Nielsen sticks with subscriber report challenged by ESPN

November 4, 2016 6:40 PM EDT

Interactive walls in the lobby of Digital Center 2, a new 194,000 sq. ft building on the ESPN campus in Bristol, Connecticut May 22, 2014 REUTERS/Michelle McLoughlin


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By Lisa Richwine

LOS ANGELES (Reuters) - The Nielsen ratings agency on Friday reaffirmed a report about U.S. pay-television customers that was challenged by Walt Disney Co's ESPN sports network.

Media reports said the Nielsen data, which showed a decline in subscriptions for most cable networks, suggested ESPN lost 621,000 subscribers from a month earlier. Neither Nielsen nor ESPN released the numbers publicly, but ESPN questioned the accuracy of the findings.

In a statement on its website, Nielsen said an "extensive review" undertaken after ESPN objected showed that estimates of cable subscribers provided on Oct. 28 were accurate.

Disney shares fell nearly 1 percent on Friday to close at $92.45 on the New York Stock Exchange.

"This most recent snapshot from Nielsen is a historic anomaly for the industry and inconsistent with much more moderated trends observed by other respected third-party analysts," ESPN said in a statement.

The figures do not include people who subscribe through digital TV services and other new distributors, the sports network said.

Nielsen, in its statement, said the company is researching newer providers to add those subscribers in future reports.

The future of ESPN has been a concern on Wall Street since August 2015 when Disney Chief Executive Officer Bob Iger acknowledged "modest" subscriber losses at the sports network. Disney and other media companies are facing challenges from "cord cutters" who are dropping traditional TV subscriptions for cheaper online options.

Nielsen said its data showed most cable networks experienced a month-to-month subscriber decline. The drop was driven primarily by a 0.55 percent decrease in the number of households paying for TV packages through cable, satellite or telephone providers.

Analyst Brian Wieser of Pivotal Research Group, which pays for access to Nielsen data, confirmed that Nielsen's latest report indicated a drop of roughly 621,000 ESPN subscribers. But he said it was not unusual as ESPN has seen previous monthly drops of around 500,000 or 600,000 customers.

Wieser estimated that year-over-year declines stood at 3.1 percent, in line with the 2 percent to 4 percent drops seen since the start of 2014.

"This has occurred as the network began to trade off high subscriber fees for greater flexibility" for pay TV providers, Wieser said in a research note. "We continue to believe that ESPN is experiencing low-single-digit subscriber declines."

(Reporting by Lisa Richwine; Editing by Andrew Hay and Leslie Adler)



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