February 6, 2018
The Walt Disney Co. this spring is launching a standalone ESPN over-the-top video service, a $4.99 monthly platform powered by the media giant’s recent $3.75 billion BAMTech acquisition. Disney will also launch its first domestic OTT video in late 2019.
The move comes as Disney reported 11% drop in first-quarter (ended Dec. 30, 2017) ad revenue at ESPN. The company attributed the decline in part to the timing of the NCAA college football playoffs. ESPN broadcast six bowl games in Q1 last year compared to two games this year.
Speaking on the Feb. 6 fiscal call, CEO Bob Iger explained that the revamped ESPN app would feature live (authenticated) streaming, scores, highlights, news, stories, etc.
A third component, dubbed ESPN Plus, will feature on-demand content, including the entire library of ESPN’s award-winning “30 for 30” series.
“We plan to invest further in the direct-to-consumer feature, adding more live games and produce sports programming, along with even greater personalization in the years ahead,” Iger said.
Should Disney’s $52 billion acquisition of 20th Century Fox go through, it plans to incorporate movies from Fox 2000 and Fox Searchlight for OTT video – a strategic move Netflix follows.
“As a company, when combined, we’ll have far more production … to flow into our traditional distribution businesses, that being TV channels and the motion picture exhibition business, as well as the capability to create product for our direct-to-consumer businesses,” Iger said.
He said that with Disney, Marvel, Pixar and Star Wars brands, the studio won’t try and emulate Netflix’s 80 feature-film production goals.
The demand for those [Disney] brands, we believe, will give us the ability to spend less on volume,” Iger said.