ESPN Will Soon be a Full-Blown Streaming Service

(Photo credit: Tech Daily/Unsplash)
(Photo credit: Tech Daily/Unsplash)

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The shot clock may be rapidly counting down for cable TV, and ESPN isn’t waiting around to hear the final buzzer.

The worldwide leader in sports is planning to offer its flagship cable channel — a.k.a. the last thing tethering sports fans to an $80-a-month relationship with Comcast or Spectrum — as an a la carte streaming service, according to a Wall Street Journal report on Thursday. But is the move actually a bunny shot?

Disney Goes Digital

Wait, can’t ESPN already be streamed? And what the heck is ESPN+? The answer is yes, and it’s complicated. Sports fans can already watch a streaming simulcast of the ESPN cable channel, but only via cable company logins. ESPN+, meanwhile, is a separate standalone service that runs $9.99 a month and gives subscribers access to paywalled articles on as well as livestreams of some sports, like golf events and overflow college athletics, with major leagues such as the NBA and NFL mostly keeping their games siloed to the cable network. The new service, internally dubbed project “Flagship” according to the WSJ, would deliver those primetime goods.

The pivot seems well-timed, if not overdue. The cable network has steadily lost steam since peaking with roughly 100 million subscribers in 2011. That’s down to just 74 million as of last September. It’s no wonder Bob Iger has long prepared the company for an inevitable full migration to streaming; while the cable network would still exist, project Flagship would be a major step on that journey.

Still, in recent days Iger’s been laser-focused on both monetization and costs. Disney’s streaming push thus far has been defined more by the latter than the former — the House of Mouse has sunk some $4 billion into streaming costs in the last year alone — and live sports, and the hefty rights fees associated with them, aren’t exactly guaranteed to make those books look any better:

  • Apple, Amazon, and Google (via YouTube) have struck multi-billion dollar deals with the MLB and NFL to stream their games. But big tech is “not part of the traditional media ecosystem,” Jamie Lumley, sector analyst at Third Bridge Group, told The Daily Upside — these companies don’t have to perform Disney’s balancing act of future-proofing without “cannibalizing an existing revenue base.”
  • “This model is hard. Sports rights are expensive,” Lumley said. “The seasonality of what leagues people are interested in leads to higher degrees of churn.”

Slam Dunk: The news adds an interesting wrinkle to the network’s looming rights negotiations with the NBA. The league has been aiming for a rights package north of $70 billion, according to CNBC, for a deal that would begin in the 2025-2026 season. And now the NBA may have even more leverage. Its playoffs are currently underway, and have thus far delivered some of the league’s best ratings in over a decade. Iger better lace up.