Leagues, networks face huge challenge from new generation of fans: cord cutters
The fall is a great time for sports fans. Football season is in full swing, pro and college basketball tip off and October is blessed with the baseball postseason. Millions of people watch these games on TV. But lately there is a large segment of fans watching sports, but not in the traditional way. Cord Cutters, a term used for those who not only watch sports without cable, but all kinds of programming.
“In the past two years alone, ESPN has lost more than 7 million subscribers to cord cutting, which equates to more than half a billion dollars lost straight to ESPN’s bottom line,” according to houstonpress.com. That’s a significant number for a network that draws huge ratings. Cord cutting has become more popular in this decade. For many sports fans it’s cheaper to get a Roku or Apple TV and stream games online. Instead of paying 100–200 dollars for a cable package where you’re only going to watch 10–15 channels, you can buy something like Sling Box TV and pay 20 dollars a month. With Sling Box TV you can get live programming from networks like ESPN and CNN.
James Aviles, a cord cutter since 2013 said, “I saved my self over 100 dollars by just watching apple TV and Netflix. I had Time Warner Cable and it cost me too much money at the time.” Living on his own he found that he wasn’t watching TV as much. He prefers being a cord cutter cause of the flexibility it gives him. “I have NBA League Pass and I split it with seven other friends. I work a lot so when I’m on the go I can watch games on my phone,” he said. Avilez is a Lakers fan. He enjoys having league pass cause they don’t show the games locally.
Mario Iturralde, a cord cutter since 2009, felt he was more knowledgeable on sports when he had cable. He doesn’t regret getting rid of cable, but he does miss watching sports on a regular basis. “I see myself enjoying sports more with cable cause I would watch it more frequently, instead of waiting for a good game on the weekends or having to go to a bar to watch the games,” he said. Iturralde misses sporting events like Monday Night Football on ESPN and Boxing on HBO. He is a big Yankee and Knicks fan, so without cable it’s hard for him to keep with his teams. Since he doesn’t live stream he usually goes to a friend’s house or to a bar to catch the games. “I wish the local teams could put a game here or there on the local channels for fans like me who don’t have cable,” he said. Financially he’s happy not dealing with cable but finds it tough to watch sports like he used to.
The rise of cord cutters has made cable companies come up with different ways of offering cheaper packages to younger people. For instance, Direct TV is offering an NFL Sunday Ticket $24.99 a month plan to college students. They know this is a target demographic that probably doesn’t watch sports on cable. According to a study done by the New York Times, more than half of people 14–25 watch their programing through a computer, smartphone or tablet.
ESPN has lost over a million viewers in the last two months. 621,000 in the month of October and 555,000 in the month of November according to The Huffington Post. That has an impact on a network that spends billions of dollars to broadcast live sporting events. ESPN is spending 1.9 billion yearly to show NFL games as well as 1.5 billion each year to NBA games.
What also makes this an issue is the fact that whether you do or don’t watch ESPN, cable subscribers pay seven dollars a month to ESPN in their cable package. Co-Founder of Chris Belivacqua Ventures Chris Belivacqua talked about what ESPN could do to balance out the loss of cable subscribers. “There’s now a negotiation going on between the likes of ESPN and distrubtors in over the top like Sling TV, Sony Playstation, Hulu and the likes of that, where they buy a skinnier package of networks versus what you have on the cable packages,” said Belivacqua.
Fox Sports 1’s Rob Parker chimed in on the issue and feels that people don’t want to pay for live sports programming and look for other ways to watch the game. I just think people don’t want to pay, as a kid you didn’t pay for TV, you watched the channels that were on. I think people are kinda going back to that. If they can get the game on some other vehicle or go out with friends for a big game to a sports bar and have some nachos, you know what I mean, instead of paying a 100 dollar cable bill every month said Parker.
Syed Hussein, a sales associate from Time Warner, says that Time Warner hasn’t lost a lot of customers in recent years. In terms of sports fans he does see an interesting trend going on. “Come NBA season or MLB season or NFL season people get subscriptions and when the season is over they cancel it afterwards,” he said. Hussein notices another trend among his friends who are big sports fans. “It’s usually smartphones and tablets now a days. People are really not home especially the young generation. Everything is done on the go, the TV thing is outdated,” he said.
The trend is getting bigger and it’s shaping the way cable companies are providing television programing to customers. On Demand services like Hulu and Apple TV are looking to merge with TV companies to broadcast live television. Social media is playing a role in it too. Twitter is offering fans a chance to watch NFL games on the app for free. Who knows where live sports programming is going. In the future all of us might be watching sports games without an actual TV.
