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VIRAL EXCLUSIVE
Feb. 15, 2024
What Will The ESPN-Fox-Warner Sports Streaming Bundle Cost?
With the three major media companies ESPN, Fox Corporation and Warner Bros. Discovery teaming up, it has created a platform which some are acknowledging as the “Hulu for Sports.” By: Dylan Low
This co-venture is slated to launch in the fall of 2024, comprising of ESPN+ and stream offerings of 14 linear TV networks: ESPN, ESPN2, ESPNU, SECN, ACCN, ESPNews, ABC, Fox, FS1, FS2, Big Ten Network, TNT, TBS and truTV. It can also be accessed directly from the (still unnamed) joint venture, and as an additional offering through services such as Disney+, Hulu and Max.
An important question that decides whether the joint venture positively impacts the industry has remained unanswered: What will it cost? The monthly cost is needed to be appealing enough to attract cord-cutters, who have dismissed traditional cable and satellite TV, while making sure Disney, Fox and WBD avoid competing against their own streaming platforms and linear networks.
Current indications are that it will cost more than reputable stream platforms Netflix or Max, which is priced at $20 per month, but less than internet pay-TV packages in Hulu + Live TV and YouTube TV, which cost $75 to $80 per month.
Former Fox Sports Networks president Bob Thompson told USA Today he expects it to cost more than $40 per month. Analysts at LightShed Partners have estimated the bundle will be at a $35 per month initial price point, which rises to $40 in year two. Under a distributed revenue-sharing scheme, Disney would receive about $20 for every subscriber per month of the initial total payment, while Fox earns $8 and Warner Bros would receive $4, according to the analysts.
However, when adding up the distribution fees for ABC, Fox, ESPN and the other cable networks, it indicates that the bundle will have to be at a retail price of at least $50 per month, stated by Morgan Stanley’s Ben Swinburne.
It remains unknown whether the pricing decided by three media companies for the bundle will be a price consumers are willing to pay, claimed Paul Verna, VP of content at Insider Intelligence.
“So far, media conglomerates have had a rough time making the streaming model work, especially for the exorbitantly priced sports properties Disney, Fox and WBD plan to carry,” Verna mentioned. “Joining forces might give them scale, but it won’t solve the riddle of how to monetize this content.”
On the contrary, Verna continued by saying, “If it succeeds, the sports streaming service announced by Disney, Fox and Warner Bros. Discovery will knock competitors off balance, deal a body blow to the teetering cable ecosystem, and generate lucrative revenue streams for the three partners.”
In a message by Wells Fargo analyst Steven Cahall, The Disney, Fox and WBD collaboration streaming bundle is viewed as a “defensive” movement opposing Big Tech companies “angling to acquire future [sports] rights.”
As the three media companies will own production and distribution, he added, the “financial value creation remains subject to many unknown variables” — such as how the joint venture prices and packages the bundle, directly linked to the expected subscriber numbers.
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