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Nielsen sticks with subscriber report challenged by ESPN

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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 suggested ESPN lost 621,000 subscribers from a month earlier. Neither Nielsen or ESPN released the numbers publicly, but ESPN questioned the accuracy of the findings.

In a statement on its website, Nielsen said that 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.

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.

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 also 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."

The Nielsen data also showed subscriber losses for several networks across the industry, Wieser said. Overall, median cable network penetration fell by 1.4 percent.

(Reporting by Lisa Richwine; Editing by Lisa Shumaker and Andrew Hay)


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