Disney Bullish on ESPN Digital

11 May, 2017 By: Erik Gruenwedel

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ESPN, the brand synonymous with pay-TV, has been at the center of market changes, including declining subscribers (about 12 million in six years) and layoffs.

As a result, corporate parent Disney has moved to make the sports network a cornerstone of burgeoning online TV, including Sling TV, PlayStation Vue, DirecTV Now, YouTube TV and Hulu Live With TV, among others.

Speaking on Disney’s fiscal call, CEO Bob Iger said the digital push underscores the fact that about 80% of ESPN monthly viewers access the network via portable devices. He said the network’s mobile apps reach a monthly audience of about 23 million unique users who collectively spent more than 5.2 billion minutes engaging with ESPN on those platforms during the quarter.

“Consumer response to these offerings is very encouraging,” Iger said.

ESPN digital access represents a small part of the premium TV universe — the latter an ongoing cash cow. Indeed, ESPN now charges distributors $7.21 monthly per sub — the most expensive in pay-TV. Iger contends that revenue stream can be replicated online.

“From a per-sub pricing standpoint, these new services are just as valuable to us as traditional platforms,” he said.

Disney-owned BAMTech, which backends digital offerings by Major League Baseball and the National Hockey League, plans to launch a ESPN-branded streaming service later this year.

At the same time, ESPN's primetime TV audience in the quarter was up 15% year-over-year, and the inclusion of out-of-home viewing and WatchESPN lifted that audience by another 10%. ESPN also delivered its largest first-quarter primetime audience in five years, according to Nielsen.

“While we're clearly excited about our success on new platforms, live sports continue to draw huge audiences to TV,” Iger said.
 

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