Chapter 1154 Targeting ESPN

Yang Cheng has always been watching people order dishes. Note that this sentence is not derogatory, but means that Yang Cheng will decide how to treat the other party according to the character of the other party.

For a gentleman like Robert Iger, he doesn't mind revealing some business secrets to show his sincerity.

Faced with Yang Cheng's sincerity, Robert Iger said, "But Disney also has comprehensive sports resources, and ESPN also needs Fox Sports' resources to supplement."

Yang Cheng smiled, "Robert, you can't deny that although Disney is one of the greatest film companies in the world, no matter how brilliant its performance is, it can't cover up the embarrassment of ESPN's steady decline, and it has even reached a crisis point for Disney's stock price." point."

Iger said bluntly, "That's why we need the addition of Fox Sports to make up for the lack of ESPN."

Yang Cheng shook his head, and resolutely denied, "You are wrong Robert, although I am sorry, but I paid a high price for an ESPN investigation report.

The report shows that the performance of ESPN, which is the main source of Disney’s revenue, has continued to decline in recent years. The revenue of the cable TV network business fell by 6.8% to US$3.96 billion; operating profit fell by 13% to US$1.45 billion. "

Iger still refused to let go, "However, the reality is that we still make money, and the money is not too small. I am personally very satisfied."

Yang Cheng didn't answer, and said self-consciously, "In 1995, Disney bought ABC TV station at a sky-high price of 19 billion U.S. dollars, and ESPN, a subsidiary of ABC that broadcasts sports programs 24 hours a day, also became part of Disney's pocket.

In the past, ESPN was the only leader in cable television. I still remember a classic slogan, "Watch the game, find ESPN". It was once the voice of American sports fans, and it was also my voice. ESPN purchased the copyright of almost all popular sports events in the United States. Including the NBA, NFL, MLB, etc., they once contributed 70% of Disney's revenue in their heyday.

However, in the past few years, ESPN has been plagued by user decline, and the most profitable department has begun to weaken. This is an indisputable fact.

ESPN had 99 million subscribers in 2013, but last year it had 92 million subscribers. Even though this mere 7 million subscribers is not worth mentioning in front of the huge number of nearly 100 million, the loss of these 7 million subscribers means the loss of hundreds of millions of subscribers Subscription revenue.

If this trend continues, the situation will get worse and worse.

Falling below the 90 million mark is already visible to the naked eye.

While subscriptions are damaged, ESPN still has to pay high copyright broadcast fees. I roughly estimate that ESPN will spend more than 7 billion US dollars on copyrights. Calculated based on the subscription fee of 7 US dollars per month per user, one year It is $84. If the number of users falls below 90 million, subscription revenue will reach $7 billion. Adding advertising revenue, the total revenue can barely cover all expenses, but the scale of profitability is already very limited. , don't forget, your subscribers are still declining, what about next year? What about the year after? "

Robert Iger shook his head, "What you said is true, but this is not a reason to convince me to give up Fox Sports."

Yang Cheng raised her index finger, "No, Robert, not only do I want to persuade you to give up the Fox Sports competition, but I also want to persuade you to give up ESPN."

Iger was taken aback, "What? You want to buy ESPN?"

Yang Cheng spread out her hands,

"If you agree, why not?"

Paused, took a sip of the cold coffee, and analyzed again, "In the past five years, the average price of American cable TV subscriptions has increased by nearly 40%, and the proportion of American households with cable TV has dropped from 87% five years ago to 82%.

What does this mean? This shows that American consumption patterns are changing.

With the rise of limited TV fees and the emergence of streaming media, more Americans will choose streaming media with a wider range of content, relatively fewer advertisements, and cheaper prices to watch videos, such as Netflix and Amazon.

Take Amazon as an example. Users only need to pay $99 a year, which can not only enjoy the free two-day delivery service of the website, but also get free access to Amazon's Prime Video to watch video games.

There is also Netflix, users only need to pay $7.99 per month to watch massive videos, including movies, TV series, sports events and so on.

Users are always the smartest. Since the subscription fees of TV and streaming media are almost the same, why not choose streaming media with more types of videos and fewer advertisements?

Moreover, in addition to the impact of streaming media, ESPN also needs to bear the main responsibility for its own decline.

The old business model made ESPN difficult.

ESPN only broadcasts sports content, and uses high copyright fees as a threshold to prevent other media from poaching its content resources, and most of its revenue depends on user subscription fees. This business model is very fragile. Once the number of users declines, not only subscriptions Fees will drop sharply, and advertisers will withdraw one after another. The sports empire created by ESPN may collapse at any time. "

Robert Iger fell into deep contemplation. Regardless of whether what Yang Cheng said was true or not, at least it sounded like the essence of the problem. This was enough to make Iger more vigilant. Besides, Yang Cheng was not an ordinary person. His analytical logic was worth pondering for anyone of.

Yang Cheng didn't stop because of Iger's thinking, "Should I consider changing the model where all content needs to be paid?

Nowadays, in addition to some streaming media, many cable TV NBC and CBS have begun to broadcast some events on free channels, such as MLB, Olympic Games, tennis tournament and so on.

ESPN is one of the few TV stations that puts all major sports on premium channels.

Users only want to watch the NFL, but they need to pay high prices for other games broadcast by ESPN. These games are likely to be free on other platforms. Can users be psychologically balanced?

Anyway, if it were me, I would feel uncomfortable, even if these expenses are nothing in my eyes. "

Iger sighed, "Maybe you're right."

Yang Cheng immediately raised his hand, "I haven't finished yet. In addition, ESPN adopts the linear distribution mode of traditional TV and broadcasts programs according to a fixed schedule. For example, ESPN only broadcasts an NFL game on Monday night, but for For some game fans, just one fixed broadcast cannot meet their needs. They spend so much money in exchange for an experience that is not cost-effective. No one wants to be taken advantage of by fraud.

They can switch to other channels or streaming media to watch, and many sports events on ESPN are concentrated in the autumn and winter seasons. Summer is basically a window period for events. How can ESPN maintain subscribers at this stage? clue. "

Iger stared at Yang Cheng with burning eyes, "Then you must have a solution, right?"

Yang Cheng curled her lips, "Iger, this question is a bit naive. Even if I have a solution, will I say it now? If you have my solution, will you still sell ESPN to me?"

The corner of Iger's mouth curled up, and he smiled playfully, "Even if you don't say it, I may not split ESPN and sell it to a competitor. Don't forget, ABC is a comprehensive TV station that lacks sports content. , the TV station is incomplete, and I cannot explain to the board of directors."

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