(Guest Post by Matthew Ladner)
For the last view decades ESPN has bestrode sports and cable television like a colossus. With the advent of DVR technology, live sporting events stood out as something that people still watch live (along with those lucrative commercials) whereas most other things people tape and skip over the ads. ESPN throwing giant bales of money at college sports in order to secure such live programming has been the background music of the college football missle crisis as conferences jockeyed for position and market share and network dollars.
Now the entire business model has come under question. The problem is that while the people who aren’t cutting the cable cord may be doing it because of sports (guilty as charged here) lots of other people have decided to cut the cord. Those people used to pay for ESPN even if they didn’t watch it. ESPN charges cable companies hefty fees to include their channels on basic cable. With the advent of streaming services, an increasing number of people have decided not to pay for any channels at all. Meanwhile, ESPN is on the hook for some very large long-term contracts and the Disney mother-ship has begun to force cost cutting on the former jewel of their broadcasting crown.
Anyway all of this is just a prelude to an interesting quote from an AEI blog post on this subject:
“Destruction will come slowly. Academics have noted that disruptive cycles take place over periods of 15-30 years. Even if those cycles are faster than ever with the ever-falling costs of distributing information, educating the public about new ideas, and producing innovative products, it will still be a number of years before we see meaningful change. In the short term, it might appear that everything is stable in Hollywood. The key is to remember that no industry is invulnerable to disruption. Barriers to entry be damned. Innovation always finds a way to drive cost down and bring people into the market. Some industries are harder to penetrate than others, but change is inevitable. Even in television, ‘winter is coming.’”