Traditional Pay-TV services are set to be decimated following a new joint venture (JV) between ESPN, a subsidiary of the Walt Disney Company, FOX and Warner Bros to create a sports-oriented streaming video service.
Analysing what the deal will mean for Pay-TV, Tammy Parker, Principal Analyst at GlobalData, a leading data and analytics company said: “This is a blockbuster deal that will further decimate the traditional Pay-TV sector, especially for many viewers who have seen sports as the thread keeping them attached to Pay-TV, but that thread frays a bit more every time a streaming video provider gains control of popular live sports programming.”
He explained that having ESPN, Fox, and WarnerBros combine their vast portfolios of sports content into a single streaming service will make sports fans think twice about subscribing to pricey linear programming bundles offered by cable and satellite TV providers.
He also believes that the lure of an all-in-one app with a smorgasbord of appealing sports content will be tough for sports fans to resist.
“One big question revolves around pricing for the still-unnamed service, especially given how expensive sports rights are. The standalone app might cost more than potential viewers are willing to pay. However, subscribers will have the option to bundle the new service with Disney, Hulu and/or Max, and will thus be able to take advantage of discounted value pricing for a full package of streaming services.
“The new sports service will be positioned to build a healthy subscriber base quickly. In addition to siphoning off subscribers from cable and satellite TV providers, which are considered multichannel video programming distributors (MVPDs), it will also pose a significant threat to other sports-oriented streaming services, such as FuboTV, a virtual MVPD with a focus on live sports.
“The JV planned by these three leading media companies also reflects the growing importance of live event programming in general for streaming service providers. That is the reason Netflix recently signed a deal worth more than $5 billion for exclusive rights to World Wrestling Entertainment’s popular Raw program starting in January 2025. But live events do not need to be restricted to sports, or hybrid sports-entertainment programming as in the case of Raw, to create must-see, destination programming. Pure entertainment events such as live comedy stand-up specials or concerts are also fair game for streamers seeking to create higher engagement with viewers.