Ben+Verovsky

To: Proximity Video Team From: Ben Verovsky Date: September 28, 2009 Subject: ESPN 360 Strategy analysis

Here is my ESPN 360 strategy analysis. With a niche on the emerging Internet TV market, ESPN 360 gives Gen Y access to live sports video streams. Our clients need to know if Gen Y will watch specialty sports on a small desktop or mobile screens.

__Profile__ Disney, is the largest media and entertainment conglomerate in the world. Founded on October 16, 1923, by brothers Walt and Roy Disney as an animation studio, it has become one of the biggest studios, and owner and licensor of eleven theme parks and several television networks, including ABC and ESPN (Wikipedia 2009). Luanched by ESPN, ESPN 360 was created in 2005 by George Bodenheimer, Co-Chairman of Disney Media Networks and President of ESPN Inc., and ABC Sports as a web based site for live sports programming in the United States, Mexico, Brazil, Chile and Europe. ESPN 360 gives all its users free coverage to live and recorded sport programs (Wikipedia 2009). In the US, ESPN 360 can only be accessed through an Internet Service Provider (ISP) that has paid ESPN for the service. The ISP's customer fee, gives access to ESPN 360 services regardless. Occasionally, ESPN360.com is "all access" and permits all individuals to access (Absolute Astronomy 2009).

ESPN 360’s revenue comes from three sources: ESPN 360 delivers more than 3,000 live, global sports events and reaches more than 24 million homes, tripling its distribution from 2 years ago. Service grew by 297% from a year ago. User’s logged more than 8 million viewing hours (ESPN News Release 2009).
 * (ISP) Internet Service Providers who pay for access to ESPN 360
 * Ads and Commercials before, during, and after live streaming video
 * Customer Registration Fee for those who have an ISP that are not in agreement with ESPN 360

__Competitive Landscape__ ESPN 360 represents a new shift from cable television to the web. The primary force driving competition is the power of the consumer. ESPN is making contracts with ISP suppliers to deliver variety of sport videos on the Internet. ESPN and ESPN 360 needs to appeal to consumers by offering the most sport coverage on the Internet. ESPN is trying to move all their cable content to the web. ESPN 360 can push the limits on advertising fees because no one else can provide there depth and variety of sports coverage. However, will this be successful transition from cable television to the web? ESPN 360 has no threat of competition. They have found a niche market for web delivery of live streaming video. ESPN 360 tops the competition over CBS, NBC, and FOX in sport coverage. ESPN 360 offers coverage of numerous sports that other networks fail to recognize, delivering full video coverage on the web.

__ESPN 360’s Strategy__

ESPN 360’s strategy is to acquire all ISP and transition from cable television to the web. “ Verizon, for one, is more than happy to pay."It’s a tremendous value-add — one more thing to help attract customers to our broadband service" (Buskirk 2009). “SNL Kagan does not track ESPN360.com, but based on a reported TV-type affiliate… that product could bring in revenue of $25 million. ESPN does not discuss financials” (Goetzl 2009). ESPN 360 has acquired these sports programs: (ESPN 360 does not offer NFL coverage)

__Gen Y Implications__
 * Basketball: NBA, WNBA, Euroleague, FIBA, NCAA (Men’s and Women’s)
 * Football: NCAA College Football, AFL
 * Global Soccer: FIFA World Cup events and global qualifiers, Confederations Cup, Football League (UK), Carling Cup (UK), La Liga (Spain), Italian Serie A, Portuguese Liga Sagres, MLS, US National team, international “friendlies” and more
 * Global Baseball: MLB, World Baseball Classic, College World Series, Little League World Series
 * Tennis: multi-court coverage of all four “grand slam” events and select other tennis events
 * Golf: extensive coverage of the US Open, The Masters, The Open Championship
 * Lacrosse: Major League Lacrosse, NCAA College Lacrosse
 * Misc. Sports: X Games and Winter X Games, NCAA Hockey and Softball, Open-wheel Racing, Professional Racquetball, International Polo and more

Will Gen Y will find all its online sport needs through ESPN 360? ESPN 360 is free to all its users that pay an ISP in accordance with ESPN 360. ESPN 360 will continue to attract more Gen Y viewers with normal and miscellaneous sport programs. In 2008, ESPN 360 was made available at no cost to approximately 18 million Gen Y, U.S. college students and U.S.-based military personnel via computers connected to on-campus educational networks and on-base military networks (those with “.edu” and “.mil” domains). We need to wait to see ESPN 360 programs keep Gen Y watching online sports.

References

Absolute Astronomy. (2009, September 16). ESPN 360. Retrieved September 16 from [|__http://www.absoluteastronomy.com/topics/ESPN360#encyclopedia__] Buskirk, Eliot. ESPN to ISP’s: Pay for Your Customers to Play Video. (2009, Febuary 5). ESPN 360. Retrieved September 16 from [|__http://www.wired.com/epicenter/2009/02/espn-stands-fir/__] ESPN News Release. Newly Re-Designed ESPN.com Launches. (2009, January 5). ESPN 360. Retrieved September 17 from [|__http://www.espnmediazone.com/press_releases/2009_01_jan/20090105_NewlyRe-DesignedESPN.comLaunches.htm__] Goetzl, David. Media Daily News. Enterprise: ESPN Classic Bumped Down, Focus on Younger Demos. (2009, September 8). ESPN 360. Retrieved September 17 from [|__http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=113116__] Wikipedia. (2009, September 17). ESPN 360. Retrieved September 18 from [|__http://en.wikipedia.org/wiki/ESPN_360__] Wikipedia. (2009, October 1). Disney. Retrieved October 1 from []