Once Immune To Cord-Cutting, 'King Of Live Sports' Finds Throne Shaken Even as other channels tried to adapt to a new TV landscape, ESPN seemed to be impervious for one reason: People want to watch sports live. But ESPN has shed 3.2 million subscribers since May 2014.
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Once Immune To Cord-Cutting, 'King Of Live Sports' Finds Throne Shaken

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Once Immune To Cord-Cutting, 'King Of Live Sports' Finds Throne Shaken

Once Immune To Cord-Cutting, 'King Of Live Sports' Finds Throne Shaken

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ARUN RATH, HOST:

Cable TV is in trouble. These days, with Hulu and Netflix and all the network streaming online, you don't have to watch "American Horror Story" or "The Bachelor" live. You can stream it the next day, the next week, even the next year, but one channel was looking impervious to the trouble until now.

(SOUNDBITE OF ESPN THEME SONG)

RATH: NPR's Becky Sullivan explains.

BECKY SULLIVAN, BYLINE: ESPN has been sitting pretty through all this cord-cutting stuff for one simple reason. People want to watch sports live.

SHALINI RAMACHANDRAN: You're not going to wait two years to watch your football game. So that's kind of what has been holding together this idea of - all right, I'm going to pay for this bundle of 500 live channels 'cause I want to watch live sports the day it happens.

SULLIVAN: Shalini Ramachandran is a reporter for The Wall Street Journal. She's been covering the cable industry for years. But even ESPN, she says, the king of live sports - they're showing signs of trouble.

RAMACHANDRAN: In little over a year, basically since May 2014, it's lost 3.2 million subscribers.

SULLIVAN: Left and right, people are cutting the cord, and every time they do, ESPN loses a subscriber. Both the networks and providers are scrambling to figure out why these people are leaving. I called up two of them to find out for myself.

JON DUARTE: You know, 90 bucks wasn't an expense that I could afford.

SULLIVAN: Jon Duarte is an IT guy in San Antonio who loves sports. But he's from California originally, so it was tough to find his teams on TV in Texas, even with cable.

DUARTE: Luckily, if the Spurs played the Lakers, I got to watch the Lakers. Or if ESPN was showing the Laker game, it was cool. But actually cutting the cord and then finding alternate sources gave me the ability to watch the Lakers, the Angels or the Niners.

SULLIVAN: Turns out the choice is even easier if you don't like sports, like Benjamin Klahn in Joliet, Ill., who realized he was paying hundreds of dollars a year basically to watch reruns and the Discovery Channel.

BENJAMIN KLAHN: I'd seen a number of articles over the years about how much ESPN charges for the cable operators. So looking at my bill of, like, 50, 60 bucks a month, I'm paying a huge amount to ESPN, and I don't even like it.

SULLIVAN: Millions of people now have left cable entirely, which means everyone who profited off of the reigning bundle model are now trying to figure out how to keep making money off of these people. For their part, cable providers have started selling what they call skinny packages - fewer channels, no ESPN.

The sports leagues are also finding ways to hang onto these guys. The NBA, the NHL, the MLB - all of them already offer their own standalone streaming services, nut none of that helps ESPN, who still have to pay these huge fees for the right to broadcast these live sports in the first place. Just last fall, Shalini Ramachandran says, the NBA struck a new deal with ESPN, and the price nearly tripled to $1.4 billion a season. All of this has left ESPN to tighten their belt elsewhere.

RAMACHANDRAN: Because a lot of their costs are things that are really hugely valuable in what make ESPN what is, which is rights contracts with the NFL, the NBA - these big leagues. They can't really cut there.

SULLIVAN: Finally, Ramachandran says, sports fans are notoriously tech savvy. They're willing to embrace something new, which is what helped launch ESPN into the giant is today. Becky Sullivan, NPR News.

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