Is Disney Preparing to Shut Down ESPN+?
Is Disney Preparing to Shut Down ESPN+?
As many as three new ESPN streaming products are on their way to customers, and when they arrive there may not be need for ESPN+ any further.
On Tuesday, Disney shared its earnings report for its fiscal third quarter of 2024, and the data was mostly what analysts expected to find. Disney+ and Hulu both saw their customer bases grow by a modest, but steady amount, but the report also had a fairly glaring omission: subscriber totals for ESPN+. Disney did reveal that profits from ESPN+ allowed its streaming segment to become profitable as a whole, but did not include the subscriber count for its sports streamer as it usually does. With so many new ESPN streaming products en route to audiences, it’s fair to wonder if this decision is a prelude to the sunsetting of ESPN+ in the near future.
Key Details:
- ESPN+ generated $66 million in profit in Disney’s fiscal third quarter.
- Disney is launching an ESPN tile on Disney+ in December.
- A standalone ESPN streaming service is due to arrive in 2025, and Venu Sports will launch this fall if it can overcome legal challenges.
The reason I suspect that Disney may be planning to wind down ESPN+ has less to do with the streamer’s current success or failure than it does with the future. Indeed, ESPN+ helped Disney’s direct-to-consumer arm achieve profitability a full quarter early, as it landed $66 million in the black. Disney+ and Hulu combined to lose $47 million, but that still allowed Disney’s streaming business to end the quarter with $19 million on the right side of the balance sheet.
We don’t know how many customers ESPN+ currently has, but as of May, when Disney last reported subscriber totals for the service, it had 24.8 million paid viewers. It commanded an average revenue per user of $6.30, which suggests a large portion of subscribers were getting ESPN+ through the Disney Bundle since a standalone subscription costs $10.99 per month currently.
Despite the cheery financial data from the streamer last quarter, there’s a good chance ESPN+ is not long for this world. Disney has announced several new plans to bring ESPN content to customers without their having to subscribe to a pay-TV package in recent months. With all those new options to watch ESPN without cable, it doesn’t make much sense for the company to continue offering ESPN+ as a standalone service, particularly when factoring in the cost of maintaining the streamer.
What New Streaming Products Is ESPN Preparing to Launch?
To start with, Disney+ will incorporate an ESPN tile starting in December 2024, as confirmed by Iger when discussing the company’s earnings report on Tuesday. The ESPN tile will house “select live games and studio programming,” according to Iger, and will likely show content that isn’t available on ESPN+ currently, such as the full slate of “Monday Night Football” games and perhaps even NBA basketball.
“We see this as a first step to bringing ESPN to Disney+ viewers, as we ready the launch of our enhanced standalone ESPN streaming service in the fall of 2025,” Iger said.
In February, Disney announced that it would launch a standalone streaming service built around the ESPN family of channels referenced in Iger’s quote. That service — currently being referred to as “Flagship” — will reportedly have a wealth of features available, and while there are few confirmed details as yet, the fall 2025 target launch date is more specific than any timeline we’ve been given by Disney so far. Presumably, the streamer will offer every event that can be found on linear ESPN channels.
Then there’s Venu Sports, the most complex of the three cases. Venu is a joint venture between Disney, Fox, and Warner Bros. Discovery which bundles 14 channels, including ESPN and ESPN2 along with ESPN+ onto a single streaming platform. It faces a serious legal challenge from Fubo, as well as deep scrutiny from United States government officials who are concerned about potential antitrust violations. If Venu does make it to customers, however, it will be one of the cheapest ways to watch the ESPN cable channel that consumers have ever had access to.
To be sure, ESPN+ offers content that is not currently found on ESPN’s linear channels. It offers tens of thousands of live sports events every year, and there simply aren’t enough hours in a day for linear ESPN to televise all of the content found on ESPN+. But once Disney launches more streaming options for ESPN that allow customers greater programming flexibility, it won’t have to maintain another service like ESPN+ for more off-the-wall sports like Junior League Baseball or the CrossFit Games that don’t make it onto ESPN or ESPN2.
Indeed, ESPN+ is the home of some valuable pieces of programming that Disney may want to use to advertise its new ESPN streamers. That includes PGA TOUR LIVE on ESPN+, which offers extensive coverage of golf tournaments that viewers can’t find elsewhere, as well as NHL Power Play, which is included at no extra cost with an ESPN+ subscription and allows audiences to watch out-of-market NHL games.
The operating costs of ESPN+ have not been made public by Disney, but there seems little point in continuing to pay them once the company has all of its new ESPN distribution methods up and running. The failure to include ESPN+’s subscriber count in its most recent quarterly earnings report is just another sign to me that the company is planning to sunset ESPN+ as soon as it gets its other ESPN streaming services to market.
ESPN+
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