In what Disney CEO Bob Iger has hailed as potentially the biggest move in nearly four decades for ESPN, the network has officially announced that all of its programming will be offered to consumers for $29.99 per month without the requirement of a traditional cable or streaming subscription.
The direct-to-consumer platform will be called “ESPN.” The company did not announce a formal launch date for the service. While the service will still be available through cable, satellite and platforms like YouTube TV and Fubo, fans won’t need those to receive big-time events coverage like “Monday Night Football,” the NBA, college football’s championships and all of the network’s games and shows.
“It’s going to redefine our business,” ESPN chairman Jimmy Pitaro said at a press event in Manhattan on Tuesday.
If a fan subscribes to the main ESPN in any fashion — from the standalone ESPN direct to consumer or cable — they will receive all of the programming from ESPN, ESPN2, ESPNews, ESPNU, its college league networks, as well as ESPN+ and any games on ABC.
For the first 12 months, ESPN will bundle the full platform with Disney+ and Hulu for $29.99. After that, ESPN said the trio will cost $35.99.
Pitaro said the new app will have enhanced betting, statistics and a personalized “SportsCenter,” among added features.
Iger, who made his comments at the CAA World Congress of Sports last week, said that ESPN’s direct-to-consumer offering “might be the biggest move since getting the full season of the NFL” for the network. In 1987, ESPN, just eight years old at the time, acquired rights to “Sunday Night Football.”
This deal, along with its MLB, NBA, NHL and college sports deals, allowed it to create one of the greatest business models in media business history. As cable grew to the point that ESPN had 100 million subscribers by 2011, operators charged customers what is now more than $10 per month for ESPN. This combined with advertising made it routine for ESPN to have more than a billion dollars in revenue monthly.
However, in the digital age, with competitors like Netflix, Amazon Prime and others, subscribers — especially those uninterested in sports — have either cut the cord or, in the case of a younger generation, have never even considered adding cable or a cable-like system. In the old setup, which had benefits for big and small channels, ESPN reigned supreme, as it was on the basic tier, meaning anyone with cable was paying for ESPN even if they never watched it. At the end of last year, Nielsen reported that ESPN had 65.3 million subscribers.
In a digital environment, ESPN will try to see if a sports-only streaming service can work. The network already began a new platform called ESPN+, which had extra programming and was anchored by putting a small number of select NFL and college games on the platform, as well as top UFC fights. ESPN+ began in 2018 and currently has 24.1 million subscribers, which was down three percent compared to last year.
ESPN will still offer ESPN+ as a “select option” for $11.99 per month, partly because it has pre-existing deals for the existing service.
With the new service, ESPN’s goal is to first stop the declining subscriber base and then grow. While the network has re-upped with the top leagues in sports, earlier this year MLB commissioner Rob Manfred described the network as a “shrinking” platform after ESPN opt-outed of the final three seasons of a deal that cost $550 million a year for exclusive Sunday night regular season games, the Home Run Derby and first round playoff games.
Beyond its hope for added subscribers, in a digital world, it wants to make fans think of its service as the front door for sports. While it does hold the largest and best portfolio in sports programming, it does not have close to everything with Fox, NBC, CBS, TNT Sports, Amazon Prime Video, Netflix and YouTube, among others, paying top dollar for live sports content. To that end, ESPN plans to link out to other platforms when it does not own the rights to events.
As for the eponymous branding of the new offering, Pitaro said, “We kept coming back to our four letters. There is power in our name. There is trust in our name.”
While moving all of its content outside of the cable bundle for the first time is historically significant, it may just be another step for Disney.
The new platform will be combined with Disney+ and Hulu, allowing ESPN consumers to have the option of a bundled discount. One day, probably in the next five years, Iger or his successor may very well announce that the ESPN service will be fully combined with Disney+ and Hulu to create something closer to the cable bundle model with one clean price point.
Until then, ESPN is turning the light on in a new store and determining if a pure sports streamer, with the best content that any one platform can offer right now, can succeed on its own.
For a network that was the biggest driving engine to the decades-long success of the cable bundle, the announcement made for a significant day.
“I really like our hand,” Pitaro said.
(Photo: Robin Marchant / Getty Images for ESPN)
