ESPN Insider: Value Pricing Based on Their Market’s Competitive Nature
Calling me a chauvinist sports fan would be a drastic understatement. One of my most profound early memories was when I was sitting on the living-room floor, rolling my Hot Wheels car back and forth on the hardwood, when suddenly my parents screamed from the couch and hugged. I was startled, but most notably, I was confused. I looked behind me at the TV and noticed men in white jerseys embracing in celebration on a sheet of ice. The year was 1994, and I lived in New York. It was that moment, the New York Rangers winning their first Stanley Cup in forty years, that ignited my passion for sports that continues to burn inside me to this day.
ESPN has been the leader of the sports world (in terms of financial success and viewership) for many years now. As an avid sports consumer, I have been subscribed to their website for roughly fifteen years, where I receive special offers, up-to-date notifications, and quality sports journalism. One of the things I appreciate the most is their willingness to adapt to the times. As technology grows, the more innovative they become (apps, analytical breakdowns, web interface, etc.). And during the late 2000s, an online sports phenomenon emerged into the sports world that changed the landscape of sports viewership: Fantasy Sports.
To avoid rambling for hours about what Fantasy in sports is, I will give you a fundamental explanation of what is at its core. You and your buddies create a league, usually between 8–12 teams (people), where you draft players based on their position and abilities to fill up a full roster of players. Weekly, you play an opponent, and whichever team’s players accumulate the most points per week, will get a win against their opponent. Just like in real sports, there is a standings, playoffs, and a champion.
This online competition has become one of the most profitable games in recent memory. Almost all sports have engaged in it at one point or another. Fans feed off the competition that sports provide, so participating in that competition (grant it, in a vicarious, virtual sort of way) became an obsession, especially for me.
So, ESPN capitalized by providing their platform and analytics for Fantasy, going even as far as creating a whole sector of their company to it. They hired actual fantasy experts and run a show called Fantasy Football Now on ESPN, which airs a couple hours before Sunday afternoon kick-off for those looking for last minute advice for their teams. But as profitable as all these tactics proved to be, they weren’t the most creative. ESPN figured out a way to capitalize (I mean, exploit really) the competitive nature of sports fans, especially those who played Fantasy, by creating ESPN Insider.
The most valuable commodity when playing Fantasy sports is information. Getting up-to-date facts is essential in order to make the best changes to your line-up. So, ESPN discovered this insight, and decided to use it to their advantage. ESPN Insider is an online subscription that gives you the most up-to-date information, more articles written by highly-qualified journalists, daily expert recommendations, and “insider” information to give you the ultimate edge in Fantasy.
I’ve been in competitive leagues (money on the line we’re talking here) for the past decade, and despite my yearly $25 deposit towards Fantasy, I‘m typically quite frugal. But after a three year run of last place finishes, my competitiveness got the best of me, and I purchased ESPN Insider, which ultimately helps me win every year. ESPN implemented Keren’s idea of value pricing, which Keren defines as “the judgement of the consumer of the worth of the product or service relative to substitutes that satisfy the same needs” (Kerin 302). My competitive nature (need) is satisfied by ESPN Insider (relative substitute), provided by ESPN (product or service).
For me, this was an excellent marketing strategy because competition can often times ignite impulsive behavior, which is dangerous for a consumer but advantageous for a marketer. Non-sports fans may see this as a ridiculous purchase ($4.99 a month), and from their point of view, they’re right. They don’t see a necessity too spend money on quicker sports information. But that’s the entire essence of value pricing. It’s not for anyone but their target consumer. And take it from me (and my credit card), they hit the bullseye.
