosts such as Jimmy Fal­lon and Jimmy Kim­mel. The show is ex­per­i­ment­ing with new seg­ments, in­clud­ing one for bet­tors. A re­cent ad urg­ing fans to “end your day on a high­light” shows a col­lege stu­dent watch­ing Sport­sCen­ter on a tablet from a fra­ter­nity house rooftop.

In a re­cent note to clients, Rich Green­field, an an­a­lyst at BTIG Re­search, wrote that it’s hard to fathom fans tun­ing in to Sport­sCen­ter to watch high­lights when scores and footage are read­ily avail­able on­line through­out the day. The sports leagues them­selves in­creas­ingly have eaten into

Sport­sCen­ter’s au­di­ence by us­ing so­cial me­dia to post game high­lights and scores, ac­cord­ing to Green­field.

View­er­ship for live edi­tions of Sport­sCen­ter—the net­work airs re­peats through­out the day—is down 10 per­cent this year, ac­cord­ing to ESPN, and down 13 per­cent for the pregame show Sun­day NFL Count­down. Over­all view­er­ship has fallen 10 per­cent in 2015, though net­work ex­ec­u­tives say that’s really 4 per­cent if you ex­clude World Cup and Nascar events, which boosted rat­ings in 2014 and didn’t air this year. In ad­di­tion to live games, ESPN airs talk shows and orig­i­nal pro­gram­ming such as the 30 for 30 doc­u­men­tary se­ries.

View­er­ship at Fox Sports 1, a ca­ble net­work owned by 21st Cen­tury Fox that de­buted in 2013, is up 14 per­cent this year, with an av­er­age prime-time au­di­ence of about 286,000. At NBCSN, with an av­er­age au­di­ence of 274,000, view­er­ship has in­creased 25 per­cent this year. Still, both net­works draw only a frac­tion of ESPN’s 1,535,000, ac­cord­ing to Nielsen data.

Live game tele­casts have helped ESPN stay on top of the ca­ble-TV land­scape as the No. 1-rated net­work. In prime time, which is dom­i­nated by live sports, ESPN’s au­di­ence is up slightly over the past two years. Its Mon­day Night Foot­ball tele­casts out­draw all other net­works on that night of the week. ESPN also com­mands the high­est monthly rate of any ca­ble chan­nel from pay-TV ser­vices, at $6.64 per sub­scriber, ac­cord­ing to me­dia re­search firm SNL Ka­gan. “Our rel­a­tive ad­van­tage in the mar­ket­place is stronger than it has been in a long, long time,” says Ar­tie Bul­grin, the net­work’s se­nior vice pres­i­dent for global re­search.

In Oc­to­ber the net­work elim­i­nated about 300 jobs world­wide. Over the past year, it has parted with sev­eral on-air per­son­al­i­ties, in­clud­ing Keith Ol­ber­mann and Bill Simmons, who says the num­ber of peo­ple can­cel­ing pay-TV ser­vice caught ESPN by sur­prise. “I don’t think they ever saw it com­ing,” Simmons said on his pod­cast in Novem­ber. “They didn’t have a plan for this whole next gen­er­a­tion of stuff.” An ESPN spokes­woman says Simmons wasn’t privy to in­ter­nal con­ver­sa­tions about the com­pany’s fu­ture.

ESPN ex­ec­u­tives say they are pre­pared for the chang­ing me­dia land­scape and are far­ing bet­ter than some en­ter­tain­ment-ori­ented chan­nels. The net­work’s dig­i­tal au­di­ence, which isn’t counted in the rat­ings, is grow­ing, ac­cord­ing to ESPN, and its WatchESPN app, avail­able to paid-TV sub­scribers, has boosted the Mon­day Night Foot­ball au­di­ence by 1.5 per­cent. Ear­lier this month, the net­work un­veiled live stream­ing on its main app, which alerts mo­bile view­ers “when some­thing great is hap­pen­ing on Sport­sCen­ter,” says ESPN’s King.

Ad­ver­tis­ers are fol­low­ing ESPN’s au­di­ence on­line. Am­plifi, a di­vi­sion of the ad agency Dentsu Aegis Net­work, which han­dles me­dia buy­ing for Mi­crosoft, Gen­eral Mo­tors, and Home De­pot, has shifted some spend­ing to ESPN’s dig­i­tal chan­nels, ac­cord­ing to Andy Donchin, Dentsu’s chief U.S. in­vest­ment of­fi­cer. “If you want to reach men, it’s kind of hard not to buy ESPN,” he says. “They dom­i­nate the sports mar­ket­place. They used to be the 800-pound go­rilla. Now they’re the 795-pound go­rilla.”

The bot­tom line Live tele­casts have kept ESPN the top-rated ca­ble chan­nel, even as its au­di­ence moves on­line.

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