The Coming Disintermediation of ESPN
The way we consume sports is evolving rapidly, shaped by technological advances, changes in consumer behavior, and shifts in the broader media landscape. Amid this flux, the potential emergence of a direct-to-consumer model in college sports stands out as a trend of particular significance, with profound implications for all stakeholders in the industry (PwC, 2021).
As more and more colleges and conferences explore new revenue options, the direct-to-consumer model is emerging as a disruptive force that could reshape the sports media landscape. This shift may disrupt the roles of established networks like ESPN, ESPN+, the ACC Network, the Big 10 Network, and the SEC Network, which have traditionally served as intermediaries between colleges and their fans.
A report from PwC highlighted the growing trend of disintermediation in media and entertainment, pointing to the increasing control creators have over the distribution of their content (PwC, 2021). In college sports, this could translate to colleges bypassing traditional networks to establish direct relationships with their fans, creating personalized viewer experiences, and monetizing their content more effectively.
This trend is already taking shape in other sports. Front Office Sports reported that some high school basketball teams have begun experimenting with direct-to-consumer broadcasts (Front Office Sports, 2023). These early adopters are trailblazing a path that colleges may soon follow.
However, a shift of this magnitude will likely take 10 to 20 years, given the complexities involved and the long-term contracts many colleges have with traditional broadcasters. Despite this, the long-term trajectory is pointing towards more significant disintermediation and the colleges, conferences, and networks that can adapt to this change will be best positioned to thrive in the future sports broadcasting landscape. Let me put it another way, the organizations that understand how to market and sell their product will win – just like 99% of the goods sold in America today. In essence, start thinking today about your marketing campaign and how you are going to build your digital sales force or agency.
For traditional networks like ESPN and others, the implications of this shift could be significant. To maintain their relevance and value proposition, they may need to pivot towards becoming platforms for aggregated content from various colleges in a direct-to-consumer services model or seek partnerships with existing streaming giants such as Netflix, Amazon, Apple, and YouTube. They may need to redefine their roles in a landscape where content is king, and they no longer have exclusive control over the content. The name of the game will be subscriptions to content and advertising – not massive 20-year TV deals.
In this new era, smaller colleges or those without the resources to establish their platforms could find value in partnering with larger streaming providers or aggregating their content. This will allow them to enjoy the benefits of a direct-to-consumer model, such as a closer relationship with fans and a larger revenue share, without the need for substantial upfront investment based on a more aggressive revenue-sharing model.
As we move towards a more disintermediated future, the power of a brand will become increasingly important. A compelling brand, whether the Green Bay Packers in the NFL or the Georgia Bulldogs in Athens, Georgia, can maintain a global fan base despite being in smaller markets (Harvard Business Review, 2022). These facts weaken the network's “market size” debate. Moving forward, size doesn’t matter; brand recognition and reach are the primary drivers.
Transitioning to a direct-to-consumer model has challenges, including substantial investments in infrastructure, content production, marketing, and navigating a complex regulatory landscape. However, the potential rewards - increased revenue channels, deeper fan engagement, and more control over content – may make it a journey worth considering.
Front Office Sports. (2019). BallerTV. Retrieved from https://frontofficesports.com/ballertv-livestream/
Harvard Business Review. (2022). Building your own Digital Brand. Retrieved from https://hbr.org/2022/09/building-your-own-brand-platform
PwC. (2021). US edition: Entertainment & Media Outlook 2022-2026