For many sports fans, it’s unthinkable. But young people have stopped watching the games live. They would rather watch them when it’s convenient. And that, pardon the pun, is a game-changer.
Last week, several news agencies reported that ESPN, the largest sports network in the U.S., lost 550,000 subscribers in November. That seems like a stunner, but TV ratings analysts at Nielsen say sports viewership has been waning for a while.
Live sports have been the strength of legacy broadcast media, and they paid handsomely to maintain that advantage. Now they’re vulnerable, and it could not come at a worse time. Technology companies with deep pockets want to take cord-cutting mainstream with on-demand programming.
This monumental change in the media environment is reminiscent of changes in the information landscape of the Gilded Age from around 1880 to 1920.
|The thrill of victory and the agony of defeat … can all wait on my convenience, say Millennials.|
Back then, legendary traders like Jesse Livermore and James Keene were killing it on Wall Street by finding ways to manipulate public opinion through favorable newspaper coverage.
Those were the days when more than a dozen newspapers covered the stock market with multiple editions per day. And operators like Livermore learned how to play them to his advantage — not too unlike a certain real estate magnate who is now the president-elect.
ESPN, a division of Disney (DIS), has been coy about its losses in public statements. In early October, ESPN’s vice president of global research, Artie Bulgrin, told SportsBusiness Daily: “Outside of the fact that we’re in this very strange year, I’m not seeing anything unusual. In fact, it’s probably remarkable that sports is holding up as well as it is.”
According to the National Geographic, the enormous energy of a tsunami can lift giant boulders, flip vehicles and demolish houses. But from a financial standpoint, the K Wave will be even worse: Millions could lose their homes. Millions more could see their lifesavings wiped out in an instant. Businesses, large and small, could close their doors. Even the bare necessities of life — food, water, clothing — might become scarce.
That’s why it’s so important that you get your free copy of “STOCK MARKET TSUNAMI” right away, click here to download now! – Larry Edelson.
That’s the sunniest possible interpretation. Another is: Viewers are moving away from live sports and toward sports on-demand. While ESPN lost more than 1 million cable subscribers during the past two months, its own numbers show that its digital platform has been setting records. In the past 12 months, it had an average of 109 million monthly viewers who watched a total of 5 billion digital videos.
And that’s where it gets tricky. ESPN will shell out $7.3 billion in 2017 to broadcast live sports. Yet it holds no exclusive rights to the highlight footage that shows up quickly on YouTube. In fact, that high-definition, on-demand content posted by official NFL, NBA and MLB channels puts Sports Center to shame.
As a further affront, recently Variety reported Apple (AAPL), Alphabet (GOOGL), Verizon (VZ), and Amazon (AMZN) want to stream future NFL games.
This desire for digital sports only reflects the overall growing trend toward digital on-demand fare. Netflix (NFLX) will spend $6 billion on original programming in 2017. Amazon’s Prime will spend $3.2 billion. They deliver that content on demand everywhere to smart phones, tablets, computers, video-game consoles and TVs.
The tenth Digital Democracy survey from consulting firm Deloitte revealed Millennials represent more than a third of the U.S. population aged 13-66. At roughly 83 million strong, Millennials are just as likely to consume media content on other screens as traditional TVs. They spend more time streaming video than watching live TV. And, most important, they value their streaming services more than pay TV because it allows them to watch content when they want.
ESPN is now competing head-to-head with determined technology companies that Millennials love. And the cable sports giant probably won’t win, given rising content costs, falling subscribers and migration to an on-demand world.
Netflix is the best pure play for the on-demand trend. It now has more than 83 million subscribers worldwide and 47.1 million in the U.S. Amazon and Alphabet are also formidable players with Prime, YouTube and their sports-streaming aspirations. And now that its problems are finally being aired, perhaps it is time to look at beleaguered ESPN parent Disney, too.
Revisiting the Gilded Age for news?
Back in the Gilded Age – circa 1880 to 1920 – the now-defunct New York World was one of the most popular newspapers. It was emblematic of the innovative mood that pushed the agenda of corporate and Wall Street titans alike. Founded in 1860, it was purchased by Joseph Pulitzer in 1883 and became the inventor of many of the forms of journalism practiced today.
One of its most famous journalists at the time was Nellie Bly, a pioneering investigative reporter in the 1880s. The newspaper’s headquarters, the New York World Building, was the tallest office tower in the world when completed in 1890. It was torn down in 1955 to build a new ramp to the Brooklyn Bridge.
The World became one of the first papers to run color in 1896, and its Yellow Kid cartoon lent its name to the term “yellow journalism,” which means sensationalism. The paper earned that sobriquet amid a series of fierce circulation battles with its archrival, the New York Journal-American, owned by William Randolph Hearst.
Pulitzer was best known for running stories that encouraged the thriving new immigrant community to read his paper, and many of these stories had great social impact, particularly the paper’s campaign against unsafe tenements. It actively covered the exploits of flashy stock market traders – like Jesse Livermore – alternately making them out to be folk heroes or villains, depending on editors’ reading of the public mood. Sounds familiar.