ESPN is cautiously broadening its digital streaming efforts, even as it moves to protect its core pay-television business, company executives told The Wall Street Journal on Monday.
How successfully ESPN pulls off that balancing act could dictate the direction that other cablers take as they try to navigate a landscape peppered with increasing numbers of cord-cutters and cord-nevers.
The network’s WatchESPN app is the focus of their digital efforts, and a central part of their pitch for higher fees from cable providers. ESPN is already the most expensive cable network to broadcast, costing operators a little more than $5.50 per month.
The WatchESPN app—which allows pay-tv subscribers to stream some games that are also broadcast on television—is billed as a value-added service by the network. It currently has been downloaded 25 million times. The television network reaches 98.4 million households.
ESPN is not actively advertising the fact that non-subscribers actually have access to one feature of the app—the ESPN 3 service, an online-only channel that streams less popular sports, leagues and matches.
But the Journal notes that “the company is careful not to market it as a product for cord-cutters.”
ESPN President John Skipper acknowledged that the company is considering a standalone digital product that wouldn’t require a television subscription, but such an offering is still a long way’s off. Many networks with streaming apps, such as HBO (HBO GO) and FX (FXNOW) are reluctant to offer digital-only subscriptions, out of fear that they would encourage even more people to cut the cord. Such a movement would weaken the TV business’ bottom line even further, since mobile and online advertising rates have not yet approached levels that are even in the same ballpark as broadcast.
For the moment, ESPN is planning to “ride” their current balancing strategy and prioritize protecting their TV business, while continuing to experiment in the digital space.
Read More: The Wall Street Journal, GigaOM
Brief Take: As one of the most lucrative network’s on the channel guide, ESPN’s success or failure as it balances expanded digital offerings with traditional pay-TV subscriptions will dictate how other cablers in a rapidly evolving industry respond.
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