Sports fans get quite a bit when they pay $6.99 a month for Disney’s streaming service ESPN+, including 75 exclusive NHL games, college sports from 20 conferences, MLB games, and exclusive original shows such as “Peyton’s Place.”
But you most certainly don’t get everything that airs on ESPN (DIS). You still need to sign up for a cable package for that.
Sporting events are one of the few things that people still tune in to watch live when they air. On the other hand, people generally prefer to watch sitcoms and dramas on their own schedule.
There’ve been whispers, or at least educated guesses, for a while that Disney might one day put all of its sports offerings on ESPN+, turning it into a direct-to-consumer service. Because Disney has likely been reluctant to lose cable subscription fees, the company hasn’t pulled the trigger on making the full transition just yet.
But in a recent first-quarter earnings call, CEO Bob Chapek hinted that an all-in ESPN+ streaming service was more or less inevitable, even if he didn’t provide a time table for when the change might happen.
Disney Is Experimenting With ESPN+
On October 30, ESPN+ will air the Denver Broncos and Jacksonville Jaguars matchup, the first time it’s ever had a NFL game.
In the earnings call, Chapek hinted there might be more where that came from, as Disney has an eye towards bulking its streaming service up.
“We’re very conscious of our ability to go more aggressively into the DTC area of ESPN,” he said. “And so what we’re doing is sort of putting one foot on the dock if you will, and one foot on the boat right now.”
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The Catch
If you have Disney+, you automatically get almost every cartoon and film airing on The Disney Channel. (But there are a few gaps, for various reasons.)
That’s not the case with ESPN+, however. The main issue that keeps the company from going all in, as noted by Deadline, is that “the economic returns on streaming are much more uncertain than in pay-TV.”
In the earnings call, Disney reported that its networks ABC and ESPN earned $2.8 billion in the quarter that ended April 2, 2022. Most of this money was from the subscriber fees ESPN charges cable companies.
Disney will be very reluctant to lose those lucrative fees by making an ESPN subscription redundant, especially as its streaming service isn’t quite making that level of money, and per the earnings call, is dealing with higher production costs for its various shows.
But Chapek also hinted that the transition to an all-inclusive streaming option in more or less inevitable, as that’s the natural direction the television industry is heading. He didn’t give any kind of time, however.
“We know that at some point when it's going to be good for our shareholders, we'll be able to fully go into an ESPN DTC offering,” he said. “And we fully believe that there is a business model there for us that's going to enable us to regain growth on ESPN+ in a full DTC expression.”
