ESPN Execs Talk Sports’ Migration To Streaming And The Steep Growth Curve For ESPN+: “Digital Is A Godsend”

EXCLUSIVE: By design, the launch of ESPN+ in April 2018 did not resemble that of streaming sibling Disney+ a year and a half later, with its Mandalorian cannon shot and 10 million subscribers on Day 1.

Aiming at first to incrementally extend the universe of programming available to diehard sports fans beyond the pay-TV bundle, ESPN+ debuted with a few marquee attractions (Major League Baseball, boxing and college sports among them), plus some new on-demand and library fare. The venture gained a bit of early traction, but the early phase could be summed up by a single word: complementary.

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In the recollection of Scott Connor, executive director of product management at ESPN and ESPN+, “We started off on second base” on launch day, because the company had been streaming for years through authenticated apps like WatchESPN, giving ESPN+ a potential subscriber base of “tens of millions of homes.” The launch also was a proving ground for Bamtech, the former Major League Baseball division acquired by Disney ahead of its direct-to-consumer streaming pivot.

Today, analysts estimate that the pay-TV bundle is at least 20 million households smaller than it was in 2018, and the business model of sports media is shifting accordingly. ESPN+ is on a steep growth trajectory thanks to having a growing menu of high-profile events streaming exclusively on the service (such as an NFL game later this month), as well as its inclusion in the vastly successful Disney bundle, along with Hulu and Disney+. In the quarter ending July 3, the Walt Disney Co. reported 22.8 million subscribers to ESPN+, a 53% year-over-year increase, the best uptick by far in the company’s portfolio.

“Linear television is chasing something different” than streaming, ESPN digital programming VP John Lasker told Deadline in an interview. “They can use one game at 8 o’clock at night on ESPN to drive the biggest audience number. On ESPN+, we have the opportunity to use as many games as we have to build up to the same number. That might take five games, it might take 50, it might take 200 but it’s all a single audience, just having to watch different pieces of content, but they’re all on our platform at the same time.”

As the company’s streaming business has evolved, so also has the task of connecting viewers and fans with the programming they want, especially the live kind. On linear TV, networks like ESPN practice what is known as the “whip-around,” a brisk tour from one flurry of action to the next. In streaming, all of the action can coexist and be viewed separately, accruing to a significant whole. The volume strategy has begun paying dividends — on September 17, ESPN+ aired 52 live college football games, generating its most viewership ever on a single day. While the company has never broken out specific viewership metrics, it said a Kent State-Georgia football game last month set the mark as the most-viewed college football game ever to stream on ESPN+.

As the strategy and product philosophy has developed, “optionality for fans” has been the centerpiece, Lasker said. The company is increasingly experimenting with a streaming equivalent of the linear whip-around, building those offerings with guidance from a growing cache of user data. ESPN+ streamed 22,000 live events in 2021, alongside the programming on five linear networks.

Niche sports like tennis, golf and college baseball and softball have served as fertile ground for experimentation that is likely to soon expand to larger mainstream sports. PGA Tour Live, an offering within ESPN+, has seen its biggest viewership coalesce around a whip-style feed, Lasker said, reasoning that sports fans “still want the more laid-back, ‘show me the best of what’s happening’” experience.

ESPN’s streaming progress is being overseen at the top level by Jimmy Pitaro, chairman of ESPN and sports content for Disney, whose early career was shaped by a stint overseeing Yahoo’s media business in the 2000s. He also spent several years leading Disney’s interactive, digital media and gaming efforts before shifting to ESPN in 2018. While ESPN’s linear business remains a vital source of revenue, and Disney CEO Bob Chapek has recently reaffirmed a commitment to keeping the sports outlet in the corporate fold, its definition of audience reach has been changing.

“Digital is a godsend” for niche sports, Lasker said, “because there’s so much action happening at any given time, there’s only so much that linear television can do. TV’s job, and the [whip-around’s] job, is to say, ‘What do we think the most people would be interested in at this particular moment?’ But ‘most people’ could be 51% of the country or even 38% of the country, and the rest are broken up among a bunch of things that are happening.”

Increasing the ways that viewers can access ESPN+ video is another priority, given the way sports fans tend to consume news and information.

“When people are on our website, tiles are one way to navigate across that content, but also if you’re looking at a scoreboard, can we light up that scoreboard and link it back to our video system?” Connor said of PGA Tour Live. “There’s a row of all feeds across the top of the leaderboard,” which encourages casual browsers to become active streaming video viewers.

“You can’t assume, in the early stages of streaming here, that anyone who’s looking to see how Justin Turner is doing at the Memorial Tournament knows that the event is actually streaming right now,” Lasker said, referring to a top PGA pro. “There’s a large amount of people who don’t. … What they do know how to do is to go into their ESPN app and check their scores.”

Especially with the surge of interest in legalized gambling, ESPN has been testing versions of its PGA Tour Live feed, which delivers the familiar “whip-around” experience.

“I think you’ll see us do more of that,” Lasker said. “We did have some success just recently with deploying a content feed” for the NCAA softball and baseball championships last spring. “We saw tremendous feedback. It’s super-chaotic in terms of the games that are happening and we focused on doing it there because it’s tournament-style. Every game has an implication on the other.”

Connor noted another feature of ESPN+ that comes into play on college football Saturdays in the fall: a multicast feature via Xbox and Apple TV that lets viewers combine any four video feeds they want (drawn from linear or ESPN+ sources) and show them in a “quad box” filling their screen.

“There’s an infinite number of combinations,” Connor said. “It’s built for college football. We see a tremendous increase in multicasting on Saturdays in the fall.” The traditional setup of linear TV, he added, has some advantages. Your cable box it’s easy to use, but you can’t watch anything else. … Your Apple TV will let you watch ESPN1, SEC and two ESPN+ games all at once.” (No additional distribution partners are in line to add the multicast feature in the near term, ESPN said.)

Sports fans have grumbled lately about streaming glitches large and small, from DirecTV’s two straight outages for NFL Sunday Ticket to Amazon Prime Video’s not-quite-seamless debut of Thursday Night Football. Technology challenges will only increase as more fans watch on the internet — a shared network, as opposed to the pay-TV system, which is controlled entirely by programmers and operators.

“I think we’re in good shape” to handle the load, Connor said, especially due to the role played by Bamtech. Having personally worked on the WatchESPN team in 2010, he said, “we’ve been gradually going up this hill for a decade. Disney’s streaming folks came in and supercharged it.”

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