Disney Bets That ESPN Streaming Service Will Be Additive

Disney is betting that its upcoming live-streaming over-the-top sports service, ESPN Plus, will not lead to any new cord-cutting.

Why? Because the company is launching the service as a complement to its existing channels on TV.

“The service will offer a greatly expanded array of programs and live events for sports fans who want even more content, as well as for fans interested in sports and events not currently featured on the main channels,” Disney CEO Bob Iger told investors on a conference call Tuesday. “We’re actually calling it ESPN Plus, because it's offering an incremental thousands of hours of live sports programming basically to the ESPN experience.”

ESPN Plus will launch in the spring for $4.99 per month -- a price that is significantly lower than Netflix, and intended to entice sports fans to pay extra for more live sports, as well as the full library of ESPN Films. It will live inside of ESPN’s apps on mobile devices and connected TV devices.

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The company says the service will feature MLB, NHL and MLS games, as well as college sports, cricket, bopping rugby, golf and tennis. It will use machine learning to try to surface sporting events the viewer will be interested in watching.

With the emphasis on live sports, it will also be advertising-supported.

ESPN Plus is a big deal for Disney, as it marks the company’s first subscription OTT service in the United States -- one that will be powered by BAMTech, which Disney acquired from Major League Baseball last year. 

Still, as an “incremental” service, as Iger called it, ESPN Plus is unlikely to significantly change Disney’s bottom line. Rather, it is a first dip into the streaming waters, testing the market and the technology for what comes next. 

Disney’s big test -- the product that could define the direction of the company as it relates to OTT video -- will come in “late 2019,” according to Iger.

That is when Disney will launch its second streaming service, featuring Disney films and TV shows, with as many as eight original and exclusive shows and movies launching each year. 

Disney hasn’t said much about that service, aside from that it will have a reboot of “High School Musical,” and that it will be priced substantially below Netflix, to account for a smaller library of content.

Disney is also deciding whether the Disney streaming service will include sponsorships, or will be commercial-free.

1 comment about "Disney Bets That ESPN Streaming Service Will Be Additive".
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  1. Doc Searls from ProjectVRM, February 8, 2018 at 10:26 a.m.

    I'm a sports fan, and ESPN is the only reason I haven't cut the cord on cable. And I'm sure that's typical of millions of other sports fans.

    But this new OTT thing doesn't interest me. It reads too much like a side show. Who are the stars, the personalities? Where's Stehpen A? Wingo and Golic? SVP? Betcha they're not on this thing, or ESPN would be talking them up.

    At some point Disney and ESPN face the fact that OTT is the new bottom, and the world of video viewing will finally become what the Internet wanted it to be from the start: fully unbundled, any-to-any, at trivial connection costs, with some content free and other content costing money.

    That covers the subscription side of things. Advertising will be harder, because the simple fact is that people have always hated ads (except, of course, on the Super Bowl, an irrelevant exception).

    Today it is easy to skip over and around ads on streams and podcasts, so the only place left where people suffer live ads is on live sports broadcasts. But even there many people wait an hour to start watching and skip forward past the ads, expertly. (Time out? Two clicks on the —> button, :30 each. Major break? Four or eight clicks.)

    Some of us now listen to ESPN radio only on podcasts, because the spot breaks are shorter it's easy to skip over them.

    My point: the only final incentive alignment that will work is the one in which ads are minimized or eliminated. This has huge implications for the sizes and influences of sports broadcasters, and finally for the sizes of pro player salaries, most of which derive their heft from all those ads.

    Best to start preparing now for the day of reckoning when what's obvious for viewers and listeners dawns on the supply side of the marketplace.

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