The sports news world was rocked on Wednesday when ESPN laid off 100 staffers, many of whom were on-air personalities. This is not ESPN’s first major layoff, but it is their most visible with prominent reporters like Ed Werder, Trent Dilfer, and Jayson Stark among the long list of employees let go by the “Wordwide Sports Leader.”
ESPN, which was once the cash cow for Disney has been consistently losing money and viewership. Ad revenue fell 2.1% in one year as more and more viewers ditch typical TV subscriptions for cheaper online services. And people are “cord-cutting” drastically. The network lost 10 million subscriptions in a matter of three years, and it is only expected to get worst. To try to offset the damage ESPN raised their subscription fees, which only made people steer away from signing up.
To make matters worse, ESPN’s decreasing revenue comes at a time where they are paying an insane amount of money in broadcast fees to leagues like the NBA and NFL. In 2014, they reached a nine-year deal, $12.6 billion deal to broadcast the NBA. They also paid $15 billion to the NFL in 2011 to retain Monday Night Football through the 2021 season. Once one of their most profitable programs, MNF set a record low in ratings last season.
Remember, ESPN started this spending spree as social media really started to take off. Twitter had 100 million users in 2012. Now, Twitter is one of the biggest ways people see short clips of games, making ESPN’s flagship show, “Sportscenter” obsolete. Streaming options that have popped up as a substitution of a typical cable subscription have given consumers another option for programming that they pair up with free antennas for the major networks. The sports broadcasting industry, which was once, as one insider put it, “wrapped in Teflon,” has been upended and as a result, they had to lay off some of their most talented people.
While we don’t have the answers as to how ESPN can get back on track, we can learn from their mistakes by understanding just how important consumer behavior is to businesses everywhere.
Consumers are on the Internet all the time and 88% of people (not just millennials) are reaching to their mobile phones to find what they need. Consumers want to Google several options before making a decision. Consumers want to see reviews, they want to see prices, and they want an easy way to get in touch with you. If you are not doing all you can to keep up with increasingly mobile-focused consumer buying trends then you are going to see a decline in business, no matter if you are a plumber, a hair dresser, a lawyer or a cable sports giant.
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Learn from ESPN’s mistakes and understand what is important to your consumers. Digital advertising with AdMachines can help you generate high quality leads and stand out from your competitors. To learn more on how AdMachines can help you, contact one of our experts today!