Wednesday, May 16, 2007

ESPN – always raising the bar

News from ESPN Tuesday exactly what the sports industry has come to expect from the world-wide leader the Disney owned network is set to launch a slew of new programming initiatives along with a series of video podcasts. ESPN’s business plan is a testament to the age old saying “If you stand still, you’ll never move forward”. Not everything ESPN has touched turns to gold, but more often than not, ESPN has evolved into a money-making machine for Mickey, Donald and Goofy.

What made ESPN’s series of announcements Tuesday that much more intriguing it marked one of the first times a cable network chose to introduce their new fall programming at the same time the five national networks were in the midst of similar announcements.

ESPN’s President George Bodenheimer made it clear to Ad Age he has no issues mixing it up with the big boys of network television.

“It was a tangible way for us to demonstrate the world of our entire brand. And in this case, actions speak louder than words. Ed works closely with Mike Shaw [ABC's head of sales], and together they're looking to provide value to our advertisers.”

It’s clear to anyone paying attention for the most part whatever ESPN is offering continues to be well received.

“We're taking quality product with Nascar, National Football League and the National Basketball Association and spreading it across the widest collection of media assets. ... We're truly leading the way in terms of integrated sales. ... If you like to associate your product just through ESPN, you know a sports fan will enjoy the product everywhere. We put your message in front of the fans.” Bodenheimer offered Ad Age

Tuesday’s announcement focused on a series of programming initiatives at what will be billed as an “Upfront” presentation for advertisers and other clients in New York. The announcements reflect the diversity of the company’s ongoing efforts to serve sports fans through a variety of genres and original programming, including enterprising journalism, action sports competition, fantasy sports, and specials that celebrate the popular “This is SportsCenter” commercials upon the 300th edition.

ESPN Reports (working title) will debut October 16 as a recurring primetime news magazine shot in high definition and dedicated to cutting-edge sports journalism. A team of award-winning ESPN correspondents will serve as the reporters -- Tom Farrey, Rachel Nichols, Lisa Salters, Jeremy Schaap and Michael Smith. ESPN The Magazine's Bill Simmons and ESPN.com contributor Chuck Klosterman will also be featured with the goal of bringing the pages of The Magazine to life with a well-paced, unique blend of behind-the-scenes footage complementing ESPN’s high standards of investigative journalism, storytelling and production. Content will be distributed across several ESPN platforms.

The SportsCenter Minute on ABC will debut in September as an hourly sports update during ESPN on ABC programming.

The Moto X World Championships, a new annual event from the ESPN X Games team, will feature the best Moto X riders in the world competing for title of Moto X World Champion in a variety of disciplines including Freestlye, Super Moto, Best Trick and Step Up. The inaugural event is scheduled to take place in April 2008 at a site to be announced. Live coverage will be featured on ABC, ESPN, ESPN2, ESPN360.com and EXPN.com, with additional content available on ESPN Mobile.

This is SportsCenter 300, a series of original specials airing on Tuesdays in September, will celebrate the 300th commercial in the award-winning “This is SportsCenter” promo campaign. Now in its 14th year, the humorous and memorable spots have grown to embody the spirit of SportsCenter and the ESPN brand at large. The programs will look back to the early days of the campaign; showcase the most memorable spots; and hear from top sports stars about their experience shooting a "This is SportsCenter" spot. The final show will include the premiere of the 300th commercial. This is SportsCenter 300 will also include radio, magazine and online components.

ESPNEWS will debut a weekly Sunday morning one-hour program focusing on fantasy sports in August (title TBD). The show will extend ESPN’s on-going increased focus on this popular activity, via segments on Sunday NFL Countdown, Baseball Tonight and ESPNEWS, and a Sunday-morning show ESPN Radio.

Along with the programming news the ever evolving world of podcasting is proving to be yet another opportunity for ESPN to leverage their content on more platforms. ESPN Tuesday launched its first free, downloadable video podcasts available daily via the ESPN PodCenter and soon to be available via the iTunes Store (www.itunes.com). The first video podcast offerings include a downloadable version of the popular ESPN.com SportsCenter Minute, the “Big Finish” from ESPN’s Pardon The Interruption (PTI), the “First Word” segment from ESPN’s Around The Horn, ESPN Digital Media’s “Fantasy Focus” daily original fantasy sports news and analysis program (also available daily on ESPN.com and ESPN Mobile TV), and the “Mike & Mike Moment” from the popular morning radio and television program. Each podcast is between two and seven minutes in length, in MPEG-4 format, and can be watched on fans’ computers or on portable digital devices.

“Sports fans want their video everywhere they are and on any device,” said John Kosner, senior vice president, ESPN New Media. “Through downloadable video, online video at ESPN.com and on your phone, plus live and on-demand events on ESPN360.com, we continue to bring fans the very best content in sports.”

ESPN video podcasting launches in the midst of ESPN’s industry-leading success with audio podcasts and on-demand digital radio initiatives. Since beginning its first audio podcast in July 2005, ESPN has expanded to produce more than 30 original and edited podcasts that account for more than four million downloads each month by more than one million unique users on ESPN’s PodCenter and the iTunes Store. As further testament to the popularity of ESPN podcasts earlier this year AndoMedia Web Metrics reported that, from January 11 through March 29, the total amount of time sports fans spent listening to ESPN podcasts equaled 24 years, 308 days and 19 hours.

Like ESPN audio podcasts, ESPN video podcasts will be ad-supported. Since the launch of audio podcasts, advertising for ESPN audio podcasts has grown by more than 200%, driven by sponsorship and advertising from major marketers including: OnStar by GM, AT&T, AutoZone, Nivea For Men, Lamisil AT, Progressive Auto Insurance and Dick’s Sporting Goods.

In addition to free, ad-supported video podcasts, ESPN also offers commercial-free premium downloadable programs and complete recent and classic games via iTunes, including packages of content tied to great college sports rivalries like North Carolina versus Duke basketball and Ohio State versus Michigan football, major sports events like The Rose Bowl, original ESPN events like the X Games, and ESPN Original Entertainment programming like The World Series of Poker and The Contender.

Created in 1979, ESPN continued their remarkable growth in early December when the network announced they had acquired a minority stake in the Arena Football League. In the last thirty days along with buying into the Arena Football League, ESPN has agreed to work with NASCAR in securing a new lead sponsor to replace Busch for the sport’s Tier II racing series, announced the creation of a sports film festival with the renowned Tribeca Film Festival, moved forward with plans to expand into England and continues to set cable ratings records with Monday Night Football. All of this accomplished since December 1.

Earlier this month investment bank UBS announced at a New York conference they had determined ESPN value to be $28 billion. UBS said ESPN accounted for 40% of Disney's $70.7 billion market capitalization. Disney owns 80% of ESPN, with Hearst holding the remaining 20%.
"I feel pretty good about ESPN being part of the overall family as it is," said Tom Staggs, CFO of ESPN's parent told Media Post.

UBS made it clear their confidence in ESPN’s value is in part based on how strong the ESPN brand is. Tuesday, the Arena Football League not only embraced UBS philosophy in the value of ESPN’s brand recognition, they married the future of their league to ESPN.

ESPN acquired minority ownership in the Arena Football League as part of a five-year agreement announced Tuesday that includes extensive multimedia rights and a minimum of 26 televised games per season, beginning in 2007. The agreement enhances ESPN’s year-round football programming lineup, the most comprehensive in sports television.

Similar to recent major ESPN content acquisitions, the agreement entails a broad range of rights. Fifteen ESPN platforms will benefit from this new agreement, including ESPN, ESPN2, ESPN on ABC, ESPN Classic, ESPN HD and ESPN2 HD; ESPN.com; Spanish-language ESPN Deportes; ESPN360 (the company's growing interactive and customizable broadband service); Mobile ESPN Publishing (the company's wireless content licensing business); ESPN Radio, ESPN The Magazine and other ESPN-branded services (i.e., iPod, video on demand). ESPN also gains the right to both air and syndicate Arena Football League games through ESPN International.

“We are committed to the Arena Football League and its exciting brand of football. We will help grow the league across all of our multimedia platforms. As the league grows, so will our business, and we see a bright future for us both,” said John Skipper, executive vice president, content, ESPN.

“This is the longest and most comprehensive media partnership in AFL history,” said Commissioner David Baker. “ESPN’s brand is ingrained in sports fans, who watch, read and listen to its multiple media properties. Through its equity purchase, ESPN now owns a piece of the AFL and has the ability to provide exciting football content on Monday nights for fans on a year-round basis. There is no better partner to help continue the AFL’s growth as a leading global, multimedia property than ESPN.”

One of the biggest keys to ESPN’s success – the network is always looking for opportunities to leverage their content, case in point a partnership announced last week with something called Gas TV.

GSTV is currently the first and only at-the-pump network to feature ESPN programming. GSTV is an IP-based digital television network that brings news, sports, weather and entertainment content to consumers on dual 20-inch LCD screens embedded in gas pumps in major markets across the country.

“Sports news and information is social currency, and sports fans expect ESPN to deliver the best in sports content and programming to them, wherever and whenever they are,” said Matt Murphy, senior vice president, Digital Video Distribution, Disney and ESPN Media Networks. “This agreement offers another opportunity to deliver on that promise we make to sports fans.”

Added David Leider, GSTV CEO, “We’re driven to provide mobile consumers with the most dynamic and entertaining programming available, while continuously enhancing value for our advertisers and retail gas partners. As the proven leader in sports entertainment, ESPN engages consumers with relevant content that further enhances the experience we’re creating for consumers at the pump. With the addition of ESPN, Gas Station TV is the most robust and results-driven media network of it’s kind available today.”

ESPN content on GSTV will feature the latest sports news and information updates from around the sports landscape. The content will be ad-supported and updated daily.
Here’s what Bodenheimer told Ad Age about ESPN’s Gas TV opportunity: “Now you're not going to be bored when you fill up your tank. It gives new meaning to pulling into a full-service station. I've been on flights where people are watching our content and don't want to get off the flight so they can see the rest of our event. Our CEO, Bob Iger, is really focused on creating the best content we can at Disney and distributing it as widely as we possibly can. So this is in line with the mission Bob set for the company -- we need to reach people and remain aligned with advertisers.”

It was interesting to note Bodenheimer’s comments on how critical brand loyalty is to ESPN’s success, brand loyalty from both the consumer and advertisers. And one of the biggest success stories according to Bodenheimer the overwhelming success Monday Night Football was to ESPN, a property ESPN is paying the NFL an incredible $1.1 billion a year in rights fees.

“Nobody attracts more men than we do. We've got a product and we know how to cater to advertisers' needs. The merchandising opportunities we provide, whether it's working with Home Depot, Wal-Mart or Dick's Sporting Goods, we want to partner if you want young men.

“It's a tribute to the power of ESPN, a tribute to the ESPN brand and the "Monday Night Football" brand as the greatest sports-TV property. It's a lesson in appointment viewing because you have the built-in promotion platform with the name alone -- it literally is Monday-night football. We've raised ratings 40%, and our marketing department did a great job with the campaign, "Is it Monday yet?"

“We have a very strong brand, and we're focused on bringing value to our advertisers. We're really optimistic that we've produced an entertaining show.”

For Sports Business News this is Howard Bloom. Sources cited and used in this Insider Report: Ad Age

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