ESPN President John Skipper in a recent interview "dismissed the narrative that something fundamental is amiss" at the net, according to a Q&A with Sharma & Ramachandran of the WALL STREET JOURNAL. Skipper said that Disney’s media networks "had their best year ever in terms of revenue and operating income." He talked about the company’s plans to distribute more OTT content, "addressed the criticism that ESPN isn’t tough enough on the NFL, and explained the decision to lay off roughly 300 of the company’s 8,000 workers." Below are excerpts from the Q&A:
Q: What has been the biggest reason for ESPN’s subscriber declines?
Skipper: People trading down to lighter cable packages. That impact hasn't leaked into ad revenue, nor has it leaked into ratings. The people who’ve traded down have tended to not be sports fans. ... We still see people coming into pay TV.
Q: Would it be feasible to offer the entire ESPN network online to cord-cutters?
Skipper: We’re going to be delivering our content through the traditional cable bundle, through a lighter bundle, through Dish’s Sling TV, through new over-the-top distributors, and through some content that is direct-to-consumer.
Q: Besides layoffs, how else can you reduce costs to cope with the changes in the industry?
Skipper: You can do games with fixed cameras and robotic cameras. You send fewer people to do production of a game now, because you can do a lot more back here (in Bristol). When you go to Wimbledon you still have a person behind those cameras, but if you’re doing a week-to-week tennis match, you can save money.
Q: What’s the value of niche sites like The Undefeated and FiveThirtyEight?
Skipper: At the Undefeated, the play is about content. If you do a time-lapse of the last two or three years in sports, you’d see more stories pop to the top about race and sports than anything. It is an important area to explore. ... At 538, it is about showing leadership in data and analytics. It actually has helped us recruit (WALL STREET JOURNAL, 1/20).
Q: Is it true that you had certain options in your Sling TV deal that allow you to terminate the contract if it is cannibalizing your core pay TV business?
Skipper: I’m not going to contradict that. Our concern was: there is no financial benefit to us if people trade down (pay TV packages for Sling), but there is financial benefit to us if new entrants come in. We’ve had meetings with Dish. They, to our complete satisfaction, have showed us their research. We are highly satisfied that the overwhelming majority of Sling TV subscribers are new entrants.
Q: What happened to the idea of launching a streaming service with the NBA?
Skipper: We did not get to that as quickly as we hoped. We did buy some rights. We and the NBA did some exploring about doing an over-the-top service. We haven’t gotten to that yet. We haven’t abandoned it. You’ll see us continue to look at that. We’re still looking at other opportunities to go direct-to-consumer (WALL STREET JOURNAL, 1/20).
