ESPN in 2015

ESPN in 2015
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ESPN in 2015
ESPN is a global satellite and cable sports television channel. The channel is operated in New York, Miami, Charlotte, and Seattle. It is one of the leading sport media brands which provides brands in distribution and advertisement of sports. The mission of the company is “To serve sports fans wherever sports are watched, listened to, discussed, debated, read about or played.” The company is dedicated on improving its brand to ensure that it has a competitive advantage over its competitors. For example, Roger Werener started emphasized the importance of the brand when he was the president in 1988 (Pierce, 2015). Other presidents such as Bodenheimer and Bornstein also continued stressing the need for maintaining the quality brand in the subsequent years. They claimed that sports fan should be given an opportunity to give their opinions on the sports news that are presented by the channel. Furthermore, the company has established ideal match ups which help create games thus optimize viewership. Therefore the company was able to convince their viewers to start viewing games on Monday night rather than Saturday afternoon. The fans give the company a competitive advantage over their competitors because they are always involved in the decision making of the company. Additionally, improved quality of the brand allows the company to gain more customers. The quality brand helps ESPN to develop partnerships with other companies thus increase its revenue.

In the early 1980s, ESPN realized that its only source of revenue was advertising while its cost sources included affiliate fee, programming cost and off camera cost. Therefore it adopted a business model which was common in the ABC, NBC and CBS networks. Werner proposed a new model that would require the viewers to pay for the network. The company would, therefore, use the revenue generated from the customers to improve their breadth and quality of their contents. Improvement of the contents would help attract more viewers to the channel thus obtaining higher revenues (Pierce, 2015). In 1983, the channel started by charging the viewers $0.05 per month as the subscription fee. The subscription fee increased rapidly first to $0.20 and then $0.70 per month at the end of the decade. With the increased revenue, ESPN was able to improve their contents. Moreover, the channel was able to supplement their films through the use of complementary materials on its radio network, website, and magazines. Due to the change by ESPN, the cable industry became a profit-motivated business. Each channel started charging the subscription fee to increase their revenues.
Despite having a significant expansion, ESPN has encountered several challenges. They include cord cutting, bundling among others. I think the biggest threat is the rise of disruptive competitors. They include the social media like Twitter, Facebook, Instagram and streaming video services. The social media has made it easier for people to obtain breaking news that relates to their favorite teams and players (Pierce, 2015). Thus, they do not need to watch news from the ESPN channel. Individuals do not need to wait until evening to watch the spot news because social media can be used at any place. ESPN was unable to drive its viewership as a result of the streaming video services which view pirated and legal sports news. As a result of the high competition, ESPN lost many clients who initially watched their news. ESPN has the opportunity of diversifying its business. Since the company operates in Television and broadcasting of sports, leagues, and marketing, the company can diversify in the infotainment industry. By this, the company can be able to venture into online spaces with a new genre of cable networks which help the firm compete effectively. Moreover, the company has the opportunity of increasing the coverage of various sports. It can consider creating a niche which will make it have a competitive advantage over their competitors. Furthermore, the company faces the threat of cord cutting. The cord cutters refer to clients who cancel their cable transactions at the expense of the internet. They often see less need of using the cable because news is only viewable at particular times. This is a threat to the company because it highly depends on the revenue from the cable package subscribers to make a profit. Cord cutting will, therefore, lead to increase of the subscription fee thus making it unaffordable to the customers.
ESPN should be flexible to the changing technology. For instance, the channel should be able to develop an app which helps customers to get sports updates. The app should be installable on the smartphones, tablets, and computers thus increasing the number of customers. Moreover, ESPN should be able to create partnerships with the technology companies to help access more customers. The channel can be able to form a partnership with technology companies because of its brand’s strength and the quality of their contents (Vogan, 2012). The companies would help the channel to develop a mobile platform that reaches millions of fans. Technology will help ESPN resolve the issues of individualization and maximize the experience of the user and consumption process. Through this, ESPN will be able to increase their viewers and as a result, increase their revenue.
References
Pierce, D. (2015). Inside the studio where ESPN is betting billions on the future of sports. The Verge. Retrieved 22 January 2018, from http://www.theverge.com/2015/1/28/7878051/espnSportsCenter-studio-and-the-future-of-sports-tv,
Vogan, T. (2012). ESPN Films and the Construction of Prestige in Contemporary Sports Television. International Journal of Sport Communication, 5(2), 137-152. http://dx.doi.org/10.1123/ijsc.5.2.137