Whenever ESPN Goes DTC, Fans will Play A Lot More

On Thursday, The Wall Street Journal created some buzz in media circles by reporting Disney/ESPN's move to DTC has an internal code name “Flagship,” and things are progressing along. But as ESPN CEO Jimmy Pitaro told The Athletic and has repeatedly said publicly, the company has set no firm timeline for the change. The Journal reported as much on Thursday.

Is there a timeline?

In June 2022, Pitaro told The Athletic that there wasn’t a timeline, and that’s partly because the pay-TV bundle still pays the bills. If there is now a date or general timeframe, it has not been disclosed — but it’s realistic to think it could happen within this decade. A lot of current deals would have to be renegotiated.

Streamers are learning on the fly what consumers are willing to pay for, or not pay for, in real time. ESPN+, which launched five years ago, gained 400,000 subscribers to hit 25.3 million in the fiscal second quarter, per Disney’s most recent earnings report, while Disney+ lost 4 million subscribers to fall to just under 158 million.

Within the industry, there’s still debate on whether cord-cutting will level out (about half of the 121 million U.S. TV homes have cable or satellite services) and if streaming will max out at some point. There’s also a reasonable expectation that some streamers will fail or be consolidated. 

Disney has to resolve the tension between having its flagship cable network coexisting with a streaming service — can it deliver the cash (and also the content and technical quality fans expect)? ESPN pays billions in rights fees to carry the NFL, MLB, NBA, NHL, golf majors, college football and men’s and women’s basketball, and tons more. Will a hybrid linear TV and streaming model generate the cash flow to cover the bills?

Significant impact on the sports fan is expected ($30 monthly has been bantered about). Like everything in sports content, it will impact your finances. There will be a monthly price point  to subscribe to ESPN+ and that number will be significantly larger than it is today given the premium inventory that will be available (such as postseason games in college football, the NBA and NHL, etc.) when ESPN makes the full move to DTC. The price point has to be larger because fewer people will be DTC subscribers versus cable.