Disney will launch an ESPN-branded sports streaming service early next year that will feature roughly 10,000 events from Major League Baseball, hockey, soccer and tennis, as well as college sports.
The media giant announced the subscription-based service Tuesday alongside a slew of other updates that stemmed from its quarterly earnings report and a $1.58 billion investment in BAMTech, a technology and video streaming company previously owned by MLBAM that Disney now owns via a majority 75 percent share. The company also announced a Netflix-like streaming service for non-sports content, due in 2019.
While prices for the ESPN service were not disclosed and Disney has yet to give it an official name, the company did provide a few details as to what this service might look like, describing it as a “robust multi-sport package” that would be available through an enhanced version of the ESPN app with features that would enable subscribers to add layers of customizability.
“We’ll fully integrate the new subscription service into the same app as part of our strategy to create the premier digital destination for sports,” said Disney CEO Bob Iger on a Tuesday earnings call with analysts. “Ultimately, we envision this will become a dynamic sports marketplace that will grow and be increasingly customizable, allowing sports fans to pick and choose content that reflects their personal interests.”
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The vast majority of the 10,000 live events will be comprised of content that ESPN and BAM already license. Pay-TV ESPN subscribers will be able to access ESPN television network programming in the same app, while individual sports packages, including MLB.TV, NHL.TV and MLS Live, will be available for purchase.
“It looks pretty similar to the app that you’ve got now, except it can do a lot more,” said Iger. “It’s basically one-stop shopping for the consumer and it’s one-stop shopping for us in terms of our ability to manage the consumer that wants to consume sports through ESPN.”
From a business perspective, the enhanced app, backed by BAMTech’s complex platform technology, enables Disney to funnel all of its subscribers through one platform, giving it an ability to more easily sell them on new products, to scale the service, and to use data collection to send customers targeted ads while helping to personalize their experience.
“When you think about live sports and how much a sporting event live is consumed basically concurrently by the masses, you need a very, very robust technology platform to serve that. BAM is the only one out there that has that,” said Iger.
This service comes amid a rough few years for ESPN, with the advent of digital media and direct-to-consumer offerings weighing on subscriber growth. ESPN shed roughly 12 million subscribers from a peak in 2011 to early 2017, according to Sports TV Ratings.
Earlier this year, the sports network let go 100 people, which included well-known analysts and “SportsCenter” anchors. That followed roughly 300 ESPN layoffs in 2015.
Iger started to hint then that the company’s recent investments in streaming and previous $1 billion investment in BAMTech would start to turn things around, saying that “substantial growth” of ESPN content on services such as Sling TV, Hulu with Live TV, PlayStation Vue, DirecTV Now and YouTube TV, had executives at the network “bullish on the future” of nascent TV offerings, and that on a per-subscriber pricing standpoint, the new services are “just as valuable” to ESPN as traditional platforms.
(Photo by Joe Faraoni / ESPN Images)
Defending the brand further on a call with analysts on Tuesday, Iger said that the ESPN brand remains “very strong,” calling it a “high-quality service” that he believes is “very much in demand from consumers.” While he said the new streaming service is in part a reflection of the new competition from digital media companies, he insisted this is not totally a reactionary move.
“It obviously has suffered a bit from the overall impact of digital technology and new forms of media consumption on the ecosystem. One of the reasons that we’re doing this is because of the trends that we’re seeing,” he said. “But another reason that we’re doing it is because of the strength of the brand and the opportunity that this technology and the consumer trends that the technology has created are providing. It’s not just a defensive move, it’s an offensive move.”