SVG Summit: As Fox Deal Looms, ESPN President John Skipper Hits on Sports Media's Hot-Button Issues In Keynote Conversation, Skipper also touched on ESPN Plus, ballooning sports rights, Total Audience ratings By SVG Staff
Wednesday, December 13, 2017 - 5:51 pm
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As reports of Disney's rumored $60 billion acquisition in 20th Century Fox engulf the M&E industry this week, ESPN President/Disney Media Networks Co-Chairman John Skipper took the stage to close out the 12th-annual SVG Summit. Though declining to comment on any reports related to the deal, he used the Summit's Closing Keynote Conversation as an opportunity to address a wide range of topics, including the upcoming launch of its ESPN Plus direct-to-consumer OTT service, the ballooning costs of sports rights, the network's shift to Nielsen's Total Audience measurement, its soon-to-launch new studio at NYC's South Street Seaport, and the current state of sports journalism.
Here are some highlights from the conversation with SVG Executive Director, Editorial, Ken Kerschbaumer:
On Disney's upcoming launch of the ESPN+ direct-to-consumer OTT service:
It's pretty clear that the technology of distributing video is going over the top, and that's where we're going with this. We bought in BAMTech, the world's greatest video-platform service for streaming live events, and we're going to launch a direct-to-consumer over-the-top service sometime this spring. We're going launch a new version of the [free, authenticated] ESPN app this spring, which is going to be the best way to consume the totality of ESPN in the future.
In addition, we are launching a complimentary product called ESPN Plus, and it is the way to take all the stuff you love about ESPN and add more to it. Within the first year, we will have an aggregation of 10,000 new live events on ESPN Plus. That means we will distribute more than 25,000 events next year. It will also have a large collection of video on demand. You think of it in two buckets: a bunch more games, [including] e niche sports, and a Netflix-like aggregation of multi-part docuseries and behind-the-scenes [content].
What we're really doing is preparing to thrive in the future however the business models, the way people consume content evolves. So, however the world evolves, we can adapt; we can move our content around if necessary. Make no mistake, we want to take the most value out of the current system as possible but be prepared with optionality if we need to move into a different world.
We will certainly be charging a monthly fee, with a yearly price that's a partial discount. We have not decided on the price. What's most important to us is to get the product and the technology right, to get the app improved and downloaded by more people, and to begin to aggregate subscribers with their credit-card information.
On the impact of digital MVPDs and cord-cutting:
What we have begun to see - and we believe that we will continue to see this trend - is that the digital over-the-top MVPDs are beginning to have a significant offset for the traditional sub losses.
We can't see the future, but we think we can see what the options are going to be in the future, and we want to build a leading platform. I do believe that you're going to need to have over-the-top services. We do continue to drive dramatic value from the traditional pay-television system, and we have supplemented that with being the first mover, which we did with Dish when we launched Sling, in launching an over-the-top service. In these universes, we have 100% penetration. Which means that, if DirecTV Now has a million subscribers, we have a million subscribers.
ESPN adopting the Nielsen's Total Audience metric:
We think the single most important thing to measure is what our total audience is for our linear presentations. And we've been working with Nielsen for years to get what they now call Total Live Audience, which came out eight weeks ago. It takes the traditional Nielsen homes, puts the digital MVPDs with it, puts out-of-home with it, and puts ESPN streaming with it. I'm proud that we're the first customer. We've worked with them to develop it because we judged that we would be the greatest beneficiary of this. We don't have less people watching ESPN than last year; we have more. It just turns out they're watching in different ways. You add all those together, and our audience is bigger than ever. And importantly, 46% of the people watching on those new ways are millennials.
So the dialogue that millennials aren't watching video, aren't watching television, is not accurate; they're simply watching it in a different way than we did. And this is a very important new measurement that we believe is going to help us. We're going to sell against this. Because Nielsen measures it, it has credibility and relevance to the agencies and advertisers, and we expect to see some dramatic benefit.
It raised our total-day audience 14% and primetime audience 3%. We'll go into the market and sell off this new currency, because it is going to be accepted by marketers. And we do believe ESPN is the best remaining live aggregation of audiences on sports. Last year, among the top-100 rating shows on television, 93 of them were sports. Last year, sports won the night 216 days out of 365, and ESPN won it 80 days of those 216. We think that trend will continue and it will be among the very last places you can get a large aggregated live audience to run your movie ads on Thursday night for a Friday opening.
On ESPN's massive NBA-rights deal:
It is a ridiculous notion that we misunderstood the market for the NBA, that we miscalculated what would be appropriate pay for the NBA, or that the world was changing i
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SVG Summit: As Fox Deal Looms, ESPN President John Skipper Hits on Sports Media's Hot-Button Issues In Keynote Conversation, Skipper also touched on ESPN Plus, ballooning sports rights, Total Audience ratings By SVG Staff 
