Disney unveils new ESPN streaming service for US$30 a month
The industry has been moving towards more packaged deals in recent years, in part because subscribers are less likely to cancel if it means losing multiple services
[NEW YORK] Walt Disney said its new sports streaming platform will be called ESPN, the same as its popular cable-TV channel, and cost US$30 a month.
The new product, unveiled at a media event on Tuesday (May 13) in New York, will give the roughly 60 million US households that do not have a traditional pay-TV package the option of watching the channel’s marquee sporting events such as Monday Night Football, US Open tennis and college football online. The platform is set to go live later this year.
The “unlimited” plan will give fans access to all of ESPN’s traditional TV networks, including ESPN2, ESPNU and others, in addition to ESPN on ABC, ESPN+ and more, covering 47,000 live events a year, on-demand replays and original programming and studio shows including SportsCenter.
“It’s going to redefine our business,” said ESPN chairman Jimmy Pitaro. “Fans have never been able to buy our networks directly before.”
ESPN has been working on the product for more than two years. It will host all of the cable network’s programming as well as experiences related to the company’s daily fantasy sports and sports betting. Disney will also offer the new ESPN as part of a bundle with Hulu and Disney+ for US$36 a month, with a promotional price of US$30 monthly for the first year.
“It will be the ultimate sports destination,” Pitaro said.
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For months, the media and industry observers had been referring to the new product as “ESPN Flagship”, a name that many thought would stick. But Pitaro said: “We kept coming back to those four letters,” as a reason to keep the original moniker.
The company will continue to offer its ESPN+ streaming service, which has programming different from the main channels.
As more viewers move away from cable subscriptions and traditional TV networks, media companies such as Disney, Comcast and Paramount Global are racing to make more sports available for streaming.
Industry observers have long feared that a standalone version of ESPN, the most-watched sports channel, would lead to an even greater wave of cable-TV cancellations. To prevent that, Disney chief executive officer Bob Iger has said customers who already get ESPN through a cable or satellite-TV subscription will also get the streaming version at no additional cost.
But by bundling ESPN with Disney+ and Hulu for only US$6 a month more than the standalone sports site, Disney is clearly trying to steer consumers to the combined offering. The industry has been moving towards more packaged deals in recent years, in part because subscribers are less likely to cancel if it means losing multiple services.
Bloomberg Intelligence analyst Geetha Ranganathan said Disney’s pricing structure hits the “sweet spot” and could boost profit. There could be wide uptake for the new ESPN streaming platform, especially the bundled offering with Hulu and Disney+, she said. “That could generate US$3 billion or more in annual high-margin revenue by 2026 if it garners 10 million subscribers.”
At the event on Tuesday, ESPN highlighted the central role National Basketball Association (NBA) games will play on its upcoming streaming platform. Disney joined Comcast and Amazon.com last summer in signing a US$76 billion media rights deal with the league that kicks off with the new season in October. Comcast’s NBC is also making NBA games a major focus for its Peacock streaming platform.
Disney previously worked with Fox and Warner Bros Discovery on creating a sports streaming joint venture called Venu Sports, which would have pooled content from their networks, including ESPN, and cost US$43 a month.
The planned offering sparked a lawsuit from competitor FuboTV, which argued it would block rivals and raise prices for consumers. Fox is planning to launch a new streaming service combining its news, sports and entertainment content before the NFL and college football seasons this fall. BLOOMBERG
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