If I want ESPN, that cheaper base price better be the same price I can get all the other services individually directly from them. Then why is there even a need for the streaming provider? This is why I say the entire market will be changed by this. Streaming will have zero reason to pay a provider when you get $0 savings versus DTC.
This is why I have been saying for the past few years that when ESPN (in its entirety) goes DTC, that's the beginning of the end of the cable bundle. That's when the floodgates open. The whole thing breaks apart into a few DTC chunks. And we can see the outlines of it now. Disney will put their non-sports content (including what is now Hulu) in Disney+. Their sports goes into ESPN.
The question is how the rest of the bundle breaks apart. All of those other smaller media companies --NBCUniversal, WBD, Paramount, Fox, AMC, Starz, Hallmark, etc. -- can't profitably compete with their own separate mini-bundles. So the question is how they consolidate, either through M&A or joint ventures, and then how (or if) they carve up their content by type, i.e. general entertainment vs. sports vs. premium.
It remains to be seen what Comcast (NBCU) does with Peacock. Having NBCU tucked inside a larger, profitable company (i.e. the nation's largest broadband provider) keeps Wall Street pressure off of it. Their public-facing attitude, at least, is that they are pleased with how Peacock complements the rest of their media portfolio and they are content to see how it continues to fare as a unified DTC mini-bundle that encompasses all their stuff: general entertainment (NBC, Bravo, Hallmark, etc.), sports, and premium (first-run uncut Universal movies in 4K HDR).
But the pressure is very much on Paramount and WBD to come up with a new approach because what either one is doing now ain't working. So if you're looking for movement on the DTC front, those are the two to watch. I think the likeliest scenario is either a JV between the two (new brand?) or Paramount simply licensing most of their stuff to Max. In either scenario, the Paramount+ app takes a dirt nap.
But I'm skeptical that even a tie-up of Max and Paramount+ would have what it takes to survive and thrive. Which is why I think WBD should make a play for most of Fox Corp. Work out a cash and stock deal with Murdoch to merge all of Fox except for the Fox News Division in with WBD. Murdoch would retain the rights to the Fox brand, meaning that the Fox broadcast net, Fox Sports 1 and Fox Sports 2 would all see rebrands under WBD. Murdoch might merge Fox News into his News Corp. alongside the Wall Street Journal and other right-leaning news outlets around the world.
Then I'd go a step further and strike licensing deals with Nexstar (owner of CW) and Scripps (owner of Ion) to get their live sports on the joint WBD/Paramount DTC streamer. Putting together all the sports across CBS, Fox, FS1, FS2, Big 10 Network, TNT, TBS, CW and Ion (plus the niche non-cable stuff like foreign soccer that currently streams in Max and P+) would be a pretty decent package. They could sell that on a standalone basis to compete against ESPN and Peacock.
Then they could take the non-sports content, which would include entertainment and news shows from a range of networks/brands -- CBS, Fox, Max Originals, CNN, CBS News, Showtime, Paramount, CW, Comedy Central, Nickelodeon, MTV, Cartoon Network, Adult Swim, Discovery, HGTV, TLC, Magnolia, OWN, ID, etc. -- and market that as a competitor to Disney+ and Netflix. They could also include local newscasts from stations owned by CBS, Fox, Nexstar and Scripps.
I would not include HBO as a non-optional part of that service but would instead spin it back out as its own standalone service which could be optionally accessed inside the general entertainment app as a discounted add-on.
I'll admit that a deal between WBD and Fox probably won't happen. But I think there's a pretty good chance that we'll at least see some kind of DTC tie-up between WBD and Paramount.
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