Twitter vs ESPN

[NEforceUConn]

All I want to do is type in some httl page and see my beloved UConn athletic teams. FB, MBB, WBB, MBB, MHockey, MSoccer, WSoccer, and WField hockey, hopefully through my ROKU or via laptop onto my big screen. I'll pay up to $25 a month. I'm not into IT, but that's what I will do. Now if I have to have a conference associated with this I need UConn game replay and I still will pay up to $25 a month. But I will watch live competitive conference games, like I use to in the BE (ie WVU vs UC, PC vs Georgetown) live.

 

[polycom]

I have a neighbor that is pretty high up on the chain IT chain at espn. He is responsible for the ticker you see on the TV screen as well as part of the team that developed the watchESPN app. He tells me they were completely caught with their pants around their ankles with regards to cord cutting. They are now tied to the rights fees to the leagues.

He says for years they focused on acquiring content and they are now focusing/trying to adjust on the fly on how to deliver content while monetizing that delivery. It is fascinating when i talk to him, ironically he watches very little sports and isnt much of a sports fan.

This 100%. I interviewed in finance at ESPN, and asked this specific question the person who was interviewing me essentially said these exact words. ( I didn't get the job)

 

[whaler11]

All I want to do is type in some httl page and see my beloved UConn athletic teams. FB, MBB, WBB, MBB, MHockey, MSoccer, WSoccer, and WField hockey, hopefully through my ROKU or via laptop onto my big screen. I'll pay up to $25 a month. I'm not into IT, but that's what I will do. Now if I have to have a conference associated with this I need UConn game replay and I still will pay up to $25 a month. But I will watch live competitive conference games, like I use to in the BE (ie WVU vs UC, PC vs Georgetown) live.

That seems totally realistic and you probably just set the market.

 

[noeynox]

Just watching them you can't come to any other conclusion that they underestimated how quickly things would change.

Simmons mentioned something on his podcast today I hadn't considered. They will leverage the MLBAM tech to roll out new channels - and then in the future bring the cable channels into the fold as the contracts change.

Yeah, there were some internal rumblings this day may come but they were in total denial. I havent seen my neighbor in a couple of months but its fascinating talkung to him. Non sports fan, cannot believe the rights fees they pay for COLLEGE games he says. He says he personally never thought the cord cutting would hit them as hard as it has and gets emotional over Friends of his that have been let go. I dont think he understands the business aspect of it as you and some other pósters but he knows IT and apps.

 

[SubbaBub]

Think Apple Store. You want to watch a game? $1.99, please.

Want to buy all of the week's NFL games? $10.99.

Want any NFL game any time? $129.99.

Repeat for SEC, B1G, and any other conference that can survive on its own. Everyone else is on ESPN or Fox app.

ESPN won't make $5 per cable subscriber, but they'll be close enough. If it's not sports, then it will be something else, gaming, MMA, whatever people are willing to pay to access.

 

[Chin Diesel]

I have four grandchildren 12-15 yrs old. What's remarkable to me (but now obvious to the TV networks) is that none of them has turned on a TV set to watch programming in months. They watch everything on their phones, iPads or laptops. They watch their favorite TV shows on those devices as well as play games etc. The only time the TV set is ever on is for a live sporting event. Now here's the thing. Twitter signed with the NFL to live stream 10 Thursday Night games. They paid $10M for the privilege. The reason they paid so little is they let the NFL keep much of the ad money on the games. They league already sold ad time of $50M. Its a cash cow for the league and a tremendous platform for Twitter which, if successful, can sell other ads on its own app site if it becomes a real player here. The first game is the Jets v Buffalo in early September. Fans will be able to watch on all devices---and here's the plus---without requiring any access codes--and they can live tweet at the same time, which seems to be a big draw for other shows. Twitter is also in negotiations to get on AppleTV. So here's the deal. If the first game is a Twitter success (the streaming video and sound are clear and uninterrupted) and the buzz about it goes viral...and if Twitter gets onto AppleTV..Katie bar the door. The cord cutting could really become massive---and so likely will the value of Twitter. Keep your eyes and ears peeled....and your stock broker on speed-dial. This entire new paradigm is why ESPN and FOX are looking hard at any new Big12 or other conference deal. We're truly in (or about to enter) a whole new world.

"For Twitter, the bet on live streaming is crucial to turning itself into a mainstream internet destination after other efforts have failed. Live streaming could finally broaden Twitter’s appeal, attracting an even wider audience. And perhaps more important, live events would be another way to sell video ads. If streaming football or basketball games on Twitter’s mobile apps and on desktop computers, along with other platforms, draws viewers, the company could sell more video ads, which typically command a premium.
Twitter has directed a former Goldman Sachs banker with deep ties to the sports media industry, to lead the charge on live streaming and has assigned an engineering team to create its streaming video player. Jack Dorsey, Twitter’s chief executive, considers streaming a critical component of the company’s focus on “live” experiences, along with Periscope, its app that allows smartphone users to live-stream video.
To bolster the effort, Twitter is in talks with Apple to bring the Twitter app to Apple TV, which would potentially let millions of Apple TV users watch the streaming NFL games, according to the two people briefed on the discussions.
Apple and Twitter declined to comment."

Twitter shares surge 7% on talk of Apple TV deal

Absolutely true with the younger generation. They don't watch television. They watch content on their mobile device. Must See TV is a dead concept.

 

[Chin Diesel]

All I want to do is type in some httl page and see my beloved UConn athletic teams. FB, MBB, WBB, MBB, MHockey, MSoccer, WSoccer, and WField hockey, hopefully through my ROKU or via laptop onto my big screen. I'll pay up to $25 a month. I'm not into IT, but that's what I will do. Now if I have to have a conference associated with this I need UConn game replay and I still will pay up to $25 a month. But I will watch live competitive conference games, like I use to in the BE (ie WVU vs UC, PC vs Georgetown) live.

Think Apple Store. You want to watch a game? $1.99, please.

Want to buy all of the week's NFL games? $10.99.

Want any NFL game any time? $129.99.

Repeat for SEC, B1G, and any other conference that can survive on its own. Everyone else is on ESPN or Fox app.

ESPN won't make $5 per cable subscriber, but they'll be close enough. If it's not sports, then it will be something else, gaming, MMA, whatever people are willing to pay to access.

That's definitely the way forward. It's not just TV that's dying it's the concept of having to "buy" a whole channel. With today's media devices you can pick and choose what parts of each channel you want. For sports fans that means paying a slight premium to watch your team and a smaller fee for a bundled package of league/conference games.

 

[SubbaBub]

There are something like 100M TV households in the US. ESPN makes I think $6/month for the family of networks or there about. That puts there current take at around 600M/mo, or 150M/wk. That's what they or someone else needs to take in to keep things like sports leagues flush with cash.

Except most of that goes for rights fees and producing filler programing of which there is a lot. So you can probably cut the 150 down a bit. You can include lesser live sporting events in that filler list. The AAC FB contract, or anything on ESPN U. I'm sure ESPN knows the rating number that makes money. But let's call it 1M viewers for the sake of argument.

Under the app store model, they would need the equivalent of 150M people to buy $0.99 events per month. Obviously they would need fewer downloads of premium priced events.

How many people that watch now would buy Michigan v. Ohio state at 0.99, 1.99, or 4.99? How many would buy their local teams games every week? The NFL could count on 10M easy. Times $2/wk is $20M. It's not $150M, but I'm lowballing it I think as most would buy, or be forced to buy the entire weekend. 10M x $10 is $100M/wk, much more likely and easy to cover the weekly nut.

I'm sure ESPN, or whomever, can cobble together enough viable events to keep the cash flowing.

 

[whaler11]

Well I guess that issue is solved.

Can you guys fix the music and publishing industries next?

 

[uconnfan68]

Affiliate fees are just what cable networks collect from the cable carriers for their subscriber base.

So as we move away from TV and into streaming. Who can generate enough revenue to pay a league or conference 9 or 10 figures annually without have the cable base of 70-90 million passive subscribers.


Here is the rub:

Let's say ESPN creates ESPN Now and you can stream all the networks for 19.99 a month.

They can't do this without renegotiating their contact language with every cable carrier in the country.

If you are TWC or Comcast - if ESPN is going direct why are you going to risk your subscriber base by passing along $8-$9 a month for the ESPN family of stations?

It's an extremely tricky model:

1. The capacity needed to deliver live HD broadcasts to a big audience is really expensive.
2. You now need an entire customer service model to handle billing and things like that - or you have to pay for it.
3. Obviously sports ebbs and flows - people are going to drop in and out constantly based on what they are fans of.

And the really difficult part: How can you possibly price it where you can generate the revenue you get now?

19.99/24.99 a month? Doesn't get you anywhere near the revenue you need. 39.99? You can't get anywhere near the amount of subs that you need.

Sports contracts are based on the revenue generated by 50-60 million cable subs who never watch sports. I really don't see anyway they can be sustained without someone figuring out a way to monetize non-viewers the same way they are today - and I have no idea how that would even be possible.

Who know maybe VR technology is amazing 10 years ago and people
are willing to pay thousands to see the game from inside Tom Brady's helmet. I get how fast techonology moves - but I also think there is som risk that a lot of leagues and teams think they are sitting on future revenue that is never going to materialize because networks are going to go belly up.

If 30 million cable subs disappear in the next 5 years and the carriers tell stations like YES to go pound sand how do they make the rights payments?

Separate issue but I don't get the impression that people under 30 have as much passion for sports as people over 30 and as the boomers die off it's going to be even harder to monetize people. Throw in that the sports landscape is getting even more fractured outside of the NBA and NFL.... I certainly wouldn't bet on the television contracts in say 2021 being higher than today.

Nice post. Last paragraph dead on.

 

[mavblues]

All I want to do is type in some httl page and see my beloved UConn athletic teams. FB, MBB, WBB, MBB, MHockey, MSoccer, WSoccer, and WField hockey, hopefully through my ROKU or via laptop onto my big screen. I'll pay up to $25 a month. I'm not into IT, but that's what I will do. Now if I have to have a conference associated with this I need UConn game replay and I still will pay up to $25 a month. But I will watch live competitive conference games, like I use to in the BE (ie WVU vs UC, PC vs Georgetown) live.

That's how I watch my son play his games (mid sized D-1 school). Works fine, and for his school it's free. 3 camera shoot, good announcer.

 

[Stinger92860]

There are something like 100M TV households in the US. ESPN makes I think $6/month for the family of networks or there about. That puts there current take at around 600M/mo, or 150M/wk. That's what they or someone else needs to take in to keep things like sports leagues flush with cash.

Except most of that goes for rights fees and producing filler programing of which there is a lot. So you can probably cut the 150 down a bit. You can include lesser live sporting events in that filler list. The AAC FB contract, or anything on ESPN U. I'm sure ESPN knows the rating number that makes money. But let's call it 1M viewers for the sake of argument.

Under the app store model, they would need the equivalent of 150M people to buy $0.99 events per month. Obviously they would need fewer downloads of premium priced events.

How many people that watch now would buy Michigan v. Ohio state at 0.99, 1.99, or 4.99? How many would buy their local teams games every week? The NFL could count on 10M easy. Times $2/wk is $20M. It's not $150M, but I'm lowballing it I think as most would buy, or be forced to buy the entire weekend. 10M x $10 is $100M/wk, much more likely and easy to cover the weekly nut.

I'm sure ESPN, or whomever, can cobble together enough viable events to keep the cash flowing.

You need to add in advertising money.

 

[HuskyBandDad]

I have a neighbor that is pretty high up on the chain IT chain at espn. He is responsible for the ticker you see on the TV screen as well as part of the team that developed the watchESPN app. He tells me they were completely caught with their pants around their ankles with regards to cord cutting. They are now tied to the rights fees to the leagues.

He says for years they focused on acquiring content and they are now focusing/trying to adjust on the fly on how to deliver content while monetizing that delivery. It is fascinating when i talk to him, ironically he watches very little sports and isnt much of a sports fan.

So he is the guy that has ruined TV sports watching. I want his name and phone number. I hate that stupid ticker when I am watching sports.

 

[jfuchs91]

Revisiting this topic, Twitter shares are up over 20% this morning following its second NFL live stream last night. There are also rumors that Google is looking to acquire Twitter, at least partly due to its streaming success.

The quality of Twitter's streams were amazing. Watching from my phone, the broadcast was seamless and had the highest-quality display I've ever seen on a mobile device. From a computer, there was a section showing live tweets about the event next to the broadcast itself, which heightened the viewing experience for me.

In my opinion, it felt like a natural progression of where media is going. Fantastic quality, ingrained with social media, and able to reach anyone with a smartphone.

The first presidential debate will also be streamed via Twitter on Monday. I suggest people check it out and see for themselves.

Streaming a game versus producing its content are two entirely different things. And in that sense, a company like ESPN will still be around for a long time. But to me, Twitter's success has further cemented that we're rapidly moving away from the Cable TV era. Sports media deals are going to look drastically different come 2025.

 

[Adios]

Live streaming sites are definitely a vision of the future. Damn pop ups are torture.

Can chat while watching.

 

[Fishy]

Twitter stock is up today because management is finally ready to admit they can't figure out how to make any money.

 

[sportsart]

Revisiting this topic, Twitter shares are up over 20% this morning following its second NFL live stream last night. There are also rumors that Google is looking to acquire Twitter, at least partly due to its streaming success.

The quality of Twitter's streams were amazing. Watching from my phone, the broadcast was seamless and had the highest-quality display I've ever seen on a mobile device. From a computer, there was a section showing live tweets about the event next to the broadcast itself, which heightened the viewing experience for me.

In my opinion, it felt like a natural progression of where media is going. Fantastic quality, ingrained with social media, and able to reach anyone with a smartphone.

The first presidential debate will also be streamed via Twitter on Monday. I suggest people check it out and see for themselves.

Streaming a game versus producing its content are two entirely different things. And in that sense, a company like ESPN will still be around for a long time. But to me, Twitter's success has further cemented that we're rapidly moving away from the Cable TV era. Sports media deals are going to look drastically different come 2025.

Help me out here. Isn't watching a sporting event via Twitter just like watching a game on ESPN3 with a large boneyard chat room streaming next to it?

 

[D/$$$]

Twitter stock is up today because management is finally ready to admit they can't figure out how to make any money.

You are correct, Fishy. But....their future parent WILL figure it out. They might just be a player in UCONN's future negotiations.

 

[HuskyHawk]

Help me out here. Isn't watching a sporting event via Twitter just like watching a game on ESPN3 with a large boneyard chat room streaming next to it?

Yes, except that Twitter has no cameramen, no announcers, no production capabilities of any kind. As such, they stream the feed from someone who does have those capabilities. And that media production company is the one who sells the advertising time in the broadcast. Not Twitter. Twitter can only attempt to monetize the extra traffic to its site. Do you guys buy a lot of stuff advertised on Twitter? I didn't think so.

Netflix and Amazon could pull this off because they could create full production capabilities (Google if they wanted to invest in it). But that would cost them a lot of money. So far, what we see instead is that they stream stuff produced by somebody else, often overseas. Streaming something like rugby matches broadcast overseas could be a winner for them. There's an audience for it here that can't get it, and the cost is minimal since it is purely incremental revenue to the owner of the broadcast.

Anyone who thinks that streaming will just eliminate broadcast or cable any time soon is nuts. The costs they'd incur to produce these programs themselves would sink them immediately.

 

[sportsart]

Yes, except that Twitter has no cameramen, no announcers, no production capabilities of any kind. As such, they stream the feed from someone who does have those capabilities.

I'm picturing Joe D and Gresh doing a FaceTime feed on their iPhone streaming the UConn vs SU game back to Twitter, calling the game, while we watch. Yes?

 

[HuskyHawk]

I'm picturing Joe D and Gresh doing a FaceTime feed on their iPhone streaming the UConn vs SU game back to Twitter, calling the game, while we watch. Yes?

??? They buy and stream whatever feed is being shown on cable or TV. It isn't theirs, they can't alter it in any way, as it is copyrighted. They merely pay for the right to rebroadcast it, just as some venues may pay to rebroadcast a pay per view title fight.

 

[sportsart]

??? They buy and stream whatever feed is being shown on cable or TV. It isn't theirs, they can't alter it in any way, as it is copyrighted. They merely pay for the right to rebroadcast it, just as some venues may pay to rebroadcast a pay per view title fight.

So in other words, there will always be a need for an ESPN/Fox/CBS type feed? If that's the case, all of this talk about sporting events being streamed online is really just an extension of the networks.

It really is like ESPN3 with a boneyard chat next to it.

 

[HuskyHawk]

So in other words, there will always be a need for an ESPN/Fox/CBS type feed? If that's the case, all of this talk about sporting events being streamed online is really just an extension of the networks.

It really is like ESPN3 with a boneyard chat next to it.

Yes, exactly except that ESPN owns ESPN3, so can do more than Twitter can. Netflix or Amazon could do it...Google too, if they wanted to: (a) bid for the rights; (b) hire a staff of on air talent; (c) hire production and technical talent and (d) buy a ton of equipment to film and transmit those broadcasts live from those locations. Even then, they'd also need more studio equipment and talent to create anything but dead-space in the small advertising windows and during halftime or pre-game. Then people to sell the ad space to advertisers. Now multiply that by the number of college football games each Saturday, or NFL on Sunday or baseball, basketball or hockey every day. Then add the costs of travel for those people and the gear.

Anyone who thinks that streaming stuff will somehow make it free or cheap compared to cable flunks basic math.

 

[D/$$$]

??? They buy and stream whatever feed is being shown on cable or TV. It isn't theirs, they can't alter it in any way, as it is copyrighted. They merely pay for the right to rebroadcast it, just as some venues may pay to rebroadcast a pay per view title fight.

Yes, but the cable providers are/will experience much less revenues from less users. They will gladly pay twitter (and others) to feed games of regional interest. If twitter/google for example figure out how to create an interactive experience that can be monetized, it'll work.

 

[jfuchs91]

Yes, exactly except that ESPN owns ESPN3, so can do more than Twitter can. Netflix or Amazon could do it...Google too, if they wanted to: (a) bid for the rights; (b) hire a staff of on air talent; (c) hire production and technical talent and (d) buy a ton of equipment to film and transmit those broadcasts live from those locations. Even then, they'd also need more studio equipment and talent to create anything but dead-space in the small advertising windows and during halftime or pre-game. Then people to sell the ad space to advertisers. Now multiply that by the number of college football games each Saturday, or NFL on Sunday or baseball, basketball or hockey every day. Then add the costs of travel for those people and the gear.

Anyone who thinks that streaming stuff will somehow make it free or cheap compared to cable flunks basic math.

You're correct that present-day sports broadcasting is an expensive business. But you'd be foolish to ignore this basic math:

ESPN's subscriber fee hovers around $7/month. They've lost over 11 million subscribers since 2011, including 2.2 million since February.

Viewers - especially millenials - are rapidly moving away from traditional cable TV, and ESPN is cutting expenses to compensate. They've already laid off hundreds of tenured employees, and are utilizing cost-saving methods in their broadcasts, such as having announcers call games from a remote location.

The days of relying on non-sports-fan-cable-subscribers to subsidize sports broadcasting are dwindling. Networks need new ways to monetize viewers, and streaming is the future.

This thread isn't so much about Twitter or another streaming service overtaking ESPN or eliminating cable altogether. Instead, it's a discussion about how the changing landscape of broadcasting will cut into ESPN's marketshare, and how that will impact future sports media negotiations.