Disney has not been shy about finding a strategic partner to help give clarity to ESPN’s increasingly opaque future. Much of these talks have been centered around the eventual step of taking the linear ESPN channels Direct-to-Consumer and provide a streaming option for those who have cut the cord entirely.
ESPN’s entire business model has been built for years in part on cable subscription fees which provided the company with a huge amount of revenue as the most expensive channel in the bundle by far. But with ESPN shedding linear subscribers at an alarming rate, the company is looking for alternative means of cash flow. That includes finally entering into the sports betting arena and the much anticipated DTC launch, which the company has said is only a matter of time.
As those conversations move forward, it seems as though ESPN has centered on partnering with tech companies that can aid in the network’s streaming future. While Verizon was one interested party, The Information now reports that ESPN and Amazon are in talks to partner together.
But perhaps even more interesting is that a price for the new service is starting to emerge as Sahil Patel of The Information shared. And if you thought ESPN charging less than $10 in monthly cable fees was an astronomical price, you haven’t seen anything yet.
ESPN is reportedly considering anywhere from $20-$35 according to Patel, and that may be the low end of the spectrum.
Amazon has talked with Disney on a new ESPN streaming service.
Maybe more notable is that ESPN is considering charging between $20-$35 for the new service, though that could increase.
Figuring out ESPN's future will come at a high cost.
New from me: https://t.co/QooDB6k9wK
— Sahil Patel (@sizpatel) August 24, 2023
This was always going to be how a move to Direct-to-Consumer would play out with the shift to streaming and dissolution of the cable bundle. After all, the whole point of the bundle was for consumers to pay less for each individual channel in order to have the entire package. Sure, that meant that some folks who never watched ESPN would have to pay a share, but it kept prices somewhat manageable.
In an a la carte world, where ESPN can set their own price, what’s stopping them from charging an exorbitant fee in the range of $30-$40 per month? Do you think fans who have been waiting for an ESPN DTC option aren’t going to want to have Monday Night Football, the NBA, college football, the NHL, Major League Baseball, and more?
As far as partners go, Amazon and Apple would certainly be the two tech behemoths that spring to mind that could provide the most support. Both appear ready to fully dive in to the live sports world in the coming decade and a partnership with ESPN would be a golden ticket to building a sports streaming empire.
ESPN will be under immense pressure to get the price point right in a world where sports fans are already paying a crazy amount of money for all the streaming platforms needed to watch games. The network is caught between trying to maximize a new revenue stream and not lose or turn away any more subscribers in the years to come. The stakes for ESPN’s future as the worldwide leader in sports couldn’t be higher.
