Big news: ESPN+ passed 12M subscribers. They had previously projected reaching that number by the end of 2024.
ESPN+ subscribers (YoY growth):
1) 2019 – 6.6M
2) 2020 – 12.1M (↑ 83%)
Why this matters: Traditional pay-TV subscribers for ESPN have fallen from a peak of 100M in 2010 to 89M today. ESPN+ is not ready to replace traditional ESPN as the breadwinner, but direct-to-consumer is the future for the worldwide leader in sports.
ESPN subscribers through traditional pay-TV (YoY growth):
1) 2010 – 100M
2) 2011 – 99M (↓ 1%)
3) 2012 – 98M (↓ 1%)
4) 2013 – 99M (↑ 1%)
5) 2014 – 95M (↓ 4%)
6) 2015 – 92M (↓ 3%)
7) 2016 – 90M (↓ 2%)
8) 2017 – 87M (↓ 3%)
9) 2018 – 86M (↓ 1%)
10) 2019 – 85M (↓ 1%)
11) 2020 – 82M (↓ 4%)
Big question #1: How does ESPN make money?
Quick answer: Through a combination of affiliate/subscriber fees, direct-to-consumer subscriptions, and advertising.
Source of revenue for ESPN (% of total) according to Kagan:
1) Subscriber fees – $9.5B (79%)
2) Advertising – $2.6B (21%)
3) Total – $12.1B
Big question #2: How important is ESPN to Disney?
Quick answer: Extremely important.
2019 financial model for ESPN according to the Motley Fool:
1) Revenue – $12.1B
2) Content expenses – $8.8B
3) Operating expenses – $1.3B
4) Operating income – $2.0B
Big question #3: How does ESPN increase total subscription revenue with ≈ 18M fewer subscribers?
Quick answer: Price increases.
Quick math #1 on ESPN subscriber revenue:
1) 2000 – 100M subscribers X $1.14 X 12 = $1.4B
2) 2011 – 99M subscribers X $4.27 X 12 = $5.0B
3) 2019 – 85M subscribers X $9.06 X 12 = $9.2B
Quick math #2 on ESPN subscriber revenue:
1) Subscribers – ↓ 15%
2) Average monthly fee -↑ 695%
3) Subscription revenue -↑ 557%
Monthly fee for various sports networks according to Business Insider:
1) ESPN (ESPN, ESPN2, ESPNU, SEC Network) – $9.06
2) Fox Sports (FS1, FS2, Big Ten Network) – $1.86
3) NFL Network – $1.39
4) NBC Sports (NBCSN, Golf Channel) – $0.68
5) NBA TV – $0.30
6) MLB Network – $0.28
7) CBS Sports – $0.26
8) Tennis Channel – $0.15
9) Univision Deportes – $0.14
