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ESPN evolves with new media
In the past five years, the network has transformed itself from a series of cable channels into a diverse media company.
ESPN the Magazine has more than 2 million subscribers, ranking second among sports magazines. The Web site ESPN.com has more visitors than any other sports site, recording more than 17 million unique visitors each month.
Some of the biggest changes at ESPN occurred in the past year with the introduction of services designed to capitalize on the era of “new media.”
The company last year introduced ESPN360, a broadband service that shows live games and highlights on the Internet. In February, it introduced Mobile ESPN, a service allowing fans to get scores, highlights and — eventually — live games on their wireless phones. Meanwhile, ESPN upgraded its Web site to include video, interactive chats and video games.
“We try to reach sports fans wherever they are,” said John Kosner, senior vice president of ESPN New Media. “It gives us a unique way to leverage rights that we acquire and provide a more full experience for sports fans wherever he or she is.”
ESPN in 2004 opened a 120,000-square-foot “digital center” that allows producers to edit any highlight and distribute it onto any platform. A clip of Washington Nationals outfielder Alfonso Soriano hitting a home run, for example, can be edited into a highlight for that evening’s edition of SportsCenter while also being cut for use on ESPN.com, the ESPN Mobile service or special content for IPods.
“It’s revolutionary for us, because the culture at ESPN from the beginning was to conserve money in order to make this into a business,” said John Walsh, ESPN’s senior vice president and executive editor, who has been with the network since 1988. “We were losing sometimes $60-, $70-, $80 million a year. And one of the ways we survived was to say, we don’t always need the latest equipment.
“So all of the sudden to go from that kind of thinking to say, ‘You know what? We’re going to be the leader in the world in the digital movement!’ is a huge step in a different direction.”
The company now insists that all contracts with sports leagues and conferences include rights for the Internet and broadband and wireless services. As a result, revenue from sources other than television is expected to increase by 50 percent this year.
“We no longer are a traditional television sports media company,” Mr. Wildhack said. “[When] we do deals, we do deals for rights that apply to Internet, to broadband, to wireless. We’re a multimedia company. We don’t do conventional television deals anymore.”
ESPN officials acknowledge that as penetration of ESPN and ESPN2 has increased, so has the burden of keeping ratings high by showing only the most popular games and programs. The new platforms, they said, provide a way for fans of less-popular sports to see what they want.
“What it takes to program two 90-million home cable networks requires a really significant audience delivery to make sense,” Mr. Kosner said. “But on ESPN.com or 360, a much smaller audience can make sense.”
Swinging for the fences
While ESPN grows its platforms, the network also is spending money with no promise of a big financial return.
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