The Medium
Monday AM Briefing: ESPN Attempts to Aggregate Scarcity
In Q1 2023, PARQOR will be focusing on four trends. This essay focuses on "The definition of scarcity is continuously evolving away from linear. What happens next?"
Author's Note: My latest opinion piece for The Information, "Disney's Hulu Deal Ain't Over Till It's Over" is live! With the help of New York Yankee legend Yogi Berra, I analyzed why Hulu has obvious value for both the supply (content producers) and demand (TV watchers) sides of the business, and that is why no one is an obvious taker.
Last week, Disney's ESPN signaled its interest in aggregating scarcity in a post-RSN world. To remind you, scarcity is the linear distribution model’s historical moat — the linear model enabled multichannel video programming distributors (MVPDs) to aggregate millions of households locally, regionally and later nationally. It has similar business logic to the circulation model of the print business.
CNBC’s Alex Sherman reported that ESPN has“held conversations with major sports leagues and media partners about launching a feature on ESPN.com and its free ESPN app that will link users directly to where a live sporting event is streaming.” The vision for ESPN is as “the hub of all live sports streaming”, a single destination where all sports fans can discover where their team’s sports event is streaming.
The superficial math of it makes sense: ESPN Digital announced that in 2022, Comscore recorded 108.2 million average monthly unique visitors and the ESPN app recorded 25.4 million average monthly unique visitors. Assuming it can convert 1% of those visitors to streaming subscribers to any live RSN game, the rule of thumb for conversion funnels is that the agreement may create 1.1 million average monthly visitors to such sports streaming apps as Apple TV+, Amazon Prime Video, or a regional sports service such as Sinclair’s.
Key Takeaway
The risky bet in ESPN's plan to be a streaming hub is the conversion funnel. Does it control enough of the funnel to succeed? Does it know the consumer well enough to make money?
Total words: 1,000
Total time reading: 4 minutes
But, the conversion funnel
But the risky bet in all this is the buyer’s journey from ESPN.com or the app to a streaming app (aka, a conversion funnel). The assumption seems to be that because the sporting event will be one click away from nearly 110MM monthly average users on ESPN.com and ...