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The World Cup Built a Better ESPN

PORTLAND, Ore. (TheStreet) -- The FIFA World Cup, ESPN's and ABC's prized super event, helped turn Disney's (DIS - Get Report) broadcast holdings into a more efficient sports powerhouse.

Too bad the Worldwide Sports Leader will only get one chance to show off its new toys . . . just before its shows Fox (FOXA - Get Report), the potential new ESPN, how to use them.

Back in 2005, Disney and Univision paid a combined $425 million for the rights to broadcast the FIFA World Cup in 2010 and 2014. With ABC and ESPN's English-language rights coming out to roughly $100 million, Disney used the opportunity to push coverage of the 2010 World Cup onto ESPN2 secondary channel and, to great effect, its ESPN3 broadband streaming service. On those channels alone, ESPN increased World Cup ratings roughly 50% over 2006.

ESPN3 was the big star among all of them, however. Live World Cup streams drew an average 7.4 million unique viewers tuned in for matches. ESPN3 showed 942 million minutes of programming averaging more than two hours per unique viewer. All 64 live matches it showed were seen by roughly114,000 persons per minute, with the semi-final between Spain and Germany reaching by 355,000 people per minute for ESPN3's largest average audience ever.

Here's how long ago those four years were: Most of those streams were confined to laptops or desktops. Though the earliest version of the WatchESPN app debuted in 2010 as ESPN Networks, the multi-platform app as we know it now didn't debut until after the world cup in 2011. That's the same year that Roku debuted its second-generation set-top box that could utilize multiple apps and when Apple (AAPL) released the first high-definition iPad in the form of the iPad 2. Netflix (NFLX) divided its streaming and DVD services that same year and streaming found its footing.

The importance of 2011 to streaming and its role in sports coverage only became more apparent when NBC signed its latest Olympic broadcast deal for $4.3 billion. That agreement runs through 2020 and included $775 million for the rights to this year's Sochi Winter Games alone. NBC was just getting the hang of streaming at the time, but couldn't quite make it work. At the 2006 Winter Games in Turin, Italy, it streamed a scant 2 hours of coverage. By 2008, it was up to 2,200 hours that were more than confused potential advertisers knew what to do with. The Olympic Committee had its own YouTube Channel and streaming was generally a mess. At the 2010 Winter Games in Vancouver in 2010, it lost $223 million, mostly because it couldn't figure out how to monetize online and mobile content.

By the time the 2012 Summer Games in London came around, NBC cleared $88 million thanks to digital and mobile ad sales and a programming strategy that ran pre-recorded events in prime time despite the fact that fans could stream those events live and had the results hours earlier. This year, when NBC launched its mobile app for the Sochi Games, it required users to authenticate their cable subscriptions before letting them get a glimpse of events aired on MSNBC, CNBC, USA and NBC Sports.

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FOXA $30.26 0.00%
CBS $55.91 0.00%
CMCSA $60.76 0.00%
DIS $103.26 0.00%
TWX $75.14 0.00%


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