By Brad Hubbard | @bradhubbard
After pointing out the things wrong with ESPN, it is now time to point out how they can right the ship. Righting a ship that generated $10.8 billion in revenue in 2014 seems like an odd thing to say but it’s true. While this scenario does fall under the ‘disruption’ banner, there are some simple things ESPN can do to find some of the mojo again.
John Skipper is a smart guy. While there will be doubters out there after the whole ‘Bill Simmons incident’, you don’t become the head of Disney’s cash cow by being a moron. As he pointed out at the Code/Media Conference about why ESPN has been losing subscribers (which accounts for over 60% of it’s revenue), ‘cord cutting and some trading down from some larger packages to lighter packages’, which goes to show that Skipper is not turning a blind eye. He recognizes what is happening and has already begun to steer the ship into more favorable waters.
The ESPN family of networks is already on Sling TV which I have written about many times on this blog. Sling TV is cord cutting and ESPN is right there in the thick of it. ESPN needs to capitalize on OTT providers like Sling and sell it’s package outside of the satellite and cable providers (yes I do see the irony in that Sling is owned by Dish). ESPN needs their WATCH ESPN app to be stand alone and offer is on places like Amazon.com where you can get Starz and Showtime for $8.99 a month. They also need to offer is on platforms like Hulu, who is coming out with a live TV package, XBOX, and Playstation. ESPN needs to break from the shackles of cable and stand on it’s own.
Crazy? Not if you read Clayton Christensen’s ‘The Innovator’s Dilemma.‘
ESPN’s situation is a cross between sustaining innovation and disruptive innovation. In the sustaining innovation model, ESPN has to figure out how to create better products that they can sell for better profits to their customers. They own rights to just about every major sport so it’s clear that they have the inventory to do this. All it takes now is the will which it sounds like they do.
They are also battling disruptive innovation but they can win here too. TV was once complicated and expensive and to a degree it still is. However the OTT providers are disrupting this model and making it affordable and in some ways simpler. Like I mentioned a moment ago, ESPN has to stop dipping it’s toes in the water and just dive in. Yes it will upset existing contracts and partners in the short term but in the long run, it will be the right decision.
There is some of the lower hanging fruit that ESPN can pick and start to develop some wins. One of these is to improve their ads on ESPN.com. This playing of 30 second ads on their website in front of a piece of content that is only 33 seconds is just mind boggling. This is a damn ‘if/else’ statement in the code. It’s not rocket surgery. Yes you have to make money selling ads but you can also drive away your viewers away in the process. They have to find a balance and a better way to present advertisements online.
They also have to develop new talent. A lot of play-by-play and color commentators have walked out the door in recent months but that doesn’t mean the cupboard is bare. They still have Jon Gruden, Dick Vitale, Jay Bilas, Todd Blackledge, Steve Levy, Kirk Herbstreet, Rece Davis, Chris Fowler, Scott Van Pelt and Bob Ley among their talent pool. They need to add to it along with continuing to find innovative bloggers and reporters or people like Nate Silver.
ESPN is taking some hits but they are not denying it. They do not have their heads buried in the sand. Changes to OTT, developing talent, and creating new products takes time. The first step in identifying the problem is recognizing you have one. Skipper recognizes it and is taking steps to right the ship.