The Medium identifies a few key trends each fiscal quarter that reveal the most important tensions and seismic shifts in the rapidly and dramatically changing media marketplace. The key trends help you answer a simple question: "What's next for media, and where's it all going? How are the pieces lining up for business models to evolve, succeed, or fail?"
Read the three key trends The Medium will be focused on in Q3 2023. This essay focuses on "Legacy media companies are throwing in the towel on their bets to own the consumer relationship in streaming and beyond".
I asked at the end of last week’s “Fare Thee Well, Media Conglomerate (...After April 2024)”: “Will [ESPN] be able to survive within Disney by April 2024? If not, how will it be better off outside of Disney?”
I cited one data point that raises cause for concern: All ESPN streaming viewing, including ESPN+, was 0.06% of all streaming viewing in July 2023, according to supplemental data from Nielsen’s The Gauge. I have trouble letting go of that data point because it basically says that ESPN+, which launched over five years ago in April 2018, still has not figured out direct-to-consumer marketing. But now, ESPN Chairman Jimmy Pitaro is promising investors ESPN “inevitably” will be a 100% direct-to-consumer business.
I don’t believe that will ever happen as long as Disney is a public company and/or as long as ESPN is within Disney. I have a simple reason for this from my own experiences as an ESPN+ subscriber: I never received any email marketing for the Wimbledon final last month, which was streamed live on ESPN+. Nor did I see any in my feeds.
And it’s not sour grapes on my part that I didn’t get notified: I was able to catch the closing moments of the match. But my X (néé Twitter) feed was filled with the text versions of journalists and friends wowed by the match, and I assumed I was missing it all because I had cut the cord years ago. A quick Google search out of curiosity during the final set of the match changed all that.
I’m also a Barcelona FC fan and ESPN.com knows that about me. ESPN+ broadcasts their matches as part of a $175 million per year deal with Spain’s La Liga. But, I almost never get notifications about when their matches are being played, or which ones are must-watch. And I can go on with other examples, but there are three key takeaways here:
I think Disney’s best solution is to simply borrow from Yahoo’s playbook and sell ESPN to a private equity firm.
ESPN management does not seem to be taking on the responsibility of taking care of the streaming customer, despite being over five years into the streaming marketplace. Both Yahoo and The New York Times offer valuable precedent for a better path forward for ESPN.
Total words: 1,600
Total time reading: 7 minutes
I last wrote about Yahoo in last November’s “It’s Not Just Disney”. Its pivot to digital media as a public company failed and ended in a $5 billion acquisition by private equity juggernaut Apollo Global Management in September 2021. I wrote:
Apollo’s strategy with Yahoo ...