ESPN Laying The Groundwork For Its Own Streaming Platform

According to the Wall Street Journal, ESPN recently announced its plans to launch a stand-alone streaming service. Disney, the parent company of ESPN, has hoped for many years the worldwide leader would eventually grow into a stand-alone media entity. Those hopes have now materialized into Project Flagship; this project is ESPN’s plan of attack to respond to cable television’s cord-cutting demise and ultimately transition its consumers to their streaming service. Disney’s CEO Robert Iger acknowledges the upside stating, “It’s a huge decision for us to make, and we know that we’ve got to get it right both in terms of pricing and timing.” 

Tech companies such as Apple, Amazon, and Google have taken big swings in obtaining sports media rights. Apple has streaming partnerships with Major League Baseball and Major League Soccer. Amazon Prime partnered with the NFL to stream Thursday night football games. YouTubeTV is offering NFL Sunday Ticket packages to customers. The sports media consumer of today values personalized experience and convenience. Even professional sports teams such as the Phoenix Suns and Phoenix Mercury are partnering with a technology media company Kiswe to create a direct-to-consumer platform for its fans and sever ties with its cable partners. ESPN intends to maintain its relationships with its television networks; however, it must focus on streaming to remain competitive. 

Growing Pains

It was reported that Disney suffered a tremendous loss from traditional television networks like ESPN in their most recent quarter, as their income decreased from $2.8 billion to $1.8 billion in the past quarter. In addition, the number of households that have a cable package or subscribe to an alternative digital platform is down roughly 10%. The  Wall Street Journal reports ESPN is getting nearly $9 off of every cable bill; however, this means that the bulk of the weight falls on the shoulders of the cable customers who may not be interested in sports but have to pay for ESPN as part of their cable package. 

ESPN launched its monthly streaming platform ESPN+ in 2018; ESPN+ typically airs a mixed bag of golf, baseball, and hockey games but has never given users full access to the ESPN channel network on the platform. One of the more exciting things to monitor as the flagship streaming project commences is how ESPN will price this offering. Networks like MSG that air New York Knicks and Buffalo Sabres games charge a $30 streaming subscription service, the same for the New England Sports Network, which shows New England Patriots games charge $30 for streaming. If ESPN’s price point is within the $30-$40, and they offer the opportunity to stream games and share original content, it will reclaim pole position within the streaming landscape.

Ponder On This 

There is no date on when ESPN’s streaming platform will be live. However, their timing must be calculated to ensure it serves its most valuable media properties. When you factor in things such as the NBA media rights deal coming up, the NFL adding more games, and conference realignment taking place where conferences like the SEC are tied to ESPN and will be bringing in two of the top college football brands in Oklahoma and Texas, not to mention the Big Ten’s media rights deal expanding over multiple networks. In addition, Disney and Ally partnered with the ACC to invest more in women’s sports. ESPN will have its hands full crafting this platform to be financially competitive and captivating enough to convert. If they are successful, it will put pressure on other streaming competitors.