29, 2014 12:02 a.m. ET
With applications, ESPN seeks to exploit the increased demand for online video. Jesse Neider for The Wall Street Journal
BRISTOL, Connecticut, United States-In the control room of the headquarters of ESPN, a row of screens showing video content of each of its television channels being sent to cable operators. But much of the future of the company is on the other side of the room, where a similar computer monitors Internet transmissions.
a recent Saturday, a group of technicians was playing dozens of games via streaming, some while they were broadcasting on television and others who were not even televising. Damon Phillips, the manager of the service, a tablet used to monitor how many people was seeing online.
“I’m obsessed with it,” he said, pointing to all users, who begins looking every day at 5:30 am.
application, called WatchESPN U.S. Play and ESPN in Latin America, is part of an ambitious bet sports network services online pay television as mature. ESPN was a pioneer in sports television in that environment for three decades and stable growth in subscriptions to cable and satellite TV. However, these seem to be shrinking U.S. (The trend is to expand in Latin America). The chain is now at the forefront of the efforts of the television industry to grow toward Internet distribution.
The chain says it has 44 million TV subscribers in Latin America, 22 million of whom access their Internet services.
The company, which generates 40% of operating earnings from its majority owner, Walt Disney Co. DIS -2.13% U.S.: NYSE $ 71.33 -1.55 -2.13% 29, 2014 4:01 pm Volume (Delayed 15m) 8.60m AFTER HOURS $ 71.40 +0.07 +0.10% Jan. 29, 2014 6:33 pm Volume (Delayed 15m) 7,755 P / E Ratio 20.86 Market Cap $ 127.53 Billion Dividend Yield 1.21% Rev. $ 257.377 per Employee 01/29/14 Oscar Academy Nominat Rescinds … 01/22/14 U.S. Panel Urges More Early Vo … 01/21/14 What a Caveman Can Teach You A.. . More details and news quote “ DIS in 
Your Value Your Change Short position , WatchESPN seen as a way to leverage the increased demand for online video. But since their TV deals are still very lucrative, is walking a tightrope, trying to avoid doing anything that would encourage customers to cancel cable TV subscriptions.
is a challenge that other companies in the business of pay-TV face. ESPN’s solution is to allow only people who are subscribed to channel payments to access the streaming of matches that are issued also on TV.
it has developed a complex business model. While the application is distributed via the Internet, ESPN raises money providers and satellite TV who pay for the right to offer the application to your customers. A second source of revenue for the chain is advertising on the online service.
WatchESPN app also includes a channel strictly on the web, called ESPN 3, which is also available on ESPN Play in Latin America. For U.S. signal, channel specializes in less popular sports such as rugby, polo and athletics at university level. ESPN 3 for Latin America offers parties the Champions League of Europe, Italian serie A football and the Indianapolis 500, among others. In most markets, users do not have to have a pay TV subscription.
This dual strategy is the result of years of experimentation and debate within ESPN, and within the industry in general, the best way to address the growing demand for online video and saturation of the pay TV industry . For example, HBO, Time Warner Inc., TWX -1.30% Time Warner Inc. U.S.: NYSE $ 62.32 -0.82 -1.30% Jan. 29, 2014 4:00 pm Volume (Delayed 15m) 7.56m AFTER HOURS $ 62.32 0.00 0.00% 29, 2014 4:29 pm Volume (Delayed 15m) 16,778 P / E Ratio 15.09 Market Cap $ 57.12 Billion Dividend Yield 1.85% Rev. $ 864.529 per Employee 01/28/14 After Leaving Amazon, Laurence … Corrections & Amplifications 01/15/14 01/15/14 Time Warner Nears Deal to Sell … More details and news quote “ TWX in Your Value Your Change Short position has been suggested that could offer a version of its HBO Go application to users for a fee, depending on the evolution of pay-TV, but for now plans to further limit access to those who already have a subscription to your TV channel.
Most owners of television time has concluded that the risks of cannibalizing their business by offering pay TV subscription services independent online are too big. It is not clear that they can charge a high enough price to be as profitable as agreements with cable providers.
mobile advertising rates are generally much lower than those of traditional television. Media companies also have to take responsibility of customer service that are now handled by the cable and satellite providers.
However, content providers such as ESPN face the reality that the number of households that pay for TV service has begun to decline in the U.S., analysts say. Between September 2011 and September 2013, ESPN lost about 1.5 million subscribers, according to Nielsen data supplied by the chain. The trend seems to be different in Latin America. According to market research firm Dataxi, the number of pay TV subscribers in the region will reach 98.32 million in the seven major Latin American markets, 3.6 times more subscribers in 2008.
ESPN President John Skipper, refers to the loss of subscribers in the U.S. “marginal” because the sports channel reaches 99.7 million households in the country. Still, do not underestimate the threat Skipper.
“The pressure on the system is a danger to ESPN”, said in an interview. “But as long as the system is not broken, ESPN is in a good position,” he added.
However, several obstacles stand in the way ESPN online. The professional sports leagues, which already collect large sums of money for broadcasting rights, see a great opportunity in the next decade to sell your digital picture or offer their own games via streaming services. So for ESPN, acquiring these rights is becoming increasingly expensive.
turn, is likely to pay television providers resist as ESPN raises its prices to offer WatchESPN. ESPN is the most expensive cable channel in the U.S.
addition, the decision of ESPN to limit online access to only pay TV subscribers, a strategy developed by the majority of owners of television networks, carries risks. Besides those who have unsubscribed television, also excludes those who have never subscribed to a paid service cable or satellite.
if pay TV operators spend their subscribers the rate it charges ESPN, that higher cost could cause more disconnections pay TV service. Some executives of American TV providers claim that the rise in prices is one of the main reasons why people cancel their services.
Skipper, who took the reins of ESPN in 2012, acknowledged that there is some “dissonance” between the instincts of ESPN to disseminate their content as widely as possible and use restrictions designed to protect your principal pay television business . “We are not denying that there is a certain element of protection and defense,” he said. But he said the company can not afford to risk the harvest huge profits with pay television.
That raises the question of what the long-term goal of ESPN. Skipper said the company plans to experiment a lot, but nothing that could reduce your earnings by pay TV. “Our estimate is that right now I’ll sail this,” he said. “We will insist on this as it makes sense.”
ESPN still has growth opportunities in TV, Skipper said, including an expansion in Latin America.
Claudia Sandoval-Gomez contributed to this article.
No comments:
Post a Comment