Last week’s announcement of Disney investing more money into BAMTech and the subsequent unveiling of an ESPN standalone over the top service and another for Disney content is proof that the company is now eager to embrace cord cutters. After slowly responding to the idea of cord cutting, Disney CEO Bob Iger finally acknowledged the issue and has taken steps to combat it with the upcoming streaming services.
As we’ve told you, the ESPN streaming service will not be the actual linear networks, but will offer plenty of sports including MLB, MLS, NHL, tennis and college sports. Plus there will be individual packages from MLB, MLS and NHL that will be sold to consumers.
This is an effort by Disney to cut out the middleman and go directly to the the public. Disney CEO Bob Iger told Bloomberg that is exactly the strategy here:
“If you look at Disney’s businesses, except for the theme parks, virtually all of the businesses touch consumers through third parties, everything from big box retailers to the owners of motion-picture theaters,” Disney’s chief executive officer said in an interview on Bloomberg TV. “This is an opportunity to reach the consumer directly.”
Before, Disney put its movies on Starz and then Netflix. Starting in 2019, they’ll be on Disney’s service. The announcement comes as Disney’s third-quarter earnings were lower thanks mainly to the cable TV offerings like ESPN which has been hit hard by cord cutters and slower ad sales.
CBS went all-in with its own streaming service and one for Showtime. Last week, CBS CEO Les Moonves said both will have over 4 million subscribers by the end of this year and is on track to reach goals of eight million by 2020.
While we don’t know what the monthly fee for the ESPN. Iger promises it will be “reasonable.” More than 10,000 live events will be streamed on the service and certainly Disney hopes that it will be able to bring in revenue which the linear ESPN has lost over the years. Only time will tell, but without NBA and NFL which are the bread-and-butter of the linear TV channels, it might to tough to convince fans that the price for the ESPN over the top will be worth it.
Still, the big money-makers in all this might be actual $1.58 billion investment to gain a 75% share in BAMTech as well as the Disney streaming service.
But Netflix which took a hit on the Disney announcement is trying to put on a brave face saying it still have its movies through the end of 2018 and maintains a relationship with the Marvel TV division which will likely continue past 2019.
So Disney has put itself in a position to go over the top starting in 2018 with ESPN. Disney is ready to embrace the cord cutter. The question is, will the cord cutter be ready to embrace Disney starting in 2018?