Disney’s cable channels lose millions of subscribers

ESPN’s declining subscriber base was, of course, a big story over the summer, after Disney reduced its guidance during its second quarter earnings report. With the number of subscribers down to 92 million, ESPN’s performance seems to have taken a step back to 2006, when the channel had 92 million subscribers as well.

According to Disney’s 10-K filing with the Securities & Exchange Commission, released Wednesday, ESPN2 was also down 3 million subs, and most other networks owned or co-owned by Disney reported declines.

Of Disney’s primary cable channels, only Disney Jr. and the worldwide Disney and Disney XD channels showed growth in the past two years. Time Warner Inc. also revealed at the beginning of the month they are having a decrease in the numbers of subscribers.

Year to date, Disney stock is up 22%. That’s a decline that equates to hundreds of millions of dollars in lost revenue and helps explains why ESPN has made cost-cutting personnel moves over the a year ago, letting go high-priced talent such as Colin Cowherd, Keith Olbermann and Bill Simmons. Disney pays approximately $2 billion per year for the National Football League (NFL) games, and will pay $1.4 billion to the National Basketball Association (NBA) next year.

Walt Disney Co (NYSE:DIS) earlier this month recorded better than expected quarterly profit.

Some analysts have even accused Disney and ESPN of giving more value to price inflation than providing minimum guarantees on carriage.

In the meantime, Disney hopes that the Star Wars franchise will make up some of the losses.

The loss of subscribers for one of the most profitable networks and the loss of video customers for pay-TV operators have caused stocks to plummet across pay-TV and media sectors. After all, this is the business they have always been successful in and are more likely to keep up with the good work and good movies.