The giants have admitted it: The old model of TV distribution could be at an end. Disney said that ESPN programming could go direct to consumers … eventually. According to CEO Bob Eiger, that won’t be happening for at least the next five years.

Ah, that qualifier.

And not at a good time. Bloomberg media analyst Paul Sweeney, on being asked if Disney was in trouble over ESPN’s performance, said that it might not be the “consistent growth driver for Disney has it has been over the last five to ten years. … The reality is that consumers are cutting the cord [on cable and satellite TV] on the margin. There are people that are not signing up for pay TV pages.” It’s affecting all TV companies, including ESPN, Disney’s major printing press for cash.

Why does Eiger think that he has at least five years? Because Disney has embraced the Innovator’s Dilemma, a Clayton Christensen concept in which a company’s leaders focus on what protects today’s gravy train rather than put resources into a new idea for the future. Disney’s eyes are on a current cash cow.

But that leaves an enormous opportunity for someone to disrupt the industry. How do you take on ESPN in sports? As is true for all cases of big companies being protective of their old way of doing things, you find the niches they don’t cover well or services they are reluctant to offer and go after appropriate audiences.

Netflix made its name by sending movie DVDs directly to customers so they didn’t have to travel to a store and, most importantly, wouldn’t face late fees. You see Uber gaining a massive valuation by finding ways to provide ride services in ways that work better for many consumers than traditional taxi companies.

In the case of covering sports, for example, an entrepreneur might start covering secondary sports at major schools, with highly active alumni, so they can follow along. That might include getting student stringers to monitor games, getting video and offering it to subscribers, and possibly working with the athletic and alumni departments in return for a royalty cut of associated revenue. Or you might work with the next size of school down, which still means alumni who want news but where there is little to no coverage by sports organizations in print, on the Web, or on TV. Start with one school and expand out to others. Remember, Facebook started only at Harvard. Focus on women’s college sports, which are so overlooked and have a natural audience. Or come up with something totally different that has even more promise.

Every time a major company shies away from embracing the future, it invites entrepreneurs to build innovate businesses that one day might put the giants out of business, or force them to acquire the upstarts.

Published on: Aug 4, 2015