Not the biggest surprise, really. Been obvious for a while now that ESPN was getting no traction with its recruiting sites, and weren't even really attempting to pour in the resources necessary to take on the established players, despite adopting their exact same business model. For a late entrant to the market, that is a strategy guaranteed to fail.
Lot of speculation out there that ESPN isn't necessarily leaving the market, but instead ceasing its own operations and looking to acquire either 24/7 Sports or Scout and go from there.
24/7 is the obvious target because they are a new player who has had a good deal of initial success, and who could probably demand a pretty hefty purchase price. On the other hand, Scout has been an absolute disaster with Fox, and in mind-boggling fashion still operates on the same same technology platform that was rolled out way back in 2002 (yes, you read that right). If you recall, Fox / Scout rolled out a new platform last fall, but it was an absolutely epic flop that had to be quashed almost immediately, and in the year since Fox has given no indication that any further upgrade was imminent.
Given how terrible that 50 million dollar acquisition has been for them (yes, again, you read that right), they might be looking to sell altogether, especially with their new emphasis on launching Fox Sports 1 as a direct competitor to ESPN. Not sure ESPN would be willing to acquire them over 24/7, though they could almost certainly get them cheaper, but in any event don't be surprised if you see ESPN make a move for one of the two in the months ahead.
ESPN seems to not know what to do with their internet offerings. For instance, that whole ESPN3 thing, which they heavily advertised and actually did have some decent content. Then they seemed to gradually moved content off of there that people might actually want to watch. Then they got rid of their message boards, and seem to want everyone to use their real names and post through Facebook. Then, they axe the recruiting stuff.
"Everybody that chooses to go to the game should stay there and support the team for the game." - Nick Saban
"This is how it should be every game, every home game... the fans were just amazing". - Kevin Norwood on 2013 LSU game
"Four, five-star recruits are in Tuscaloosa, and then they see a stadium start emptying out at halftime" - Marc Torrence
"Dad, they got 90,000 at their spring game" - #1 2015 QB Ricky Town on committing to Alabama
Long story short, ESPN essentially asserts a monopoly-type power and acquires the broadcast rights to more games than it has the ability to broadcast live. For example, you have the rights to show 19 games all being played in the same time slot, but only 5 channels to show them, so you do the math. Just doesn't add up. So what did they do? Not wanting to actually relinquish broadcast rights and help fuel competitors, they came up with ESPN3, seizing on the advances in high speed internet which allowed for the streaming of high quality video content. You buy up the broadcast rights to most games, you broadcast the best ones, and you dump the rest on ESPN3.
Sounds good? For them, yes, but for the schools and conferences obviously less so. They got the paycheck, of course, but with much of the programming being dumped on a barely-used medium, they weren't getting the exposure concomitant with national television deals, so they became furious and there has been a lot of push-back against ESPN. That has led ESPN to withdraw a good deal of content from ESPN3.
And you are right that ESPN hasn't done well in the digital market, but then again they don't do well in much of anything aside from being a monopoly. Their true innovations came 30 years ago now -- 24/7/365 sports programming pumped into your home, and condensed highlight shows -- and they used that to build themselves into such a massive conglomerate that they simply have the financial capability to out-bid everyone else for the single most valuable commodity in sports, which is broadcast rights (and hence why they have the rights to probably 85% of all regular season college football games). ESPN does the monopoly act very well, and they have been tremendously profitable for it, but anything outside of that has been a real struggle for them for ages now.
The problem we have here is that this looming competition isn't actually going to make for better television, per se. You will see more games on television provided their network has some success, but the real winner in that competition will be schools and conferences, who will see surges in the amount of revenue they can demand in television deals. The end-consumer doesn't actually gain much of anything, and as it stands now it seems that they will gain almost nothing, given that Fox Sports seems intent upon replicating ESPN's model of vying for the lowest common denominator on its programs.
In other words, you'll just see the same old schtick: talking heads, blabbering loudmouths trying to outshout one another, washed up dumb jocks with nothing to contribute on TV at every turn, play-by-play guys more about a catch phrase and a persona than about substance, and color commentators who are roughly as informing as that drunk guy passed out on the end of your couch. Again, schools/conferences will win. Consumers? Pretty much the status quo will remain.
I don't see Shannon Terry selling 24/7 yet.
"If you aren't fired with enthusiasm, you will be fired with enthusiasm." ~Vince Lombardi
"Anthony Grant could've beaten us tonight by 80," he said. "The fact that he beat us by 40 was a class act, and I appreciate that." ~ Toldeo head basketball coach Tod Kowalczyk after an 83 - 41 loss to Alabama on 1/3/11
Just a hypothetical for the downfall of the ESPN monopoly:
I think the real competition for ESPN will come with the current paradigm shift from networks as content providers to the content providers as the network. This is happening slowly in the industry (online original series, on demand channels, etc ) and has already happened in the music industry. A great example is Mackelmore. An independent artist who distributed his product without the help of a major distribution company. As a content provider he essentially distributed through the relatively open/free-market channels that have cropped up over the past decade.
Providers no longer HAVE to have the network to get their product into living rooms. In the previous model this was the main value the network held. As this process continues and consumers become more comfortable with it, then the value of being on ESPN prime time will diminish. At some point watching a game on (let's say) ESPN360 will seem no different from watching ESPN or CBS.
At that point I think conferences will ask "whats the benefit of ESPN when I can distribute ALL of my games myself and I already have a product that self itself. This product doesn't need ESPN's promotion or their restrictions."
The Longhorn Network although a colossal failure was an incremental step in this direction, even though they paired with ESPN. At least from the standpoint of a university recognizing that it had a product it could sell as a standalone product.
Just a thought.
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The Big Ten Network is doing very well.
Yes, television networks do prefer better match-ups because of the increased TV ratings, but most of those games are actually covered under existing TV deals, so frequently there is no additional payout to schools (and when there is, it is typically somewhat menial). And finally, with many of those games being played at neutral sites, schools actually lose money by forfeiting a home game. May seem somewhat strange, but it's far more profitable for Alabama to play North Texas in Bryant-Denny than it is for them to play Michigan in Jerryland.
BET, I won't argue with you because neither of us would be able to provide enough evidence to sway the other, so I'll just agree to disagree.