Walt Disney: Domestic ESPN subs fell to 88 mln in October, the lowest level since 2003
On Wednesday afternoon, Disney (DIS) disclosed in its 10-K that it lost another 2 million domestic ESPN subscribers in FY17 (October).
Total ESPN subscribers fell to 88 mln -- the lowest level since 2003. ESPN had 90 mln subs at the end of FY16, down from 92 mln in FY15 and down from 95 mln at the end of FY14.
Domestic ESPN subscribers peaked at 100 mln in 2010.
The Worldwide Leader in Sports continues to lose subscribers as consumers 'cut the cord' -- opting to stream content online instead of paying for an expensive cable bundle. Social media has also cut into traditional TV viewership.
Less subscribers means lower ratings and lower ad sales. Meanwhile, ESPN has signed longer term contracts for sporting rights, which are going up.
Earlier this month, Disney reported FY17 cable networks revenue down 1% to $16.5 bln with operating income down 10% to $5.4 bln.
To combat all of this, Disney is launching its own over-the-top (OTT) ESPN offering 'ESPN Plus' in the Spring of next year. Disney also plans to launch a streaming service for its other Disney content, including legacy animated franchises, Marvel and Lucas Films in early 2019.
M&A has picked up in the media sector in the face of these secular headwinds. Disney and Comcast (CMCSA) are reportedly in talks with 21st Century Fox (FOXA) for some cable and movie production assets.
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