Disney CEO calls hypothetical ESPN streaming package ‘ultimate fan product’

On an earnings call earlier today, Disney CEO Bob Chapek sounded like he had a clear idea of ​​the future of ESPN’s full streaming. He told analysts and investors that “it was time to actually pull the trigger” that he believed ESPN could create “the ultimate fan product for superfans who love sports” and that “frankly, I don’t think anyone but ESPN You can pull it off.”

This isn’t the first time we’ve heard Disney executives mention the potential of ESPN streaming — former CEO Bob Iger said in 2015 that it would happen eventually, but it’s expected to happen within five years occurred later.By contrast, Chapek said Disney wasn’t ready share Details of its model, how long it will take to become profitable or the impact of such a shift on its existing cable ESPN business deals, without bothering to include any distant timelines to reassure his cable partners .

The conversation started as an analyst asked what was holding the company back from making ESPN Plus a fully a la carte sports network. In fact, a subscription occasionally offers simulcasts of ESPN’s cable network, as well as some exclusive streaming programming, but for most viewers, it’s not a replacement for traditional ESPN for one big reason: money.

As Chapek acknowledged in his response, traditional linear networks like ESPN and the cable bills that come with it are “huge cash generators” that make Disney reluctant to disrupt existing business models prematurely.

It’s no secret that cable companies are experiencing a not-so-slow collapse in subscriber numbers due to cord-cutting. At its peak in 2010, there were approximately 105 million pay-TV households in the United States. After losing 5.78 million in 2020, their number of subscribers fell by about 5.5 million in 2021, leaving their subscriber base down, according to a report released in March by Leichtman Research Group tracking the largest US cable, satellite and fiber pay-TV companies Figures are in their infancy at around 68.1 million in 2022.

However, he continued, “At the same time, we are very aware of our ability to move more aggressively into the DTC [direct-to-consumer, aka streaming] ESPN’s area, so what we’re doing is putting one foot on the dock and now one on the boat if you will. “

“But what we do know is that when it’s good for our shareholders, we’re going to be able to get full access to the ESPN DTC product, as you describe, and we’re totally confident that there’s a business model out there for us that will allow us to To be able to regain growth on ESPN Plus with full DTC expression.”

With the launch of Disney Plus, Disney has tipped that balance by shifting its focus away from cable channels, similar to the one Warner is doing with HBO and HBO Max. Traditional pay-TV setups (including Disney’s online streaming via Hulu and Live TV) still have too much impact on Disney’s bottom line for Disney to bypass them and make the full ESPN experience its own streaming subscription as it has for years launched, but the point of change is close enough that Chapek is happy to openly embrace the possibilities.


Leave a Reply