SUSTAINABILITY issue
A sustainable strategy has many components. This is especially true in the hypercompetitive sports entertainment industry. Around the world, there is an almost maniacal love of sports, sports teams, sports superstars, and sports trivia. While this phenomenon is nothing new, technology advances have raised this "want" to an instant gratification level.
This was not always the way it was. Way back in the 1970s, we watched sports when the three networks deemed that we were to watch sports. We watched only the teams that they chose and it was rare to see any sports that were not considered to be mainstream. When you think about the staggering number of sporting events that occur every day around the world, it was amazing how few were shown on television.
All that changed with the founding of ESPN (Entertainment and Sports Programming Network) in 1979 in Bristol, Connecticut. Aired with little content, a show called Sports Center, and a lot of Australian Rules Football, the company sought out an approach in a field that had been dominated by the major league sports teams. The new ESPN moved to 24-hour broadcasting on September 1, 1980. ESPN quickly realized that a sustainable competitive advantage required contracts. All the analysis in the world would not make up for the fact that fans were watching other channels. The top management at ESPN also realized that it would not just be about keeping viewers tied to a single television channel as the industry standard was at the time.
The company opened up new television channels, created a radio station broadcast for stations across the country moved aggressively into the Internet, and is the leader in mobile broadcasting of sports. Today, ESPN is the undisputed king of Sports broadcasting. Its projected 2013 revenues of over US$9 billion put it on a par with traditional media powerhouse CBS. ESPN charges cable companies US$5.13 per month/per subscriber in an industry where the average is US$ 20/month/subscriber. The company has bet its sustainability in this market on its contracts with the NFL (through 2021), MLB (2021), NBA (2016), NASCAR (2013), and Wimbledon (2023), as well as a series of exclusive or partially shared contracts with major colleges and conferences. It caters to the sports enthusiast by providing that customer with the access and information they desire in the manner they desire it. The company then takes each successful platform to advertisers and monetizes the platform. ESPN is unconcerned about cannibalizing platforms because they seek to continually reinvent the company. John Skipper (ESPN President believes that the company's dominance comes from a competitive approach that he calls "build, build, build.