Warner, Fox, Disney to Launch Streaming Sports Joint Venture

[Yespage]

They can't get too stupid with pricing. It is ala carte and people can chose not to buy.

I'm not saying it'd be to rip people off. Disney has a problem with having bought a ton of sports rights for huge premiums. They have bills to pay. If Dish / Directv / Comcast all switch ESPN to a la carte, Disney loses all of the money people who don't want sports. That'd mean at $40, they'd need around 5 to 8 subs just to cover the potential loss of Cable/Sat revenue.

This is a wickedly tight needle to thread.

 

[Yespage]

They are expecting a lot from Advertising Revenue, with accurate numbers ( on who is really watching vs a estimate from Traditional Paid TV) and targeting, they might get it.

I get that, but they'll be trading off some revenue for other revenue. They are trying to get the people who don't already have sat/cable, but they'll be trading off the revenue for people who have those but don't watch it.

They (Providers) just cannot make , for a example, ESPN a la carte, or move it to a higher tier, that would require a change or a new contract, for example, Charter came to terms back in September with Disney, so nothing until Sept 2026.

Yes, but lawyers.

Right now they are focused on the 60 Million Households ( out of 131 Million)who do not get a Paid Live TV Service.

But they know this will cause more losses amongst those 71 Million that currently do get paid Live TV.

They are trying to figure that out now, if a DVR, cannot skip commercials for all or certain programming, if a charge or not, etc.
But they are really counting on a lot of revenue from Advertising.

That'd imply permanent ads.

Warner was a very recent partner, they figured out their BR+ add on to MAX was going no where.

There are still new contracts to work out with College Football Playoffs and the NBA this year, I believe MLB next year.

Indeed, I think one problem these networks are having is they are still acting like it is the 1990s/2000s regarding subs when it comes to them just bidding the heck out of sports programming. $40 to $50 isn't really obscene, but for the average sub, it might be. Subscribers are getting cheaper.

Sub loss is a problem, but it isn't the only one. Another is these networks are making sports wickedly more expensive. The future model of sports, in my opinion, is not compatible with how the networks are bidding up for sports. This will likely gain subs lost, but it will also lose subs. And then $100 million per MNF game... is still outrageously expensive. Revenue could go up, but the expenses are too high.

 

[savarese04]

I think the issue here is going to be overhead. I'll provide competing examples:

Nike has been pulling its shoes from many retailers and selling DTC via their website. On a $100 pair of shoes, they probably wholesale them for $40. If they sell DTC, the extra $60 is right in their pocket as almost pure profit instead of someone like Foot Locker. Overhead to maintain website/customer service/fulfillment is minimal because they already have to have this infra set up. Going pure DTC is a win-win for them. This is also why they can afford to do free returns all day long.

I don't know what the per sub costs are (maybe someone does and we can run some real numbers), but say ESPN, Fox, and WB are $20, $5, and $5 respectively. That means they have to charge $30 to make back what they would have gotten from the viewer as a cable sub. Never mind the ever increasing cost of content. HOWEVER, they now have the added overhead cost of running this service - website, servers, stream bandwidth, developers, support, the list goes on. It's not like they can "reassign" all the costs from people that were working on delivery to cable/sat to these new jobs because they still have to maintain cable delivery. So what additional overhead is needed to make money here?

Unless this thing sells like gangbusters and economies of scale kick in, they are gonna have to put a minimum $10-15 on top of the $30 in order cover overhead and make a small profit.

 

[Bruce]

I don't know what the per sub costs are (maybe someone does and we can run some real numbers), but say ESPN, Fox, and WB are $20, $5, and $5 respectively.

ESPN is $11 for ESPN 1 and 2 together.

Unless this thing sells like gangbusters and economies of scale kick in, they are gonna have to put a minimum $10-15 on top of the $30 in order cover overhead and make a small profit.

You like the rest are forgetting about revenue from Advertising.

Google has announced it is profitable with YTTV at $73, that has a lot more channels, so $40 is a fair guess, then revenue from Advertising, sports et the highest rates typically, since it is a dedicated audience .

 

[Bruce]

Fox reported their quarterly report and Lachlan Murdoch did address this with a non-answer-

“We are very confident that this is a large market and a large opportunity that we can address without without undermining the traditional bundle,” Murdoch said.

But of course, he did not say how it would not undermine the traditional bundle.

Also profits and advertising revenue were down about 20%, which helps explain what is going on.

Fox Advertising Revenue Down 20 Percent to $2B, But Company Hits Wall Street Expectations

The owner of Fox and Fox News saw affiliate fees rise, but ad revenue fall.

www.hollywoodreporter.com

 

[savarese04]

You like the rest are forgetting about revenue from Advertising.

I am not. I am assuming the in-event ads that are shown on the linear feed with be the same as the streaming feed, hence flat revenue difference from service to service. Unless you are implying they will be adding MORE ads with this product? Or are they replacing in-event ads on the cable/sat feed with different ads for the stream customers? I can't imagine they are going to create a custom stream for DTC

 

[cpalmer2k]

All of these providers already have infrastructure in place to stream. My guess is they'll do like the NHL did when they partnered with MLB AM for their streaming operations. They'll most likely pick whoever has the best infrastructure in place (personally, I would choose ESPN if it were me since they're in the market already of streaming tons of sports feeds on a regular basis, and they also are going to account for the bulk of the programming) and hire some programmers to create their new app and integrate it all together.

Either that, or they'll create one app that will rely on the existing feeds these companies are already feeding to their own apps for Authenticated users.

To me this isn't that big of an added expense- all of these feeds already exist in the form of TV Everywhere feeds. They've just got to decide how they want to integrate and sell them as a group to the end user who wasn't subscribing before. Yes there is overhead, but it isn't the cost of building something from scratch. They're also keeping/splitting 100% of the profits here, versus having to share them with traditional TV operators.

One question I do have though.. when it mentions ABC & FOX, will this be actual local affiliates in every market, or will you just get the "National" ABC programming and Fox programming like you currently do in many cases today through TVE feeds? If they try to cover every local station that could get messy. We don't get our local FOX Affiliate via streaming here TVE, but we can watch their primetime programming only online. ABC games are similar- you can stream them on ESPN's app through authentication, but they're a generic feed and not from our local station.

 

[Yespage]

ESPN is $11 for ESPN 1 and 2 together.

But that includes the people who don't watch it. Those people aren't buying this bundle.

You like the rest are forgetting about revenue from Advertising.

Not forgetting, their existing linear already has ads. Most of their programming already has ads. It'd be the on demand that'd include new ad revenue. Unless they are planning adding ads into live events... during play.

You are being a bit too optimistic on the product. A lot of people that are out, don't want back in at all. This isn't a sure thing for these companies. Otherwise, they'd be tossing out their own individually. That they are bundling the sports is potentially a worrisome sign. Time will tell.

 

[Jimbo]

A lot of hype on tv’s this morning as a “game changer” not sure what they hype is. I enjoy sports but all these sports on streaming platform does not excite me. But for those that are looking forward to this cheers!

I agree ...
Much better when you could get all your channels on the same platform with out leaving each to go find another.

 

[Jimbo]

I'm thinking it will probably start at $40 and go up in price by $5 every year.
I might be able to afford this since I'm only paying $25/month for Philo. I'll be retiring at the end of the year, so I will have more time to watch 3 hour games. My work hours just don't allow me to start watching a game @ 8pm est.

Fortunately, theres only a few games with 8 pm starts.

 

[Yespage]

I agree ...
Much better when you could get all your channels on the same platform with out leaving each to go find another.

But think of all that money aren't saving anymore! Totally worth it.

 

[Bruce]

I agree ...
Much better when you could get all your channels on the same platform with out leaving each to go find another.

And pay a what, did you not say your DirecTV bill was $150 a month.

 

[Jimbo]

And pay a what, did you not say your DirecTV bill was $150 a month.

Yup, you pay for Convenience.

 

[zippyfrog]

ESPN announced today that the DTC ESPN version will be in August/September 2025


View: https://twitter.com/ESPNPR/status/1755344651672789134?s=20

 

[Bruce]

Yup, you pay for Convenience.

I am not bothered by switching apps, takes seconds.

The new rumors are this service will cost $35.

Paramount + with Showtime $12
Peacock $11
Max $20
AMC+ $9

With the above, almost everything from Paid Live TV, Live feeds of all 4 networks, sports, all streaming shows, better picture/sound, movies for $78.

Forget Convenience, save me the $72 a month.

 

[Bruce]

ESPN announced today that the DTC ESPN version will be in August/September 2025


View: https://twitter.com/ESPNPR/status/1755344651672789134?s=20

When I first heard of the team up between Fox Sports/ESPN last October , I thought that was the end of the standalone plan, but I found out it was not.

I believe it is idiotic to offer both services, basically in competition with each other, especially since ESPN on it’s own, will not be that much less expensive then the small sports bundle service.

 

[Bruce]

Fubo TV is the first provider to go public with their displeasure about the new service.

Fubo Says The Joint Streaming Service With Disney, Fox, & Warner Bros. Discovery is Concerning For Them | Cord Cutters News

This week Disney, FOX, and Warner Bros. Discovery announced a partnership that would see a new sports-focused TV streaming service launch this fall. This service would offer 14 live channels of sports, including ESPN, BTN, FOX Sports, and sports from TNT—to name a few. This would address one of...

cordcuttersnews.com

 

[Joe The Dragon]

so when this starts will some cables co's Drop ESPN? unless they can get it as standalone?

 

[zippyfrog]

so when this starts will some cables co's Drop ESPN? unless they can get it as standalone?

I don't know for sure, but that is my guess. Having a DTC offering I would think would have to be tied into the contracts for the satellites and cable companies - the plans of what happens if they launch DTC. Whether that means a reduced fee, can move to a higher tier or a-la-carte, etc. And, my guess is that the Aug/Sept 2025 launch date lines up with the expiration of whatever last provider(s) don't have a clause in their contract about DTC.

 

[KAB]

I

Paramount + with Showtime $12
Peacock $11
Max $20
AMC+ $9

With the above, almost everything from Paid Live TV, Live feeds of all 4 networks, sports, all streaming shows, better picture/sound, movies for $78.

You're not going to get live feeds of Fox and ABC from your list above.