The extent of subscriber losses at its sports network ESPN continues to pressure shares of The Walt Disney Company (DIS).
In a report earlier this week, Nielsen said that ESPN lost some 621,000 subscribers in October, marking the network’s worst performance in its existence as a cable company. Although the rash of cord-cutters continues to grow, this is still a significant number given that, generally, ESPN has shed roughly 300,000 subscribers per month. (See also: Disney’s Plan To Reinvent Itself Using Technology.)
Plus, ESPN plans to spend almost $7.5 billion in 2017 for its sports programming. An accelerated decline in its subscriber base would make it nearly impossible for ESPN to justify spending that kind of money on sports rights that are losing eyeballs. Plus, at some point, licensing the most expensive content such as the National Football League and NCAA sports packages will become too expensive.
Disney wasted no time firing back, challenging the data used by Nielsen. In a statement, the company said, “The Nielsen numbers represent a dramatic, unexplainable variation over prior months’ reporting, affecting all cable networks. We have raised this issue with Nielsen in light of their demonstrated failures over the years to accurately provide subscriber data. The data does not track our internal analysis nor does it take into account new DMVPD entrants into the market.”
DMVPD, or digital multi-channel video programming distributors, include users who might watch ESPN via devices such as Sling TV or PlayStation Vue. Plus, Disney argues that Nielsen doesn’t factor in internet-based consumption such as its WatchESPN app and other mobile access. Shortly after ESPN issued that statement, Nielsen announced that it is pulling its November estimates and will readjust accordingly.
It remains to be seen what Nielsen’s new results will reveal. But if ESPN loses anywhere close to 600,000 subscribers, this is not only an issue for Disney, but other cable carriers should be worried. It could mean consumers are simply cancelling their pay-TV service all together.