🏈 Will ESPN’s pivot work?


November 13, 2020

PLUS: What is Etsy’s secret sauce?
November 13, 2020
The Hustle
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No one:
2020: Here ya go, one more Friday the 13th for the year. 

(P.S. On a related note, the geniuses at YouTube are canceling their famous “year-in-review” video because… 2020 is literally the worst.)

The Big Idea
Touchdown dance

ESPN is pivoting to subscriptions. Will it work?

ESPN — the Disney-owned sports behemoth — is shaking things up:

  • Last week, ESPN announced plans to lay off 300 people.
  • Earlier this week, content from the network’s top talent (e.g., Zach Lowe, Matthew Berry) was moved behind the ESPN+ paywall.

Combined, these moves mirror the new focus of ESPN’s parent company on direct-to-consumer and subscription-based businesses.

Considering the subscription model is seemingly everywhere (*cough* Trends *cough*) what took ESPN so long?

Answer: the cable bundle

The rise of streaming has led to a steady decline in cable subscribers. Despite the downward trend, ESPN has been hesitant to leave the cable bundle, which packages hundreds of channels together for one monthly price.

Rather, the sports broadcasting giant is making up for lower volume by flexing its pricing power.

While most cable companies charge less than $1 per subscriber per month, ESPN charges $9 across its network and brought in an estimated $11B for Disney last year (translation: people can’t quit live sports).

ESPN doesn’t want to cannibalize this sweet deal but it clearly sees the writing on the wall.

The company has experience with subscriptions

In 1998, ESPN entered the direct subscription game by launching:

  • ESPN The Magazine as the hip print alternative to Sports Illustrated
  • ESPN Insider as a digital subscription for deeper analysis

Eventually, ESPN gave away ESPN Insider with the magazine subscription to fuel engagement on the website. Fast-forward to 2018, when ESPN merged Insider with live-sports programming and exclusive originals to launch ESPN+.

Will the paywall work?

Since launching in April 2018, ESPN+ has amassed 8.5M subscribers

However, Rob Litterst — a Hustle contributor who writes the pricing strategy newsletter Good Better Best — found the bulk of ESPN’s growth was tied to 3 big events:

  • 4m+ subs: The launch of Disney+ and the 3-way bundle of Disney+, ESPN+, and Hulu
  • 500k subs: The first UFC event in January 2019
  • 500k subs: Conor McGregor’s return in UFC 246

Can ESPN+ keep pulling in subs with its in-house talent and not just splashy events?

While there are certainly skeptics (like Ron Burgundy), The House of Mouse is figuring out the subscription business fast: Disney+ has already notched 74m subs since launching on November 12, 2019.

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Snippets
  • Airbnb might list on the Long-Term Stock Exchange (LTSE).
  • UK-an’t: The UK is rolling out legislation that would make foreign takeovers of British companies more difficult.
  • Senator Amy Klobuchar — an Attorney General hopeful — said a Google breakup should “be on the table.” No word yet if she’’ll snuff the Google Meet button out of existence.
  • LETS GO! Gagan Biyani — co-founder of Udemy and the Trends Ideation Bootcamp — is building a platform for cohort-based learning (AKA learn with a peer group).
  • Way better than Black Friday: China’s Single’s Day shopping extravaganza brought in $75B and, insanely, included 800k homes for sale on the Tmall platform.
  • Bonus: TikTok… it’s banned. It’s not banned. The sky is up. The sky is down… we don’t care anymore. The Hustle will (maybe) never write about this cursed app ever again.
 
Ecommerce Madness

Etsy’s growth hack: face masks

Put your hand up if you bought a face mask this year from Etsy — the handmade and crafts goods platform.

You would not be the only one.

Etsy’s recent Q3 earnings release showed $2.6B in gross merchandise sales for the quarter, of which 11% were for masks.

Here’s a more tangible number: Etsy slanged 24m masks in the September quarter!

The mask effect is pulling in more sellers and new products

While the mask selling was a big pull in April, Etsy has continually added new sellers through the pandemic, according to research from Marketplace Plus.

It’s on pace for 1.9m new sellers this year (vs. 1m in 2019) and its product catalog has grown from 60m to 80m products.

“The increase was across the board,” notes Marketplace Plus, “with Home & Living, Art & Collectibles, and Jewelry departments leading.”

Come for the mask, stay for other handmade items

For 2020, Etsy is on pace for gross merchandise value of $8.5B to $9B, an 80-90% increase from 2019 (it’s worth noting that some Etsy mask sellers have been warned about making medical claims).

Investors have clearly noticed: $ETSY is up 4x since its March lows and is now valued at ~$16B.

In what will surely go down in business history books, Etsy is the first company to reach 10 figures in revenue while allowing the sale of “Doll Arm Earrings” (happy Friday the 13th)…

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Fore!
golf club

The Masters is the Super Bowl of golf. Here’s how it’s adapting to the pandemic.

Web Smith is a leading writer on ecommerce. In a classic piece titled On Linear Commerce, Smith explains how the lines between media and commerce are blurring.

Instead of creating products looking for end customers, organizations with built-in audiences (e.g., media ventures) can leverage this relationship to sell an assortment of products.

To illustrate his point, Smith writes about his experience at the Masters golf tournament (AKA the Super Bowl of golf).

Rabid fans + a historic golf course = captive audience ready to spend

Held in Augusta, Georgia, the Masters attracts 160k+ visitors (called “patrons”) over the course of a weekend and — per Smith’s analysis of the 2018 tournament — the average attendee spends $700 on merch with total sales hitting $60-70m.

But with the pandemic madness, how does “a tradition unlike any other” — which kicked off yesterday, sans patrons — maintain its air of exclusivity?

By launching its first-ever virtual Masters shop.

For patrons only — not us plebes

In addition to access to Masters-branded staples like golf shirts, cuff links, and umbrellas, 2020 ticket-holders receive tickets to next year’s tourney at this year’s price

… and the opportunity to buy the glorious-sounding “Taste of the Masters” food platter, which gets you 1lb of the event’s famous pimento cheese, as well as its egg salad and pulled pork BBQ for a mere $150.

The Masters also did a solid for non-ticket holders, releasing new viewing functionality on the website and app called My Groups.

Even without the on-course roars IRL, The Masters is still running a, err, masterclass in linear commerce.

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survey
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Have you had a dramatic career change?

Did you quit a law firm to be a sommelier? Leave a marketing gig to build furniture full-time? Swap engineering for architecture?

The Hustle wants to hear from those of who’ve had crazy (or not-so-crazy) career pivots.

What inspired you to take the leap? How long had you been in your previous profession before switching? Looking back, are you happy you did it?

Please take a minute or 2 to fill out our survey here.

We promise something tasty will come out of this.

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TRENDS

Build Once, Sell Twice: $1m in 18 months

Last week, Sam met Jack Butcher. Sam claims he’s one of the most interesting people he’s ever met. Here’s the TL;DR on Jack:

  • Jack moved to America at age 22, after studying design in England
  • After five years of freelance work, he started his own agency
  • 18 months ago, Jack launched his first digital product. Now, he’s making $1m/year.

You might recognize Jack for his impressive graphics on Visualize Value, where he’s built up an audience of 300k across social channels. 

This week, Sam interviewed Jack in an exclusive podcast where they discuss:

  • The economics of agencies and opportunities for new, profitable agencies
  • How to build an online course, including how Sam built a course that made $200k in 30 days (and what Jack would do differently)
  • Courses making $$$ that you wouldn’t guess
  • How Jack plans to turn his course business into a large media company

The pod is only available for Trends subscribers, but you can listen to the first 15 minutes for free, or jump right in

Your $1 trial will get you the entire episode, plus weekly Trends reports and access to our community, full of builders just like and including Jack himself.

Get Access →
Shower Thoughts

  1. Black holes are at the top of the food chain
  2. Horses in movies aren’t acting
  3. The invention of smartphones has probably had a greater impact on how long people take to use the restroom than any other event in human history
  4. Subtitles are mini spoilers
  5. Every pleasure is a guilty pleasure if you’re anxious enough
via Reddit
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Editing by: Zachary “Zack+” Crockett, Al Lowetta (Children’s Music Programmer).

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