According to a Wall Street Journal article titled “ESPN Copes With Cable Cutting” by Miriam Gottfried, Disney is reporting an overall, year-over-year increase in the rate of decline for pay -TV subscribers to ESPN. During its fiscal third-quarter earnings report, Disney acknowledged the drop in subscribers and said that the decrease has offset growth from rate increases.
The culprit for the decline in pay -TV subscribers is likely the recent emergence of nontraditional, streaming subscription services from companies such as DISH Network, Sony, AT&T and Hulu just to name a few. This trend of cord-cutting means that more people are opting for subscription services that offer packages with fewer channels and those channels show fewer commercials. Finding reliable third-party subscription data is difficult enough for traditional pay -TV services, streaming services like Netflix and Hulu are either not tracked by groups like Nielsen or choose not to report subscriber data. ESPN is on both DISH Network’s Sling and Playstation’s Vue services and still reports a 2% increase in subscription data drop rates over last year, and that’s just the data they have access to. Nielsen is currently working with media companies to determine how to better include streaming services into its estimates, but a concrete solution has not been reached.
Declines in the number of pay – TV subscribers persist within the realm of streaming services as well, though to a lesser degree. According to independent research firm MoffetNathanson, traditional services saw and overall decrease of 1.3% in the U.S. during the year’s second quarter. Compare that to Sling decrease estimates of 0.8%, and advertising on streaming services appears to be the difference between a steady decline in subscribers and a freefall. However, since streaming services show far fewer commercials then traditional pay- TV services, advertisers have less opportunity for exposure. At the present time, your commercial may never be reach potential customers who stream.
The author, Bob Ottaway, is President and Founder of Ottaway Digital. Established in 1999, it has been a pioneer in SEO, digital advertising & social media since 2006.