While the idea ESPN Disney CEO: How to offer a stand-alone streaming offer has been talked about for years. Bob Chapek delighted with the script and describe it as an inevitability during a quarterly call about the company’s profits.
“This will be the best offer for fans,” he said in an interview with Wall Street analysts. “It’s going to appeal to superfans who really love sports, and I think no one but ESPN could, frankly, do it. We don’t have much specifics when it comes to structure, but we believe in it because sport is so powerful – in fact, in the last quarter, 46 of the 50 most watched programs on linear television were sports. ” Sport is also “a third of our domestic offerings,” he added. “Now it’s a statement through the pack and I think it could be very strong for us in the future.”
On several occasions analysts while discussing the results of the second quarter of the financial question on how such a shift in ESPN’s focus could affect its finances, Chapek declined to offer any preliminary analysis. Despite this, he has also expressed more pronounced optimism than he or his predecessor Bob Eiger in recent years. Chapek used the phrase “when it comes time to actually pull the trigger” (as opposed to “when”), but also warned: “We are not ready to share the features of our models in terms of how it will take for us to achieve profitability on this or impact which it will have on our line business ”.
In fiscal year 2021, which ended October 2 last year, Disney is disclosed in an SEC statement that ESPN’s traditional subscriber base has shrunk by 10% over the previous year to 76 million households. Given the industry’s projections that when at least 5 million pay-TV subscribers discontinue their service in 2022, cord trimming remains a major challenge for media companies as they look forward to broadcasting.
In its earnings report for the second fiscal quarter, Disney painted a rosy picture of the ESPN + streaming service, which jumped 62% year-over-year to more than 22 million subscribers. During the quarter, it raised an average of $ 4.73 per subscriber, up 4% from the previous year.
While some programs with linear ESPN are also implemented on ESPN +, so far streaming has been positioned as an additional offer and the price has been accordingly. The company is hesitant to get rid of the balloon, which is gradually descending, by making a full-fledged offer with high-profile live rights, although competitors such as Amazon and Apple are increasing their sports odds.
However, the economic benefits of streaming television are much more uncertain than those of pay-TV. ESPN, which was one of the first cable networks to charge for transportation back in the 1980s, set the standard for programmers who charge operators, while increasing significant advertising revenue. This double revenue stream has created one of the most lucrative business models in any industry.