The media industry is buzzing with excitement and uncertainty as Disney, Warner Bros. Discovery, and Fox announce their new joint venture to launch a sports streaming bundle this fall. This unprecedented move by the three companies has left many media executives scrambling for answers and trying to understand the potential ramifications of this collaboration.
The motivation behind this joint venture is clear – these companies are looking to leverage the popularity of sports to drive streaming profits. By offering access to all the networks owned by these companies that carry sports, along with Disney’s ESPN+, they hope to cater to sports fans who don’t subscribe to traditional cable bundles. However, there are several key questions and considerations surrounding this new product.
One of the main concerns is the audience for this sports bundle. While it could be a major concern for the largest pay TV operators like Charter, Comcast, and DirecTV, the actual impact on these companies is still unclear. It’s possible that some percentage of people who sign up for the sports bundle will cancel their traditional cable subscriptions in favor of the new, cheaper alternative. The price for the new product hasn’t been determined yet, but sources suggest it will be higher than $30 per month. However, it remains to be seen if consumers are willing to pay around $40 a month for live sports when many Americans have already canceled cable due to the high cost.
Furthermore, the joint venture doesn’t include networks like NBC and CBS, which broadcast a lot of sports, including the highly popular National Football League. This means that consumers may feel the need to add on additional services to access all the sports they want, increasing both cost and hassle. Additionally, ESPN is planning to launch its own direct-to-consumer offering, which could potentially draw away subscribers from the new sports platform.
The implications of this new venture extend beyond just sports. Traditional pay TV still has about 70 million subscribers, and one of the reasons it has survived is because it offers exclusive live news and sports. With the emergence of a cheaper way to access most sports, cable news networks like Fox News, CNN, MSNBC, and CNBC may face the risk of losing subscribers. This could potentially lead to news networks offering their own skinny news bundles as a response to the new sports bundle.
While this joint venture may seem like a win for Disney, Warner Bros. Discovery, and Fox, there are tradeoffs and risks involved. Warner Bros. Discovery has unbundled some of its networks from the rest, which may put many of its old Discovery networks at risk. Fox, on the other hand, may still be needed by cable providers to cater to its dedicated fan base. Disney’s flagship ESPN streaming service may also face competition from the new sports offering, potentially diminishing its appeal.
The structure of this joint venture also reflects competitive dynamics within the industry. The absence of Paramount Global and NBCUniversal is seen as a subtle jab from Warner Bros. Discovery CEO David Zaslav, who may be interested in merging with either or both companies in the future. This move could give him leverage in future merger discussions if the sports platform proves to be successful.
Overall, the launch of this new sports streaming bundle has sparked excitement and uncertainty in the media industry. It remains to be seen how many people will subscribe to this platform and what its impact will be on traditional cable bundles, news networks, and other streaming services. Only time will tell if this joint venture will be a game changer or just another addition to the ever-evolving streaming landscape.
