ESPN: Broadband Strategy

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ESPNBroadband Strategy

• Onnie Bose
• Mark Hicken
• George Hsin
• Shamus Prindiville

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ESPN A History

• created in 1979 as then-unheard of 24 hour
  all-sports network
• known to be a creative and innovative network,
  willing to take risks
• continues to move into unproven markets with
  remarkable success
• espn2 added in 1993
• ESPNews added in 1996
• ESPNet Sportszone (now ESPN.com) launched in late
  1994

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ESPN Internet Ventures

• Over 12 million unique impressions per day at
  ESPN.com
• 22 million visits at associated sites (NASCAR,
  NFL, NBA, ABC Sports)
• A mature player, the worldwide leader

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Main Competitors

• CBS Sportsline
• The Sporting News
• CNN/SI
• Yahoo! Sports
• America Online

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Looking Forward

• Cannot rely solely on brand equity
• Provide a value-added experience
• Anticipate broadband and online video delivery
• Focus on strengths in sports analysis

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Broadband and its implications

• The ability to transmit seamless voice, data, and
  video content
• the Wall Street Journal (10/98)
• Web entertainment is about viewers manipulating
  the programming to entertain themselves, The
  denizens of cyberspace dont just want to watch
  the show - they want to be the show.

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ESPN and the Sports Media Industry

• Providing live game content is expensive
• nearly 2 billion for NFL television rights
• highly competitive
• News, commentary, and feature programming drives
  revenue
• SportsCenter, NFL PrimeTime, Baseball Tonight
• analysis is ESPNs core competency
• advertising revenue for these programs are among
  the industrys highest

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Implications for ESPN

• The cost of sports content is escalating
• large network competition drives up costs
• ESPN should focus on delivering cutting edge
  analysis, commentary, and interactivity instead
  of broadcasting content
• in-line with ESPNs history and competencies
• keeps in mind the implications of broadband and
  the demand for compelling content

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ESPNs focus on analysis

• Partnerships and alliances (co-opetition) with
  traditional sports broadcasting networks
• Provide interactive media applications (Praja),
  fantasy leagues, and discussion forums
• Video content from partners surrounded by ESPNs
  interactive applications and analysis
• Becoming the Bloomberg of sports

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The Goals

• Short term
• leverage competency in sports analysis
• interactive service through traditional Internet
  connections
• Long term
• real, live interactive television when broadband
  delivery becomes feasible and widely-available

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The Product

• Streaming video content of game action (provided
  initially by ESPN or ABC Sports, and eventually
  by partnerships with networks)
• Surrounded by ESPN analysis and interactive
  content

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Critical Issues Grid
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Critical nodes in ESPNs Hugin Model

• Acceptance of new product by users
• Ability to cross-brand content (from
  broadcasters) to ESPN site
• Revenue model subscription v. advertising

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Hugin!
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Conclusions

• Broadband is inevitable--act early
• Costs of going forward with the project are
  relatively negligible
• In almost any case, the project will be
  successful
• Natural step in ESPNs evolution