Disney, Fox, WBD Say forthcoming Sports Streamer Is ‘Pro-Consumer’; Disagrees With Opponents’ Letter to Congress
Disney, Fox, WBD Say forthcoming Sports Streamer Is ‘Pro-Consumer’; Disagrees With Opponents’ Letter to Congress
The three companies followed their standard line in responding to Fubo and its allies, saying their new streamer expands choice and is good for competition.
The joint venture streaming platform being brought to market by Disney, Fox, and Warner Bros. Discovery may be centered on sports, but it’s generated more drama than a daytime soap opera thus far. Earlier this week, a group of eight media companies and organizations including Fubo, DIRECTV, and DISH Network sent a letter to Congress urging them to investigate the JV streamer more closely in hopes they’ll agree it’s anti-competitive and bad for consumers. The Streamable has received a reply from Disney, Fox, and WBD, and it follows the same argument the three companies have been trying to advance all along: the JV platform targets viewers who are already living outside the traditional cable bundle and does not seek to drive any of its competitors out of business.
Key Facts:
- Disney, Fox, and WBD continue to maintain their streamer is aimed at so-called “cord-nevers.”
- Fox CEO Lachlan Murdoch estimated the platform would likely attract only 1 million customers per year or so.
- Congress and the Department of Justice have already promised to pursue more information about the platform from Disney, Fox, and WBD.
“The service is a pro-consumer offering to a segment of viewers who currently aren’t served,” the statement sent to The Streamable from Disney, Fox, and WBD reads. “It will expand consumer choice by creating an incremental, nonexclusive option for this segment of viewers to watch their favorite sports.”
Throughout the process of building this joint venture sports streamer, Disney, Fox, and WBD have maintained that their goal is not to create an industry-changing disruption with the platform, but rather to serve sports to an audience segment that has never had access to cable channels like ESPN, TNT and FS1 that will be available on the streamer. Disney chairman Bob Iger expressed skepticism that cable would ever reach this subset of customers at a tech conference earlier this year but said the JV streamer had an excellent chance of appealing to them.
“I know a lot of folks claim that it was disruptive to the bundle,” Iger said. “I’m not sure, by the way, the bundle was ever going to get some of those consumers back or the generation that our kids are part of, get them into it. This is a way to do that.”
WBD CEO David Zaslav put it plainer still when asked if he thought the JV streamer had the chance to bring down pay-TV as we know it.
“We think it coexists quite effectively” with linear cable and satellite, Zaslav said. “We don’t see a lot of people unsubscribing [from] cable in order to get this.”
Fox chief Lachlan Murdoch dismissed the notion that the platform would attract 10-20 million subscribers in its first year or two on the market. Instead, he predicted the service would probably bring in around 1 million subscribers per year in its first five years, a move that was interpreted by many as an attempt to downplay the disruptive effect the streamer could have on the media world.
Despite the increasing pressure from Fubo and others on the government to act, Iger says the three companies involved in the JV streamer aren't worried about outside interference preventing them from bringing it to market. There’s no word yet on whether the three companies responded to a non-binding request from two congressmen for more details about the product, but the Department of Justice has already pledged to review the service for potential anti-trust violations.
Do Fubo and its Allies Have a Point with Protests?
A cynical observer might be forgiven for noting that enormous media outlets like Fubo are usually wary of government interference in their business until such interference can benefit them. But at the heart of its inflammatory rhetoric against the JV, there is a valid point in Fubo’s argument.
Live TV streaming services like Fubo aren’t allowed to create channel bundles as small as the one Disney, Fox, and WBD want to sell. That streamer will offer just 14 channels, though the lineup includes popular networks like ABC and Fox in addition to ESPN, FS1, and other sports selections. Channel owners like Disney usually build language into the carriage contracts of their most popular channels that if a distributor like Fubo wants to offer that channel, it must also provide viewers with a selection of other Disney-owned networks that aren’t as in-demand.
On the other hand, it’s also fair to wonder if providers would have offered such plans to customers even if they were allowed to. Cable and live TV streaming plans that cost $75 per month or more usually bring in very high average revenue per user (ARPU), and channel distributors spent decades profiting off a formula that saw customers pay hundreds, even thousands of dollars per year on channels they didn’t watch. Would they really have offered lower-cost plans that brought in less revenue per customer if they had the chance?
The question is moot now, as distributors have dug in their heels and determined to try and stop the JV streamer instead of attempting to compete with it on the open market. Now, the ball is seemingly in the government’s court to either put a halt to the service or send Fubo and its friends home disappointed.
Fubo
Fubo is a live TV streaming service offering a robust lineup of approximately 150 premier channels, with plans starting at $63.99 per month. This entry-level package provides access to local broadcast affiliates 18 of the leading 35 cable channels channels, and valuable regional sports networks (RSNs).