RAIN 9/12: How ESPN became a rapidly-growing, multi-platform profit machine

Paul Maloney
September 12, 2012 - 11:40am

There's a great article in Bloomberg Businessweek on the mammoth, multi-platform success of the ESPN empire.

(Big hat-tip to Fred Jacobs, who covers the piece in his blog here where he wrote, "ESPN’s approach, decision-making, and risk-taking are what separates it from other traditional brands – and provides great lessons for radio companies and their very best stations.")

Since its inception in the late 70s, and especially over the past ten years, ESPN "has moved aggressively into new media and platforms, without regard for how they may negatively impact the old. This strategy allows ESPN to squeeze more revenue out of any event it carries by selling that same contest in multiple formats, instead of merely broadcasting it on television." ESPN president John Skipper credits the success to a philosophy of "build, build, build. There comes a time when a lot of businesses become calcified, but we never stop building."

Just how successful has their embrace of new media, especially mobile, been? "The number of users per minute, which is ESPN’s internal metric, reached 102,000 in June, an increase of 48% so far this year," and an astounding 70% of sports content consumed on mobile devices comes across an ESPN mobile app.

Skipper credits NOT cordoning off "digital" or "mobile," but making it everyone's priority. He said, "We have one revenue group, we have one ad sales group, so you don’t have factions fighting against this new digital group. … We don’t have a lot of infighting. We have everybody incentivized so that it’s about the total amount of business we do."

And, they don't wait for an ROI before they actually begin building the business. "ESPN has invested in creating content for a platform before business exists to support it. John Kosner, executive vice president for digital and print media, says, 'We’re not afraid to be ahead of the market. You win by delivering what fans want, and then that becomes a fantastic advertising proposition and a great business.'"

Read the Bloomberg Businessweek article on ESPN here.

ESPN Audio is a finalist in both the "Best Overall Online Radio Service" and "Best Overal Digital Strategy" categories for this year's RAIN Internet Radio Awards (see all the finalists here). ESPNRadio.com is a finalist in the "Best Streaming Broadcaster" category. We'll announce the winners at RAIN Summit Dallas this Tuesday. ESPN SVP/Production & Business Divisions Traug Keller revealed details of the then soon-to-launch revamped ESPN mobile app during his keynote address to RAIN Summit West this past April in Las Vegas.

Paul Maloney
September 12, 2012 - 11:40am

Harris Corporation and Geo-Broadcast Solutions have announced they'll soon begin testing their technology to deliver targeted broadcast radio content to specific local geographic areas (think geo-targeted ads for terrestrial radio).

They call the technology ZoneCasting, and the companies say it will enable "precise, targeted advertising to many defined zones across a single broadcast market." WRMF-FM/Miami will launch the first commercial test system this fall with an eye toward official deployment.

Harris is the exclusive transmission supplier for GBS ZoneCasting Systems, and is a well-known producer of wireless equipment, electronic systems, and antennas for commercial, defense, and goverment industries.

Paul Maloney
September 12, 2012 - 11:40am

According to Nielsen research, as of July, 74% of 25-34 year old mobile customers now own smartphones, a surge from last year's 59% for that group.

However, the most dramatic increase of smartphone penetration was among teenage (13-17) mobile customers, with the majority (58%) now owning a smartphone. That figure was just 36% a year ago.

"Among most age groups smartphones represent the majority of U.S. mobile subscribers, but American teens were the age group adopting smartphones the fastest," said Nielsen analyst Nichole Henderson in a press release. "As teens increase in their share of smartphone owners, mobile carriers and manufacturers should consider how to market to this growing group."

Overall, 55.5% of U.S. mobile subscribers own smartphones, up from 41% a year previous.

The graph, and press release, are from Nielsen, here.