[valuearb]

You really missed the point, the article nailed it and your analogy is entirely wrong. ESPN got a flat fee per user + the ability to advertise to them. That gave them a huge financial incentive to overspend on the best content they could get to build the greatest sports "steakhouse" of all time and they did it. They spent up the wazoo on content. But the bottom is dropping out of the model because of cord cutters so now they have change and adapt to not getting flat fees for much longer.

[white-flame]

"Because of cord cutters" seems awfully accusatory here. The real confounding factor from the article is that ESPN was being subsidized by fees from customers who don't watch the channel, but still were paying high bundled fees compared to other channels.

This is shifting to them receiving fees from those interested in their programming, which seems much more reasonable in concept.

[noxToken]

It's not that cord-cutters are a bad thing, but isn't that the crux of ESPN's financial woes? Nearly everyone and their mama had cable about a decade ago. No matter if you were a 4 person family, living off campus where utilities were covered, or in the military - people had cable. If you were fancy, you had satellite programming. Then cord-cutting happened.

It is the fault of cord-cutters, because they aren't subsidizing the cost of ESPN for people who want to watch ESPN. Then ESPN could not pivot quickly enough to stop the bleeding. So yeah, ESPN is getting money from people who are interested in sports, but it is because cord-cutters had enough.

[rhino369]

That is definitely a huge part of it. And it's not just cord cutters. Many cable stations now don't include sports channels in the basic package. So many people who pay for cable no longer pay for ESPN.

Another factor is that the Internet is a better source for sports news. Highlights are on YouTube. Twitter feeds post links to analysis from all over the web. Nobody needs to watch sports center for news anymore.

[BoiledCabbage]

I'll explain it less confrontationaly than you did. First, the argument you presented actually is evidence for what I wrote.

> But the bottom is dropping out of the model because of cord cutters

As I wrote, the market across the board is becoming efficient. This is restating my point. Previously the only option was for cable, now there are other options for consumption. This is increased market efficiency.

> so now they have change and adapt to not getting flat fees for much longer.

Yes they have to change from their previous fee structure, but there are many things they could've changed to that would've supported quality programming. Instead ESPN changed to an advertising model, which doesn't support it. (Ex. Why does HBO get showered with awards year after year? And how do they monetize viewers?).

To understand the difference, imagine a directed graph with a transition between two nodes. You're too focused on the node it's leaving - instead I'd recommend focusing on the node it's arriving at (efficient market advertising model). Regardless of where you come from, if that's where you end up you will quickly produce fast-food content or you'll go under.

ESPNs problem from before is not that they had a subscription model. It's that they had a bundled subscription model. It was bundeled with Cable, and they were making money from people who never watched them. Their revenue was inflated. Rather than trim and find the true medium, they're throwing it all away and going advertising.

Sports can absolutely be supported via expensive subscription (see NFL Game Pass, NFL Sunday Ticket, MLB Packages, ...). Up to $400 / year for it. But ESPN is going a different route. One that will unfortunately turn them into the MTV of sports. But they won't be the only one.