ESPN President John Skipper addressed concerns about the strength of the TV bundle, declaring ESPN's business as strong as ever. "We've been candid about the effects that cord cutting and trading down to smaller packages have had," Skipper said in a taped interview. "We're focused on new packaging like Sling TV from Dish that will be enticing to millennials, to bring more subs to ESPN."
Skipper pointed to a recent uptick in ESPN subscribers, attributing it in part to ESPN's inclusion in Dish's new skinny Sling TV package, as well as more aggressive marketing from ESPN distributors, including Comcast and Time Warner Cable.
And Skipper said now ESPN is talking to the likes of Amazon and Apple to feature ESPN in their new bundles in the works. "We are looking to talk to new entrants, OTT distributors, to create opportunities," said Skipper. "We have the most desired cable network in the universe. We believe it is advantageous for distributors and ESPN to get into as many bundles as possible." And whether ESPN is in a skinny package or a big, traditional TV package from a pay TV provider, Skipper said ESPN gets paid the same thing.
Now that consumers have easy access to so much of the sports news and updates that were only available on ESPN, Skipper acknowledges that the focus of its linear programming is starting to change. "What has shifted is people are going to get scores, highlights on digital platforms, because it's available instantaneously. We have to do things like we're doing on 'SportsCenter' — adding more personalities, like a Scott Van Pelt show at midnight. We have to make sure we're delivering on the right platforms the right content that fans want."
As for questions of when ESPN will break out of the TV bundle and sell its product directly to consumers, Skipper said it's carefully watching — and where it makes sense, it already is going directly to consumers. "We sold the World Cup of cricket last year over the top. We generated 100,000 subscriptions at $100 a piece. So we know how to do it, we will continue to look for other opportunities that does not exist on our current linear networks, to put over the top."
But for the most part, Skipper says he doesn't expect the landscape to change too dramatically over the next three years: "For the foreseeable future the predominance of content that people consume on television or video will be in a pay TV bundle. We have authenticated TV. All our content is available on any device. The idea of going direct to consumer with that content is not the best way to drive value right now."
And despite the fact that sports rights continue to rise dramatically, Skipper said he's not concerned about those costs weighing on his bottom line. Rather he said he's glad he's locked them in. "Sports rights are going to continue to appreciate in the prices they can command on TV," said Skipper. "If you look at the last six years we have triple the growth rate of our TV peers in ad dollars on TV."
Disclosure: Comcast is the owner of NBCUniversal, the parent company of CNBC and CNBC.com.