This comes even as Netflix -- viewed as a major competitor to Disney+, Disney’s forthcoming streaming business -- gains subscribers -- around 2 million more in the U.S. and 9.6 globally.
On CNBC, Tom Rogers, former NBC and TiVo senior executive, said one should remember this as traditional TV media companies, like Disney, see cord-cutting declines for cable networks, anywhere around 2% to 3% a year.
“In one quarter, Netflix added more subs than ESPN+, the OTT platform is likely to have in five years. In one year, [Netflix] is likely to have more subs than Disney+ will have in five years,” he noted.
By 2024, ESPN+ expects subscribers to grow between 8 million to 12 million, from 2 million now.
Rogers says the key issue is the dynamic: How fast Disney can build up its streaming business, while seeing declines in its traditional legacy business. In five years, Disney estimates it can get to a decent 90 million globally for its Disney+ service.
But what the company didn’t disclose is where its networks -- especially ESPN on legacy cable, satellite, and telco systems -- will be then.
Could ESPN’s 86 million subscribers (at the end of 2018) sink to say 60 million? To Rogers’ point, what happens to Disney — it may lose around $15 to $17 a month in collective license carriage fees per subscriber from all its pay TV providers.
Consider this: What happens to Disney when it comes to Hulu -- where it now has around a 66% equity share of the company with 33% equity at Comcast Corp.? Factor in the recent deal with AT&T’s WarnerMedia selling back its 10% stake to Hulu?
He wonders what restraints Comcast might put on Disney, looking to change Hulu’s business, which includes global expansion.
Comcast might also have a problem with Disney’s plan to package Hulu, along with Disney+ and ESPN+ in creating a new kind of mini-cable-like TV network bundle to sell to consumers. He doesn’t know whether Disney will get the go-ahead from Comcast if there is a “detriment, in any way, of the partnership service.”
The big picture is that the overall U.S. economy in coming years -- not just with growth prospects for new OTT platforms, but declining legacy businesses. How bad will linear TV erosion get? ask Rogers. There is an added concern — a possible/probable U.S. recession.
TV disruption -- of linear TV and new digital OTT platforms -- will then play a whole new ballgame.