Revenue and profitability increases will help network’s search for a strategic partner.
Disney chief executive Bob Iger has confirmed the full direct-to-consumer (DTC) streaming version of ESPN will launch by 2025.
Currently, ESPN’s linear networks and the ESPN+ streaming service operate in isolation, which means flagship events like the National Football League (NFL), the National Basketball Association (NBA) and college football are exclusive to cable.
The company has confirmed plans to combine the two offerings in the next few years but Iger’s comments were the first time it has committed to a specific year, if not yet a more detailed timeline.
In a Q4 earnings call with investors, Iger said the company was working to build ESPN into “the preeminent digital sports platform” as it seeks to make streaming a profitable enterprise for the media giant. As part of the changes, a joint Disney+ and Hulu application will be offered to users.
As part of the launch, ESPN is eyeing up strategic partners to assist with content and distribution in exchange for an equity stake. The division was recently valued at US$24 billion, with reports suggesting Disney’s ideal scenario would see it give up no more than ten per cent of ESPN, with a tech giant such as Apple and a mobile operator like Verizon helping to get the new streaming service into the hands of as many people as possible.
Disney’s quest for partners will have been boosted by a one per cent increase in ESPN’s quarterly domestic revenues to US$3.5 billion and a 16 per cent rise in operating income to US$850 million.
“We’re already moving quickly down this path, and we are exploring strategic partnerships to help advance our efforts through marketing, technology, distribution, and additional content,” said Iger.
“Since I noted that we were interested in this back in July, we’ve engaged with a number of different entities. I can say that there’s significant interest out there. There are obviously complexities to it, but not complexities there were not hurdles that are so high that we can’t jump over them.
“I would imagine we’ll have more to say about this in the coming months. But I don’t want to say much more right now, except again, there’s serious interest out there.”
The major leagues themselves have also been touted as potential investors, with Disney offering them an equity stake in its sports business in exchange for exclusive content or more favourable rights agreements. It has also been suggested that ESPN could integrate NFL+, NBA League Pass or local broadcasts of Major League Baseball (MLB) games into ESPN+, positioning the new service as a hub for the sports industry in a fragmented streaming landscape.
When asked about local rights launching on the new DTC platform, Iger said it was a possibility.
“The technology that we will have for ESPN DTC will give us the ability to provide local sports in a pretty robust way, basically what the RSNs are doing,” he said. “But we’re not really aiming to do so by taking on significant risk. So, if we can find the right kind of business arrangements and partnerships, I think we’ll look very seriously at providing local sports as part of the platform.”
Source: https://www.sportspromedia.com/news/espn-dtc-launch-2025-disney-streaming/