Go figure. With the likes of YouTube and Deadspin coming along, Adam Thompson in the WSJ says that one reason ESPN is coughing up $2 million a year for Rick Reilly and hiring away quality journalists is to break news and in general, deliver a higher quality, gulp, product.
The brand ESPN created was a fun, irreverent locker room, driven by the highlights and hijinks of "SportsCenter," which it aired several times a day, updating all the while. But as video begins to explode on the Internet, the highlight formula is showing signs of plateauing: Sports fans can go elsewhere to catch up on the day's games -- and especially to indulge their local-team loyalties. TV ratings have flattened out, and Internet upstarts are luring away young sports fans who grew up with ESPN as part of the sports establishment.
So to remain the self-proclaimed "Worldwide Leader in Sports," the network is bulking up on content that is harder to duplicate. Rather than just introducing game video, the idea is to serve up breaking news and expert analysis, aggressively blanketing TV, the Internet, the magazine and even cellphones. In the new Internet-fed landscape, a two-minute video can be just as important. And the ESPN brand isn't enough -- it needs individual go-to names like Mr. Reilly, or ESPN's existing Web star, "Sports Guy" columnist Bill Simmons.
Good news for the PGA Tour and it's 14-years-to-go partner Golf Channel: even ESPN's ratings are down.
ESPN's cable-TV operation is still a juggernaut. It charges cable operators more than $3.26 per subscriber per month, an industry high that will jump to $3.65 in 2008, according to Derek Baine, senior analyst at SNL Kagan. Mr. Baine values ESPN at close to $30 billion.
But the network's year-to-date ratings are down from a year ago. The average number of households tuned into ESPN in 2007 declined 10.2% in prime time and 5% for the full day through last week, after climbing over a similar period between 2005 and 2006, according to Nielsen Media Research. Some of its brand extensions have failed: A much-touted mobile-phone service went bust last year (the ring tone was the SportsCenter theme song, but the other features weren't compelling).