I was in the cable industry for 30 years and ESPN was (at the time) about $6 of a $60 cable TV package. It was the largest fee for produced content. Other channels had to pay to be included in the line-up just so they could subsist on advertising revenue.
I'm not suggesting whether ESPN is or is not worth that kind of premium but it's also not surprising to me that they're suffering this type of subscriber loss. More importantly, ESPN subscribers are CATV (or satellite, etc) subscribers which means these companies are also hemoraging subscribers.
In the case of CATV companies, the equipment and cable plant are huge expenses and these companies usually build out more plant financed on the assumption that there will be large cash flow. The cost of the plant isn't going down even if there are no television subscribers. I'd expect to see the cost of unbundled Internet services from these companies gradually approach the price of their "double-play" offerings (TV + Internet).
I'm not suggesting whether ESPN is or is not worth that kind of premium but it's also not surprising to me that they're suffering this type of subscriber loss. More importantly, ESPN subscribers are CATV (or satellite, etc) subscribers which means these companies are also hemoraging subscribers.
In the case of CATV companies, the equipment and cable plant are huge expenses and these companies usually build out more plant financed on the assumption that there will be large cash flow. The cost of the plant isn't going down even if there are no television subscribers. I'd expect to see the cost of unbundled Internet services from these companies gradually approach the price of their "double-play" offerings (TV + Internet).