The Week In Review: ESPN Gets Dinged and Al Jazeera America Shuts Down
1. ESPN Gets Dinged
BTIG analyst Rich Greenfield shook things up a bit this week when his firm released a survey showing that 56% of current subscribers would gladly give up ESPN to save $8/month.Now we have nothing but mad respect for Rich and consider him a good friend, but one thing we’ve learned about TV surveys is that they’re a lot like diet surveys: full of good intentions that are rarely ever realized. That’s why all those people who were going to jog five miles a day and eat carrot sticks are sitting on the couch with a box of Ho-Hos come February. Same way all those people who said they’d cut the cord “next year” are still paying Time Warner $150/month for the titanium package.BUT… while we may be skeptical of the poll results, we do believe that there are plenty of reasons people would want to give up ESPN.There are the obvious reasons: people aren’t sports fans; people are only fans of a single sport and so would only want ESPN during, say, football season; people are fans of sports that aren’t covered by ESPN.Then there are the less obvious reasons: ESPN now has plenty of competition and lots of teams are more easily found on their local networks than on ESPN. To wit: we are big fans of the Brooklyn Nets. Most Nets games are on the local YES Network. The ones that aren’t on YES seem to be on TNT. Very few wind up on ESPN, which we mostly watch for SportsCenter. And we’re watching that a lot less frequently these days too.In addition to competition from other networks, ESPN has competition from the leagues themselves too, not so much their paid broadcast networks, but rather their apps and websites which do a fine job of providing highlights and live coverage of the game, making ESPN a little less necessary.
Why This Matters
ESPN is one of the lynchpins of the Disney bundle, along with ABC and the Disney Channel. Without it, the cost of the bundle goes down.BUT… bundles are not the rip-offs the tech press makes them out to be. In fact, they’re a good deal for anyone who likes niche channels.The pricing structure works like this: NBC decides that the cost for NBC proper should be $20/month (we’re making numbers up for the example.) Assume most viewers will want NBC. So then, the network will throw in all their additional channels— SyFy, USA, Bravo, MSNBC, et al, for another $4/month, $24/month total for the whole NBC bundle. If you were to buy say, Bravo and USA separately, a la carte, it might cost you $3/month apiece, plus $20 for NBC, so you’d be paying $26/month and only getting 3 channels. Which is why, for many viewers, the bundle is actually not a bad deal at all and why we think it will continue to live on in some form or another.For ESPN, the important learning here is that they need to retool: they need to figure out a way to become relevant to all those people again so that they won’t want to drop ESPN. That’s a big challenge, but it’s not impossible. Remember, MTV used to only play music videos, and Discovery was all about nature documentaries. ESPN has been relying on a 20 year old formula and successful as it’s been, it seems to have finally run its course.
What You Need To Do About It
Look at your own network and understand the value to the consumer and decide if you need to shift your programming around and retool. And keep an eye on Disney stock and see how the pressure on ESPN (and sports on TV in general) seems to affect it.
2. Al Jazeera America Shuts Down
Al Jazeera America is going to be shutting it's doors this month after a three year run. Most media coverage focused in on how crowded the news field was and how they never tried to match the infotainment on CNN and others.We think that’s avoiding the real reason though: Al Jazeera never succeeded in the U.S. because despite hiring strong team of American journalists, they never managed to get pas the perception that they were Terrorist TV.That may sound harsh, but it’s a reflection of the times. Al Jazeera America was facing an America that views the Arab world with suspicion and sees the Arab press as a prime source of anti-American rhetoric. While Al Jazeera America was nothing of the sort, it was up to them to let people know that, to get across who they were and what they stood for, and that’s something they very much failed to do.Take the name, for starters. They would have been much better served calling themselves AJA News or something that signaled that this was not the local branch of a foreign news service whose purpose was to explain the United States to the folks back home. That’s the same conclusion most people would draw from a BBC America news service: that the channel would offer a British take on what’s going on in the U.S. Al-Jazeera needed to get across that they were an independent, U.S.-based news network, not a foreign propaganda tool.
Why It Matters
Branding is important. People don’t see your network the way you do— you need to explain it to them. They have more choices than ever now and with fewer people than ever watching linear TV, you can’t count on them stumbling upon you while flipping through the program guide. You’ve got to stand for something.
What You Need To Do About It
Make sure you know what you stand for. Make sure your customers—both advertisers and viewers—know what you stand for and who you are. Ask them if you want to be sure. Don’t just rest on your laurels.
