ESPN’s cable channels have become so desirable for traditional TV providers that the company can charge $10 per month per cable subscriber, regardless of how much they watch the sports network.
That places the Disney-owned network in a perplexing position as it grows its streaming network ESPN+, which costs $6.99 per month (or $69.99 per year): The company loses money any time a customer swaps a cable subscription for ESPN+.
- ESPN+ had 14.9 million subscribers as of July 3. Disney’s direct-to-consumer revenues hit $4.3 billion in its fiscal third quarter, but the segment still took a $300 million loss.
- Disney is folding its Hotstar network into ESPN+ and Hulu in the U.S. (while keeping it separate in India).
- ESPN is seeking to license its name to a sportsbook in a multiyear deal worth at least $3 billion.
Disney CEO Bob Chapek has floated the possibility of one day combining its three main streaming networks — Disney+, ESPN+, and Hulu — into a single offering. The services are already available together in a $13.99-per-month “Disney Bundle,” which Chapek said has “worked really, really well.”
How Disney proceeds may depend on how quickly people abandon cable for streaming services.
The NFL, weighing those same factors, included opt-out clauses in its 10-year, $113 billion media deals struck earlier this year. It can end its deals with CBS, NBC, and Fox after seven years, and with ESPN after eight years.
