Is this ESPN's Blockbuster moment?

Articles have been sounding the death-knell of ESPN for years now. Most have been premature, of course, due to the same microwave mentality that thinks Netflix overtook Blockbuster immediately upon debut when it fact the decline was much slower than people realized. For instance, Blockbuster was still powerful enough in 2000 to turn down an acquisition offer by Netflix, who at the time was a three year old company that had only just announced plans to go public. With the dot com bubble burst fresh on everyone's mind, many were nervous. In addition, Netflix wasn't profitable. . It would go on to have major success of course, but Netflix didn't hit its stride until 2007, a full decade after its inception. Meanwhile, Blockbuster wouldn't file for Chapter 11 until 2011.
But now it does seem like ESPN is finally having its Blockbuster moment of demise. They are still clinging (at least publicly) to a cable business model that is eroding before our eyes with ever-growing speed. ESPN lost 3.2 million subscribers in a little over a year, and since July 2011, has lost 7.2% of its subscribers.
With yearly licensing costs going up by the NBA et al, ESPN is stuck between a rock and a hard place. They have to pay more for exclusive broadcasts to an audience that is cutting the cord, unbundling, or just plain not watching sports anymore (save highlights on websites). Rather than embrace the change (or if not embrace, at least figure out a solution) they act like they are fine. If ESPN is Blockbuster Netflix is in this case, regular people. The way we consume media and entertainment has changed, no doubt about it. But it's changed as much out of new technology as it has our desire to save money. The news came out that despite our cable package, we pay more for some channels and less for others. ESPN costs $6.61 per household, which is the most, while USA networks cost just $0.83. Big difference, right?
ESPN has more to lose than gain by ignoring the changing winds. But at this point it's like it wants to keep the status quo while dealing with the inevitable. For instance, ESPN is owned by Disney who back in November touted a 12% profit raise thanks to ESPN's strong ad sales. However, only one month before that news, ESPN planned to lay off 300 employees, or nearly 4% of its staff. They made a similar move 2 years ago, as well. In this instance, ESPN's president John Skipper said the company would be looking into “integrating emerging technology into all aspects of our business,” as well as “enhancing our sales and marketing efforts with new tools and techniques,” and “integrating our distribution efforts to better serve current and future distribution partners.”
So ESPN faces an audience that is changing its viewing habits, paying through the nose for long-term rights its sports broadcasts and cable companies who are even more desperate to keep the status quo. If they raise their rates per household subscriber, that means your cable bill goes up, which will only escalate the cord-cutting.
Another problem across the board is that ad sales are down. ESPN's sizable audience can't make up for ad sales, even as rumor has it, the company saves a ton by not paying the on air talent and athletes who star in their ads.
ESPN is an important example of a company trying to deal with what looks on the surface as a rapidly changing landscape, but is in reality something that moving at a more moderate pace. Cord cutting began in earnest nine years ago. Who was responsible for it? Netflix. Still, if Netflix is the success story and Blockbuster is the cautionary tale, ESPN and other cable companies will have to start adapting in earnest, lest they wake up to discover their audience has reached its nadir before they had time to do anything about it.