ESPN Is Bleeding Cash — But Cord Cutters Aren’t The ProblemBy Jeremy Evans / March 10, 2017 /
ESPN is hemorrhaging cash and viewers — but not because of cord cutters. The millions who watch ESPN online for free are the real problem.
ESPN — the world leader in sports journalism — is reportedly losing as many as 10,000 subscribers a day. Now the network, owned by Disney Corp., must cut staff salaries by tens of millions of dollars.
What’s behind the stupendous decline of ESPN — heretofore believed to be indispensable to US sports fans, and therefore invincible?
A commonly cited reason is cord cutters. People are canceling their overpriced cable plans. Instead, viewers are adopting cable TV alternatives, like streaming services Sling TV, PlayStation Vue, and DirectTV Now. These services include ESPN — but the network gets less in fees from streaming services compared to traditional cable and satellite companies.
That might explain why ESPN needs to cut costs. But what about those 10,000 subscribers? A very high percentage of the ESPN viewers who cancel cable would be expected to sign up through a streaming service. Except it appears many thousands are not. But it probably doesn’t mean they’re not still watching ESPN.
ESPN’s Real Problem: The Millions Who Watch ESPN For Free
ESPN has a much bigger problem on it hands than cord cutters: pirates.
While it is a growing trend to cancel cable, the trend toward illegal streaming is skyrocketing. TV piracy sites now get billions of visitors every month. It’s hard to get estimates of the number of people who watch pirated live sports streams, but the numbers are likely to be comparable.
ESPN probably doesn’t want to talk about piracy, for fear of turning more people onto it. But sports broadcaster HBO has taken notice of illegal streaming of its sports events, and wasn’t shy about saying it lost significant income to piracy during the last Floyd Mayweather Jr. match. Just recently, Premier League, one of the biggest names in UK sports, very publicly went after sellers of Kodi streaming boxes loaded with piracy software.
The Whack-A-Mole Problem
Unfortunately for Premier and other broadcasters, it’s not as easy as going after hardware sellers. This is a software problem. Software that makes IPTV and Kodi — two of the biggest players in online streaming — possible.
IPTV (internet protocol television) services give subscribers access to the pirated streams of hundreds of popular channels for cheap. Kodi is perhaps an even bigger culprit. The media player, which is free to download and use, makes it extremely easy to live stream virtually any sports event for free. ESPN streams are very popular on Kodi.
Even if Kodi and IPTV were somehow eliminated, there are countless websites that do nothing but hunt down and post live streams to sports, tv, movies, and etc. Like an unbeatable game of whack-a-mole, when one is knocked down it pops up again in no time.
Granted, many of these piracy sites repel the average sports fan, either for fear of getting a virus (a very real concern indeed) or because the user experience tends to be poor. Kodi, on the other hand, is safe as long as you use Kodi with a VPN. And the streaming quality, slick interface, and overall great user experience on Kodi has been steadily attracting a lot of new users.
What’s A Network To Do?
The current state of illegal streaming doesn’t leave ESPN with many good options. Especially since — and this really sends content creators into a tizzy — streaming copyrighted content for free isn’t even clear-cut illegal by today’s laws.
All ESPN can do is try to keep pirated content under some semblance of control, and hope that sports fans will prefer to pay than engage in “unethical” or potentially illegal behavior. But the numbers of viewers its bleeding suggests otherwise.
[Postscript: There’s another factor that may also be spurring subscribers to flee from ESPN. Over the past few years, social issues have occupied more and more of ESPN’s broadcasts. Maybe some of us just want to watch sports with our sports, and save the “important conversation” for another time and place. It’s a thought…]