ESPN Loses A Record 621,000 Subscribers In One Month

Last April, HBO effectively marked the death of the cable TV bundle when they decided to launch "HBO Now" and sell their content directly to consumers for $15 per month. While other "over-the-top" providers have existed for years, this decision was pivotal because it was the first time that any major content provider decided to break with the traditional cable delivery model and go direct to consumer.Within a year, HBO Now had amassed 1 million subscribers. Meanwhile, Pay TV households collapsed around the same time as "cord cutting" accelerated.

Per the following data from Barclays' Media and Telecom analyst, Kannan Venkateshwar, the decline of Pay TV households really accelerated in 2Q 15 around the same time that HBO Now was launched. 

Cable TV

Meanwhile, the number of broadband-only households also surged.

Cable TV

Now, the biggest beneficiary of the cable TV bundle, ESPN, which exploited it's "must have" content for decades to negotiate ever higher rates with cable TV providers while forcing those rates down the throats of consumers by insisting its content be included in all of the channel "bundles", finds itself in the unfamiliar territory of losing millions of subs per year amid surging contents costs. In fact, according to Outkick The Coverage, ESPN lost over 600,000 subscribers in October alone which is worth over $50mm in annual revenue.

Yesterday Nielsen announced its subscriber numbers for November 2016 and those numbers were the worst in the history of ESPN's existence as a cable company -- the worldwide leader in sports lost 621,000 cable subscribers. That's the most subscribers ESPN has ever lost in a month according to Nielsen estimates and it represents a terrifying and troubling trend for the company, an acceleration of subscriber loss that represents a doubling of the average losses over the past couple of years, when ESPN has been losing in the neighborhood of 300,000 subscribers a month.

These 621,000 lost subscribers in the past month alone lead to a drop in revenue of over $52 million and continue the alarming subscriber decline at ESPN. Couple these subscriber declines with a 24% drop in Monday Night Football ratings this fall, the crown jewel of ESPN programming, and it's fair to call October of 2016 the worst month in ESPN's history. But this isn't just a story about ESPN, the rapid decline in cable subscribers is hitting every channel, sports and otherwise. It just impacts ESPN the most because ESPN costs every cable and satellite subscriber roughly $7 a month, over triple the next most expensive cable channel.

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