Venu Sports, the new streaming service jointly owned by Disney, Fox, and Warner Bros. Discovery, is set to launch this fall at a price of $42.99 per month. While this may seem expensive compared to other major subscription streaming services like Netflix and Peacock, it is significantly cheaper than cable bundles or YouTube TV. However, Venu’s offering is focused solely on live sports, which may limit its appeal to a niche market of consumers.
One of the challenges for Venu is the uncertainty surrounding its target user base. The service is positioning itself as a product for “cord nevers,” younger consumers who have been hesitant to pay for cable but still want access to live sports. However, it remains unclear whether there are enough of these users willing to pay a high monthly subscription fee for a limited selection of sports content. Many non-cable subscribers are satisfied with watching highlights on platforms like YouTube and relying on influencers for commentary. In fact, a survey by Kantar revealed that 54% of people prefer watching creators break down a major live event rather than watching the event itself.
On the other end of the spectrum, avid NFL fans would need to subscribe to additional streaming services like Peacock and Paramount+ to access a full slate of NFL games. They could also consider using a digital antenna in conjunction with Venu, but antenna usage among younger viewers may be uncommon. Moreover, Venu does not have rights to major sporting events like the Olympics, as NBCUniversal, the broadcaster for the Olympics, is not part of the service.
Another challenge for Venu is the existence of a competing product that may offer a better deal. Echostar’s Sling TV offers a similar lineup of networks, including ESPN, TNT, TBS, Fox, and ABC, along with additional channels like CNN and Fox News, for $60 per month. This is $17 more expensive than Venu but provides a broader range of content with 46 networks compared to Venu’s 14. Sling TV has been facing subscriber losses for several years, with 1.92 million subscribers as of March 2022, down from a peak of 2.7 million in 2019. The company attributes its decline to increased competition from other streaming services.
Given these challenges, Venu will need to convince consumers that it is worth the higher price compared to other streaming options. The service may also face the dilemma of potentially raising prices in the future, as is typical for bundles of live networks. Additionally, Disney is already planning to launch an ESPN Flagship streaming service in 2025, offering ESPN at a lower price than Venu. This further undermines Venu’s value proposition.
Despite these obstacles, the companies behind Venu remain optimistic about its potential success. Fox CEO Lachlan Murdoch has predicted that the service can attract 5 million subscribers within the next five years. However, achieving this goal will require significant investment in marketing efforts, which may be costly and potentially counterproductive.
In conclusion, while Venu Sports aims to cater to a specific segment of consumers who are willing to pay a premium for live sports content, it faces several challenges in terms of market demand, competition from existing services, and the potential for price increases. The success of Venu will depend on its ability to convince consumers of its value and overcome these obstacles in an increasingly crowded streaming landscape.
