ESPN executives already fear it’s coming: the inevitable backlash of customer confusion when Disney formally announces the launch of the long-awaited ESPN “flagship” streaming service in the fall – likely before the start of the NFL season.
ESPN already has a streaming service in the market in ESPN+, which costs $11.99 per month and can be bundled with Disney+ and Hulu for $16.99 per month.
When ESPN launches whatever it decides to call its flagship platform, it will need to clearly explain to customers what they’re getting in the more expensive service (which will cost either $25 or $30 per month, I’ve been told).
Subscribers will have the option to bundle “flagship” with Disney+ and Hulu. ESPN+ will likely be marketed as a tier of the more expensive platform, rather than its own standalone product. In other words, there will effectively be a “flagship light,” which will be the artist formerly known as ESPN+.
To best understand what ESPN is doing, think of the strategy as two-pronged.
Prong one: ESPN wants to sell its content outside of the cable bundle for the first time. The purpose of this is to appeal to younger viewers who do not subscribe to cable. ESPN is likely to take a “flood the zone” strategy to market the product. Not only will there be a Disney bundle, but from what I understand, ESPN is interested in partnering with telecommunications services, similar to what T-Mobile has done with “Netflix on Us.” I’d also expect ESPN to be included in other streaming bundles beyond just Disney.
This is an extension of why ESPN initially wanted to launch the now defunct Venu – Disney’s idea to include ESPN in a skinny bundle of cable networks with Warner Bros. Discovery and Fox. ESPN wants as many subscribers as possible, in whatever form they choose, while maintaining favorable economics. The mission is literally stated on the walls of ESPN headquarters: “Serve sports fans, anytime, anywhere.”
Prong two: ESPN is also dramatically upgrading its digital app – the app on mobile devices and connected TVs – to include all of ESPN’s live games, a personal AI-built Sportscenter, all of its documentaries, new e-commerce options, alternative broadcasts for games, a user guide that directs people to games, a bespoke integration with ESPN Bet for gamblers and fantasy sports players, and more. Eventually, it will likely even include some user-generated content, as I reported last month.
In order to get all of these bells and whistles, a customer will need to be either an ESPN cable customer or a flagship service subscriber.
Once the flagship platform launches, there will be two ways to authenticate to access ESPN’s full offerings. The first will be to subscribe to the service, and the second will be staying in the cable bundle. That means everyone who currently accesses ESPN through a cable bundle or a virtual cable package (like YouTube TV) will get everything included with the flagship platform through the ESPN app.
Disney has no interest in millions of people canceling cable just to sign up for the new service. ESPN Chairman Jimmy Pitaro has previously said he’s agnostic about whether someone signs up for the direct-to-consumer product or stays in the cable bundle. But give him, or any other Disney executive, truth serum, and they’d tell you cable is the better alternative because churn risk is far lower.
A key point here is the ESPN app will become the hub of everything ESPN, no matter if you’re an authenticated cable subscriber or a cord cutter. While there will be an ESPN tab on Disney+ (this already exists, but it’s just for ESPN+ now), viewers will have to be in the ESPN app universe, with its bespoke look and user interface, to access all of the goodies.
That’s a specific request of Disney CEO Bob Iger, I’m told. He wants ESPN – not Disney+ – to be the preeminent digital destination in sports.
ESPN’s hope is everything I just wrote will be more or less intuitive once the company picks a name for the service and begins marketing the product. Sources tell me the name will be announced in the next month or two, with pricing and a specific launch date to follow.
