There seems to be no end to the plight for The Walt Disney Company’s DIS ESPN, which has been losing subscribers over the past couple of years. Further, ESPN witnessed lower viewership for highly anticipated "Monday Night Football" in 2016.
Per Nielsen data, the recent Monday night’s match between Dallas Cowboys and Detroit Lions generated an audience of 18.6 million. This was not only the best performance of ESPN for "Monday Night Football" viewership since 2014 but also helped it to increase its average for 17 games this season to 11.4 million viewers, which is marginally ahead of the 2007 season wherein it attracted 11.2 million viewers.
However, the average viewership for 2016 marked the second-worst “Monday Night Football” season since the 2006 season and third successive year of loss in viewers. Per Nielsen data, ESPN’s "Monday Night Football" viewership has declined 12% from the previous season.
Decline in NFL viewership is a major concern for ESPN as the company is shelling out approximately $1.9 billion per season over the tenure of the deal, up approximately 73% from the previous deal which ended in 2014. In 2011, the company stretched its broadcast rights deal with the National Football League till 2021.
For some time now, declining subscriber count and higher programming costs have been a cause of concern for investors. Disney’s primary cash cow, ESPN, has been under immense pressure as the Pay-TV landscape continues to change owing to migration of subscribers to online TV. Falling subscriptions will have a telling effect on the network’s ad revenues. In the reported quarter, ESPN’s ratings were impacted by change in time of bowl games.
ESPN has been losing subscribers on a regular basis. It lost nearly 3 million subscribers in the past one year as the number of cord cutters continues to increase. At the end of the fourth quarter of fiscal 2016, ESPN had a subscriber base of nearly 89 million in comparison with 92 million at the end of the prior-year quarter.
However, Disney is striving to bring back ESPN’s golden days. In an effort to attract online viewers, the company has inked a deal with video streaming, data analytics as well as commerce management company BAMTech. Further, the company has the option to acquire majority of the stake in BAMTech, in future. It said that it will use BAMTech to create an ESPN-branded, over-the-top (OTT) video streaming service that will cover a variety of sports. Further, Disney is putting a lot of effort to make its content accessible to more customers. It said that AT&T’s DirecTV will feature channels like ESPN, ESPN2, ABC, Freeform, Disney Channel, Disney XD as well as Disney Junior in their subscription packages in the upcoming DirecTV Now OTT service.