• by Wayne Friedman , Yesterday

While Walt Disney has run a high-profile, wall-to-wall marketing and public relations campaign for its crucial new ESPN direct-to-consumer (D2C) service, analysts are not expecting a high volume of new consumers for the brand.

Richard Greenfield, media analyst of LightShed Partners, estimates that by year’s end ESPN will pull in around two million new subscribers. At the same time, he believes the new Fox Corp. Fox One streaming service -- launched on the same day -- will add a similar number.

Another analyst, Peter Supino of Wolfe Research, predicts ESPN will add 1.75 million D2C subscribers in 2025, growing to three million new subscribers in 2026.

ESPN cable TV is estimated now at 61 million subscribers -- down around 23 million from its 2020 level of 84 million. Like nearly all U.S. TV networks, ESPN has witnessed severe subscriber declines due to cord-cutting. 

ESPN will make a slow financial transition to streaming from linear TV, according to analysts, partly due to its “authentication” moves with the launch of the service.

That means existing ESPN cable TV subscribers, through their pay TV providers (cable, satellite, telco, or virtual, will get the new ESPN streamer at no cost.

But Greenfield warns that not all ESPN traditional pay TV subscribers will be initially able to get ESPN DTC -- only 28% of ESPN’s total legacy pay TV subscribers.

This includes subscribers from Charter Communications, DirectTV, and Disney-owned Hulu and Fubo, where Disney is soon to be majority owner.

Other major pay TV distributors are yet to sign on -- including Comcast, YouTube TV, and Dish Network/Sling TV as well as Cox Communications -- which Charter has struck a merger agreement with.

ESPN's slow start to its big, all-in streaming service will also be affected by its sky-high $29.99 price tag, even as Disney has provided multiple initial promotional bundling efforts with Disney+ and Hulu, as well as a separate one with Fox One – to lower overall pricing.

Robert Fishman, media analyst of MoffettNathanson, believes ESPN's recent $3 billion deal to buy the NFL Network and other NFL assets can add big value to streamer ESPN.

Placing content from NFL Network, NFL Fantasy Football (a sports wagering platform), and the NFL Red Zone Channel “can accelerate subscriber uptake from launch and drive incremental engagement across Disney’s broader DTC portfolio.”

Many analysts believe the new ESPN is essentially replacing the limited sports content on ESPN+, which will gradually sunset its business with the new ESPN.

For the long term, Supino projects nearly $3 billion revenue potential for ESPN -- if it gets 40% of ESPN+ stand-alone subscribers to upgrade to the full ESPN D2C offering.