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Marketing Strategies & Business Model Of ESPN Sports

ESPN Marketing Strategies | The Brand Hopper

SAN FRANCISCO, CA - FEBRUARY 05: A view of the logo during ESPN The Party on February 5, 2016 in San Francisco, California. (Photo by Mike Windle/Getty Images for ESPN)

ESPN is a sports entertainment company founded by three guys called Scott Rasmussen, Bill Rasmussen, and Ed Eagan. Currently controlled by two companies: The Walt Disney Company owns 80% and Hearst Communications owns 20%.

Bill Rasmussen, his son Scott Rasmussen, and Ed Eagan formed the channel in 1979.

Founders, ESPN
Founders, ESPN

ESPN primarily broadcasts from studio facilities in Bristol, Connecticut. In addition, the network has offices and auxiliary studios in Miami, New York City, Las Vegas, Seattle, Charlotte, Washington, D.C., and Los Angeles. James Pitaro is the current chairman of ESPN, a post he has held since March 5, 2018, following John Skipper’s departure on December 18, 2017.

ESPN serves about 76 million television households in the United States as of November 2021, a 24% decrease from nearly a decade earlier.

History of ESPN Sports

William Rasmussen, a New England sports broadcaster, started ESPN to broadcast New England Whalers hockey games and University of Connecticut athletic events. The Getty Oil Company bought it before it began broadcasting in 1979, the year it began negotiating significant advertising contracts. It was sold to ABC, Inc. in 1984 and began showing National Football League games on Sunday nights three years later.

ESPN, although being a cable network, competes with the conventional networks in presenting live athletic events. Major League Baseball was paid $400 million in 1990 to broadcast 175 games per year for four years. College basketball and football events, including bowl and all-star games, as well as bowling, golf, martial arts, tennis, and lacrosse contests, were among the more than 65 sports carried on ESPN, which broadcast 24 hours a day.

ESPN began providing sports content outside of the United States in 1983, which led to the establishment of ESPN International five years later. ESPN International broadcasts regional sports programming, including as cricket in India and soccer in Latin America, as well as athletic events in the United States.

In the 1990s, ESPN developed a radio sports network, ESPN2, ESPNEWS, and ESPN Legendary, which featured rebroadcasts of classic athletic events; launched a sports Web site and ESPN The Magazine; and launched a chain of sports-themed restaurants.

In the new century, the corporation continued to expand significantly. ESPN entered the European market with a version of ESPN Classic in 2002, and ESPNU, which focuses on college sports, debuted in 2005.

Business Model of ESPN – How ESPN Makes Money?

Because Disney does not break out ESPN’s financial results, deciphering the part requires some detective work. The company’s media networks division is responsible for the company’s multiple television channels. The media networks segment generated $24.8 billion in sales last year. Furthermore, it generated $7.5 billion in operating profits, the most of any segment!

ESPN makes money from affiliate fees (per-subscriber fees imposed to cable providers and other pay-TV operators), advertising, and internet streaming.

Each cable television channel costs a little price to be included in a cable subscription. ESPN is often regarded as the most costly channel, yet it’s not even close. Cable users were paying more than $9 per month for ESPN’s top four channels (ESPN, ESPN 2, ESPNU, and SEC Network) in 2017, and affiliate costs have risen since then. In comparison, the majority of networks charge less than $1. ESPN has around 80 million subscribers. Even at 2017 affiliate fee rates, that equates to around $8.6 billion in yearly affiliate fees ($9 x 80 million members x 12 months).

Why does ESPN receive so much money from cable companies? Because ESPN is the most popular cable channel among men, with 200 million viewers each month. ESPN may create a lot of interest from marketers because of its high ratings and reach. ESPN advertising revenue is expected to be $2.3 billion in 2018, according to SNL Kagan.

Finally, ESPN established a streaming service named ESPN+ in 2018. ESPN+ is a supplement to the ESPN channel rather than a replacement. The app does not show the most popular sports games, but it does show broadcasts from the MLB, NHL, UFC, and other leagues. As of February 2020, the service cost $4.99 a month and had 7.6 million customers. This corresponds to over $460 million in yearly income, and it is rapidly expanding.

ESPN probably made at least $11.4 billion in income last year ($8.6 billion in affiliate fees + $2.3 billion in advertising + $0.5 billion in streaming). ESPN is one of Disney’s highest-grossing companies, accounting for well over 40% of the company’s Media Networks sector.

Costs in acquiring broadcasting rights of ESPN

Although ESPN undoubtedly makes more than $11 billion in revenue each year, it incurs considerable expenditures. Most notably, Disney spends a significant amount of money each year securing sports rights from leagues. These purchases are competitive, since networks such as CBS (ViacomCBS) and NBC (Comcast) competed for many of the same properties.

Disney, once again, does not release ESPN’s income statement, but it does offer some information on its content expenses. Disney announced $8.8 billion in sports content commitments for the coming year in its 2019 annual report. ESPN announced sports content expenditures of $5 billion in 2015, demonstrating how much more costly broadcasting rights had grown.

Marketing Strategy of ESPN

Here is some Marketing Strategy of ESPN and how they promote ESPN

Segmentation, Targeting and Positioning

ESPN targets sports-obsessed consumers, particularly youth and male sports lovers. The objective is to raise the number of customers and the price of ESPN+ by introducing additional material. ESPN+ is being promoted across the company’s media network, which includes TV channels, social media, and other platforms.

ESPN has established itself as one of the world’s premier sports media entertainment networks and broadcasters. ESPN has a benefit-based posting approach in order to develop a unique picture of the firm in the eyes of its audience.

Read moreComcast Corporation – The Media Juggernaut With Ever-Expanding Domination


Marketing Campaigns 

ESPN launched a marketing campaign called “ONE APP, ONE TAP” to encourage consumers to watch sports on their mobile phones. This Disney-owned ESPN is making its way to the digital market by developing the ESPN app. ESPN+, the firm’s streaming service, has garnered 10.3 million users, according to the company.

This program was a success since it allows customers to watch from anywhere at any time via its app. In September, total devices accessed by application and time spent increased by 15% over September 2019.

Link for this ad. ESPN App: One App, One Tap

ESPN also ran a promotion honoring resilient teams and fans. This campaign commemorates the return of the players to the field and the enduring passion of Fans and applauding their favourite teams and motto was there’s no place like sports. This was a successful campaign. People appreciated the notion of this advertising summoning gamers in the aftermath of the epidemic.

Link for the ad.ESPN | There’s No Place Like Sports | Better Every Year

This commercial was created to promote SportsCenter, which premiered in 1995. Until 2017, the New York office was in charge of ad writing and production. ESPN took over production in 2018. It was done to advertise their own center, which is highly regarded at the top, and it was a huge success.


Social media marketing

Social media marketing is extremely crucial when it comes to reaching a broad audience, and it is no surprise that a business like Hyundai takes full use of it.

ESPN’s aim is “more is more,” which entails increasing viewership via social media. ESPN is active on social media platforms such as Twitter, Facebook, Instagram, and YouTube. They have over 269 million followers and over 30+ Facebook, Instagram, and Twitter pages. These accounts include a lot of promotional and educational stuff for sports lovers.

SEO Strategies 

According to SEO rankings, the amount of keywords is terrible if it is less than 500, good if it is more than 1000, and spectacular if it is more than 10000. And, according to this graph and keywords, ESPN has a whopping 20,400,000 terms. That implies ESPN has already reached the pinnacle of its digital marketing efforts.

Influencer marketing

ESPN has several partnerships with major sports superstars, as well as a large number of Instagram followers and YouTube subscribers. ESPN recruited Omar Raja, an Instagram star, to upload sports videos. ESPN has taken over Ballervision’s YouTube channel, as well as Instagram, Twitter, and Facebook. ESPN’s subscriber base is rising by the day, and the firm is becoming more engaged on social media.


E-Commerce Strategies

ESPN offers an online retail store with a comprehensive variety of athletic equipment that they sell. It makes it simple to buy sports equipment online at a cheap price. It prioritizes product quality and has delighted customers all over the world. It has cooperated with GSI Commerce Inc., a leading e-commerce company.

Content Marketing

ESPN is quite active on YouTube and other social media platforms. Its primary goal is to provide its viewers with high-quality athletic events. It has proven to be one of the fastest growing American businesses, providing varied information on numerous athletic events.

 

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