Over the course of the last year or so, Disney has pivoted its strategy to focus more in direct-to-consumer. The wild success of Disney+ has of course made the new direction that much easier, with the streaming service becoming a formidable competitor to the likes of Netflix and Amazon Prime Video before it even celebrated its one-year anniversary.
However, such a big shift in strategy of course forces other changes to happen. According to the Financial Times, when laying down the strategy for Disney+, then company CEO Bob Iger, along with then chairman of direct-to-consumer and international division Kevin Mayer, saw that pairing the streaming service with Hulu would gain more subscribers.
However, this would leave ESPN+ behind and so they decided to add it to the other two for what is now known as the Disney bundle going for $12.99 a month.
The move was evidently lucrative as ESPN has gained major traction since. In November, Disney reported the service was now at 10.3 million subscribers according to Disney’s Q4 earnings report. The previous quarter, the company revealed ESPN+ was at 8.5 million subscribers, up from 7.9 million subscribers in Q2.
With ESPN+ attached to the other two services and the ESPN cable network lagging in viewership, Disney execs considered “moving some of ESPN’s popular sports programming to its streaming service as early as 2022, after the expiry of licensing contracts requiring games to be broadcast on ESPN’s cable channel,” sources told Financial Times.
However, with other companies vying for live sports and so many disputes happening between carriers and distributors, moving sports rights to ESPN+ would have left Disney vulnerable. “Prices (of sports rights) have risen as broadcasters such as Fox and NBC have looked to compete with ESPN, locking the network into a costly, rigid business model that would be difficult to convert,” said the Financial Times.
But, it seems changes at ESPN were not the only ones the company considered. Sources told the Financial Times that Disney also considered selling A&E Networks as well as Freeform, but didn’t go through with the sale for undisclosed reasons. The company instead, has split the programming among streamers— Nat Geo was made a part of Disney+ while FX programming was integrated into Hulu and Disney gave licensing rights for A&E to Discovery for the upcoming discovery+.