Commentary

Media's Content Race: Walt Disney Pushes Streaming, Sports

Six years ago -- November 2015 -- Walt Disney disclosed ESPN's traditional TV subscriber losses, which caused major alarm bells to ring among media analysts.

And then, the usual speculation popped up. Perhaps Disney would be considering a possible spinoff or sale of its sports TV network -- perhaps the biggest revenue generator of any U.S. cable TV network.

A recent report suggested this issue may be considered again. The market response? No response. That’s because plenty of spinoffs occur for distressed businesses. But is this really one of them? Disney representatives reached by TV Watch had no comment.

Can’t blame anyone here for this shrug of the shoulders. Disney's actions over the last couple of years -- especially with the launch of all Disney streaming platforms -- says otherwise.

Instead of looking to sell, spin or whatever, Disney doubled down -- especially with the launch of ESPN+, a key piece of the Disney bundle: Disney+, Hulu, and ESPN+, now priced at $13.99 a month.

ESPN+ now has 15 million subscribers. MoffettNathanson Research projects 20 million to 30 million subscribers by 2024, with profitability coming in 2023.

This comes as Disney continues to keep buying into major sports TV properties for ESPN.

Recently, it just signed another mega multiyear billion-dollar deal with the NFL -- one that allows it to put games on the ABC Television Network, including two Super Bowls. It also has signed a new NHL, as well as other properties.

So why would Disney look to jettisoned ESPN? If there was a moment to do this -- at all -- it was six years ago, when there was greater concern about the health and future of the traditional linear TV industry.

Now, more than a few media analysts are shifting their attention to Disney+ -- and its prospect for growth -- as the main driver for Walt Disney’s direct-to-consumer plans. Specifically, they worry Disney needs to dramatically ramp up content production to compete with Netflix and other premium TV-video spenders.

All this is in contrast to ESPN, which continues to spend with the addition of sports content -- including multi-year deals with Major League Baseball, SEC football/basketball and Wimbledon. Sports isn’t going away in this new digital age of streaming.

Consider this: Business-wise, media/entertainment content leverage is still a big thing almost everywhere — whether it’s film in theaters or at home on a streaming platform, TV network or theme park.

Who really wants to give up that advantage?

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