Disney, Fox, and Warner Bros. Discovery will launch a massive joint streaming service this fall that’s focused on sports — only it will also include “Abbott Elementary,” “The Simpsons,” as well as “Charmed” and “Friends” reruns, and everything else that’s available on the live feeds that service the unnamed streamer.
While many of the feeds are 24/7 sports like all the ESPNs, the SEC Network, and the Big Ten Network, two individuals with knowledge of the process tell IndieWire that streamer can’t cherry pick. It must take the entire TV schedule for all feeds — which include broadcast networks Fox and ABC, as well as cable channels TNT, TBS, and truTV.
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That said, it doesn’t mean you’ll necessarily be able to find them. Our sources told us that the channels’ entertainment content will be available on the same schedule as linear but only in a certain corner of the platform. Translation: They’re going to bury it.
There are no plans to provide on-demand access to the entertainment content, or to surface it within the user experience: The partners don’t want to muddy the service’s mission and Disney probably does not want to do Hulu like that.
As to how much all of this will cost, analyzing the hints and professional guesses suggest a range of something like $30 to $60. On his Wednesday earnings conference call, Disney CEO Bob Iger said the new service will be “substantially less expensive” than it would cost to subscribe to each channel separately.
Let’s do the math. ESPN+ as a standalone service is $10.99 per month. A cable TV bundle of 100-plus channel that includes most of the sports streamer’s 14 linear channels (ESPNEWS and ESPNU are hit or miss, regional networks are regional) costs $50-$60/month via Comcast’s Xfinity. Other comps: Disney’s Hulu + Live TV starts at $76.99 per month and YouTube TV begins at $72.99.
Paul Verna, VP content at market research company Insider Intelligence, estimates the new streamer will cost $40 per month at launch, “keeping with Disney’s past practice of starting low to build a critical mass of subscribers, as it did with ESPN+ and Disney+.” But there’s “a catch,” Verna told IndieWire. (There always is.)
That rate will not make the service profitable, so Disney, Fox, and WBD will “end up doing what every other streaming service has done,” Verna said, “raise prices repeatedly, sometimes by large margins.” Within a few years, Verna sees it being in “the $60 range.”
Rosenblatt Securities analyst Barton Crockett is a bit more optimistic. In a Wednesday note to clients (obtained by IndieWire), he predicted the new streamer will cost “in the ballpark” of $29.99 per month at launch, the same as the NESN regional sports network’s streaming option, NESN 360. There’s also News Corp. sports streaming service in Australia, Kayo, which costs $16-$20 USD.
This week’s announcement caught everyone by surprise — including the NFL and the NBA, which were not even aware that this service was in the works.
“While we look forward to learning more about this new venture, we’re encouraged by the opportunity to make premier sports content more accessible to fans who are not subscribers to the traditional cable or satellite bundle,” the NBA said in a statement provided to IndieWire.
“We’re aware of yesterday’s announcement and are still gathering details to understand this proposed new streaming service,” the NFL said.
In potential damage-control mode, both Iger and Murdoch spent time on their respective Wednesday earnings calls downplaying what the new service could do to the Comcasts of the world. Sports has been the scotch tape that barely holds together the linear-TV bundle in the streaming era.
On the Fox call, News Corp. chairman Lachlan Murdoch said the marketing of the new platform will be “entirely” focused on “cord-nevers,” the (usually) young adults who didn’t cut the cord because they didn’t have one in the first place. Murdoch says about half of all households in America (60 million-plus of roughly 125 million) are “not within the traditional bundled-cable ecosystem,” and that the new service can serve those “without undermining the traditional bundle.”
“We remain the biggest supporters of the traditional pay-TV bundle,” Murdoch said.
Oh stop it, said Wells Fargo. (Basically.) The Disney/Fox/WBD sports service will clearly be “bad for linear,” equity analyst Steve Cahall wrote in a note to clients. Cahall believes the new service will cause the already-speedy rate of cord-cutting to accelerate 2 percent faster each year, through 2027.
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