Is Sports Viewership Struggling?

ESPN has fired 300 people, and most of their content is now unavailable on YouTube. Is this a sign of ailing sports viewership? (Dabarti CGI/Shutterstock)

ESPN has fired 300 people, and most of their content is now unavailable on YouTube. Is this a sign of ailing sports viewership? (Dabarti CGI/Shutterstock)

We’ve talked before about sports betting demographics, but we haven’t actually talked much about sports viewership. The two subjects may seem intricately related, but they technically aren’t. After all, not all sports bettors actually take the time to watch the games. Some avoid them out of superstition, while others just find it too suspenseful to watch a game in which they are financially invested. But sports viewership is still important. Networks aren’t inclined to air a program without ratings, which means that floundering viewership could actually have an impact on those of us who watch the games religiously.

In college football, the networks control the schedule. And depending on your team of choice, you may have struggled to find a game or two on TV this season. Even if you haven’t, it’s likely to happen at one point or another if ratings begin to face any kind of significant struggle. And if you actually work for a sports network, then recent changes in viewership trends may have actually put you out of a job. We won’t be looking at actual demographics for the most part, but we’d still like to explore recent trends in sports viewership and the effect they may be having on the industry.

Why ESPN Is Losing Jobs

ESPN is the primary network responsible for current conversations regarding sports viewership. (Dan Scott/American Image Gallery)

ESPN is the primary network responsible for current conversations regarding sports viewership. (Dan Scott/American Image Gallery)

The issue of sports viewership came to the forefront recently when ESPN announced that somewhere around three hundred of their employees would be losing their jobs. Their president, John Skipper, outlined the decision in a semi-cryptic letter sent out to his employees this past Wednesday. By all appearances, he seemed to be blaming the decision on shifting trends in sports viewership. “The demand for sports remains undiminished,” he wrote, “though the landscape we operate in has never been more complex.”

While Skipper may not have been too specific in outlining his reasons for the layoffs, it isn’t too difficult to put two and two together. Online streaming is reaching peak popularity these days, and the result is that many subscribers to cable and satellite services are beginning to cut the cord. This practice (which is literally referred to as “cord-cutting”) has grown especially popular over recent years due to carriage disputes between networks and programming distributors. The most recent was just this past August, when about five million Dish customers lost channels for a brief period of time this in what was technically the largest TV blackout ever.

These disputes may seem as if they inconvenience the customers more than anyone, but networks and service carriers actually lose quite a bit from these disputes as well. Back in January, a short dispute between Dish and Fox resulted in Dish losing an estimated 90,000 subscribers. Meanwhile, Fox News dropped 12% in ratings that week, and a little over 30% the week after. Two years ago, Time Warner Cable had a month-long battle with CBS, one of only four networks with NFL broadcasting rights. When the dust had settled, Time Warner had lost 306,000 subscribers.

In light of these carriage disputes, it isn’t too surprising that people are cutting off their cable and satellite service. Subscribers pay a fair amount of money for their service, usually to get a package that includes numerous channels that they don’t even want. When the channels they care about are taken away from them without compensation, they tend to get a little peeved. After all, it doesn’t matter who wins these petty financial disputes. The subscriber won’t see a dime of that, so why should they have to suffer?

These disputes introduced many subscribers to the wonderful world of online streaming. And no matter how much the networks tried to block that from happening, we imagine the result was simply that a few subscribers were then introduced to the wacky world of illegal piracy. But really, these carriage disputes were only a small part of that. Our world is becoming increasingly web-oriented, and streaming enables people to keep an eye on the game from their phone or tablet while they’re on the go. Now that people don’t have to sit around at home and hope their cable doesn’t go out (or that it doesn’t rain, if you own a dish), they’re realizing that it’s actually possible to binge on TV and still live an unfettered lifestyle. That’s changed the game for companies like ESPN.

And that brings us back to the main issue: Why is ESPN losing jobs? They may employ about eight thousand people, but this is the second time they’ve had a layoff this big. They’ve lost around 7.1 million subscribers over the last two years, and in the past few months alone they’ve lost columnists, television hosts, and radio personalities. Even launching the unique new race-related website The Undefeated seems to be a massive struggle for them. According to Skipper, the main goal now is to begin “integrating emerging technology into all aspects of our business” while “enhancing our sales and marketing efforts with new tools and techniques” for the purpose of “integrating our distribution efforts to better serve current and future distribution partners.”

In layman’s terms, TV’s out and streaming is in. ESPN is adjusting their primary focus toward web-based services, not because they love technology but because there’s more money in it.

We’re not sure why you couldn’t just say that, Skip. We get it. Money’s great. Just ask the people you fired. They used to love having money. Not that it’s your fault. In fact, the winds have been blowing in this direction for quite some time….

Trends in Sports Viewership

The ratings for Monday Night Football are one of the biggest indicators that sports viewership may be headed for a slight drop-off at some point in the future. (Andrew Weber/USA Today Sports)

The ratings for Monday Night Football are one of the biggest indicators that sports viewership may be headed for a slight drop-off at some point in the future. (Andrew Weber/USA Today Sports)

Viewership for most sports has been dying steadily for the past couple of years. Of course, it’s affected some sports more than others. Of the fifty most-watched sporting events of 2013, there were forty-six NFL games, two NBA games, and one game each in NCAA basketball and football. Baseball and hockey did not even make the list, although the 2013 World Series came close. While every highly watched game outside of the NFL was part of a championship or title series, thirty-five of the fifty highest-rated games were simply regular season match-ups. In this light, it may seem as if football is the one sport immune to the pandemic of faltering sports viewership that appears to be gripping the nation.

But as it turns out, that might be changing as well. Last year, Monday Night Football on ESPN was the most-watched show on cable, doing particularly well with demographics aged 18 to 49. This stands to reason, since live streaming has taken some time to get off the ground. Back when Hulu and Netflix were the primary sources of streaming, live shows like Monday Night Football really stood out. People were fine with waiting until the next day to watch shows like Glee or Parks and Rec on Hulu. Some people who didn’t have Hulu were even fine with waiting between a month and a year to watch the most recent season of Archer on Netflix. But live shows felt like real events, so they couldn’t wait. The only non-live shows we wouldn’t wait for were the ones we really, really cared about. And with TV becoming so saturated with programming nowadays, those shows were becoming few and far between.

Now, live shows seem to be taking a hit. Neil Patrick Harris is struggling with Best Time Ever, which has been dropping in ratings somewhat steadily since its premiere. Only about a quarter of its ratings are in the 18-49 demographic, which is particularly worrisome. But that’s a new show that still seems to be working out its formula. Something like Monday Night Football probably wouldn’t have that problem, right? This is sports we’re talking about. It’s not like viewers don’t know what they’re getting into. Watching sports is like an American tradition. Sports viewership should be bulletproof. Right?!

Wrong. (Admit it, you knew were that was going.) The first sign that ESPN’s live programming might not be as bulletproof as we had thought was actually back in February, when Monday Night Football was completely overshadowed by the midseason premiere of The Walking Dead. Some were hesitant to call this a trend, but The Walking Dead has had significantly more highly rated telecasts in the past few years than Monday Night Football, especially in the ever-so-important 18-49 demo. ESPN still commands some of the largest cable audiences of all time, but the younger demos are the ones which ultimately dictate the direction in which the trends are moving. Without them, ESPN’s televised programming could be in serious trouble.

The saddest part is that, much like Neil Patrick Harris, ESPN can’t seem to find a gimmick to boost their ratings. Their ratings aren’t bad, per se, but it’s clear that any gimmick they utilize in order to raise them will only succeed to a limited extent. This was demonstrated by the launch of the new Star Wars trailer during Monday Night Football this week. The trailer itself had a rating of 11.7, but the average rating for Monday Night Football as a whole was only 9.6 (indicating that, without the trailer, the average would have been much lower). For those who don’t know, a Nielsen rating of 9.6 indicates that 9.6% of the approximate total number of TV-owning households were watching the broadcast. This is pretty darn good, and the show is still on top of both cable and sports viewership for the most part. But between Star Wars and The Walking Dead, we have to wonder if it might not be pretty easy for Monday Night Football to be usurped.

Basically, what we’ve got here is a situation in which a great number of people are no longer subscribing to cable or satellite, while many subscribers are simply finding their interest in sports to be a bit shaky. People will watch football if it’s on, but they have no problem switching the channel. And since they can stream most games on their phones or tablets, it’s easy for them to multi-task. In a world where you can watch The Walking Dead on your television while streaming the game on your Surface Pro (allowing you to mute out the commentary and just focus on the score), there’s simply no motivation to give the games your full attention unless you truly care about the teams involved.

Some people think that television is headed the way of print media, simply treading water and gasping for air while subscribers turn more and more attention toward the internet. We aren’t sure about that one. But between carriage disputes over the cost of retransmission fees, consumer apathy toward most of the ten thousand channels we pay for (and almost never watch), and an economy that makes cable bills something of an inconvenience, it isn’t too hard to imagine an increasing number of viewers cutting the cord.

What This Means for Networks

With the currently shifting trends in sports viewing, networks are likely going to favor those who prefer to get their content online. (Piksel/Kate Stevens/Shutterstock)

With the currently shifting trends in sports viewing, networks are likely going to favor those who prefer to get their content online. (Piksel/Kate Stevens/Shutterstock)

The broadcasting industry is basically forced to react to these changing trends in sports viewership, or else risk losing profits as these trends tighten their grip on the American public. When John Skipper says that ESPN plans to adjust their focus toward “emerging technology,” it seems likely that the plan is for ESPN to put a larger emphasis on streaming. The new distribution partners he mentions are likely partners operating in the field of web-based content. So from a technical standpoint, ESPN isn’t giving up on sports viewership. If anything, they’re ahead of the curve. Despite still being top dogs in the industry, they’d rather steer into the skid than fight against it and risk losing control.

ESPN’s business should be safe while they undergo this transition. Since there’s no telling how long it may take for them to overhaul their business model, this is a good thing. The cuts they’ve made to about 4% of their workforce have not injured Disney’s stocks, so ESPN is in no danger of a smiting from the mouse-eared gods who control their network. The only real question that remains is how they can adjust to the changing times. They certainly have an advantage in the sense that they are making these adjustments while things are still going well for them, but there’s still a lot of pressure facing them right now. As the leaders in sports viewership across the nation (and possibly the world), their attempt at going digital will inform pretty much every other sports network that wishes to make a similar change.

There are still some questions regarding ESPN’s overall plan. For instance, certain content that has always been available online is now less available than ever. After YouTube revealed their new subscription plan, YouTube Red, almost all of ESPN’s content was taken off of the site. This sounds bad for a company that intends to focus more on web-based content, but it actually might be smart for them to pull away from YouTube right now. While those who make money off of YouTube are no longer allowed to host content on the site without signing up for YouTube Red (indicating that ESPN might actually not be responsible for the blackout on their channels), this means that anyone who wants to view such content is required to view it through ESPN’s own video player. If ESPN can get their viewers to visit their own site rather than YouTube, they will strengthen their hold on this particular facet of their business. In addition, they will potentially raise their value in the eyes of their ad partners if they are able to increase their rate of site visitors.

Sports viewership is certainly shifting mediums at the moment, but ESPN has a real chance to set the bar. If they can vertically integrate the majority of their content by cutting third-party sites like YouTube out of the picture, while simultaneously shifting their focus toward online streaming, then they have potential to gain major ad revenue in addition to new distribution partners. In much the same way that most print publications now offer the majority of their content online, ESPN can easily start gaining most of their sports viewership through web-based content rather than televised broadcasts.

In short, sports viewership is far from struggling. As long as networks such as ESPN keep looking toward the future, everything should work out just fine. And if they archive their streams and make games available for a few days after initial broadcast, then they may even help cut down on piracy while gaining more clicks for their site. The medium for sports viewership may be changing, but the future for both networks and their viewers is potentially looking brighter than ever.