ESPN is ready to take its product directly to cord cutters. How is it going to do that? Well, there are a couple of different ideas. The question is can the two approaches co-exist? Disney CEO Bob Iger wants you to believe they can. I am not so sure that’s true.
Last week on an earnings call, Iger told Disney investors that the company was partnering with Warner Bros. Discovery and FOX to launch an app that would bundle all three companies’ sports properties. Finally, the public would have an option to watch nearly all major sports in their homes without having to subscribe to cable.
It could be a game changer. There are several challenges to that reality (more on that momentarily). What is certain is that Disney now suddenly has its hands full with determining ESPN’s digital future.
According to Iger, whatever this super app is called, it is different from ESPN+. It is also different from the network’s so-called “Project Flagship,” the plan to make the entire portfolio of networks available as a direct-to-consumer streaming product. It also is different from the linear cable channels.
There are a lot of threads that need to connect. Disney has woven quite the spiderweb here. It’s going to be hard for everything to succeed simultaneously.
Bob Iger is a smart guy. So is Jimmy Pitaro. They know they cannot launch these products without pissing off the likes of Charter, DirecTV and other linear TV providers that had paid carriage fees and distributed the network’s content for decades.
Even though they are saying something different publicly, I would bet they are smart enough to know that an over-the-top ESPN product cannot co-exist with this super app partnership. ESPN is now its own chief competitor. The network will have to pull out of one project to give the other a fighting chance.
Upon first glance, it’s easy to think that the smartest play is to abandon plans for an ESPN-only streaming product. In fact, the willingness to enter a partnership with WBD and FOX to provide more play-by-play coverage to subscribers suggests what I have been insisting all along is true: the decision to pay for a streaming ESPN will have nothing to do with Stephen A. Smith, Pat McAfee or any other personality. ESPN knows that the only thing a customer will ask him or herself is “do I need this to see all of the games I want to watch?” when deciding if the product is a worthy investment.
So the solution should be simple, right? Forget the 2025 launch date. Forget Project Flagship entirely. If the games are what matter, build the streaming future of ESPN entirely around a product that delivers the most games to the consumer.
But it’s not that simple.
Disney, FOX and WBD are three different companies. Each one has its own agenda. If their super-sports platformed is co-owned equally, how will it accommodate what all three want to accomplish?
It’s similar to the problem Hulu faced when it first launched. Multiple networks and studios participated. Multiple VC firms and investors put money into the venture. Every one of them thought their strategy for Hulu was going to be THE strategy.
Hulu was kind of a mess when it launched. Some networks made their shows available to stream the day after they aired on linear TV. Some delayed Hulu debuts to be multiple weeks behind their TV networks. Others didn’t make any new shows available, instead providing just their catalog of shows no longer in production. Considering that history, describing this sports venture as “Hulu for sports” feels ominous.
Just think for a minute about all of the conflicts involved. Does Disney compete with itself? The “Hulu for sports” would not only be competing with an ESPN-exclusive streaming service. Hulu, which the company also owns, offers a live TV service. That would be competition too. FOX’s only business these days is live television. Is that company concerned that linear TV providers will punish FOX News because FOX Sports is participating in this venture? How committed to all of this is WBD? The company is invested in sports, but outside of TNT, its cable networks are largely only sports properties during the NCAA Tournament and Major League Baseball’s postseason.
These companies have gone to war for years in an effort to secure live sports rights. That has benefitted MLB, the NBA, NFL and NHL. Now that they are working together, will the leagues feel that they cannot get a fair deal? Maybe NBC and CBS will regret not being part of this partnership, or maybe that skepticism from the leagues will be the lifeline to make those other two networks much more attractive in rights negotiations.
Going digital is the right move for ESPN. Untethering ESPN from cable is the right move for Disney. It’s fair to argue that the company is trying to give its customers as many options to get the network’s games as make sense. Options can help ensure that everyone gets exactly what they want.
They can also be paralyzing. Consumers may be so overwhelmed that they end up not making a choice at all, or the pool can become so fragmented that none of the options every truly become successful.
Decades of evidence exist that say live sports matter to TV viewers. ESPN has the most live sports and over those decades, the network has become a cultural icon. I trust Disney will get this right. I am merely skeptical that everything that has been announced will actually end up on the market.
Demetri Ravanos is a columnist and features writer for Barrett Media. He is also the creator of The Sports Podcast Festival, and a previous host on the Chewing Clock and Media Noise podcasts. He occasionally fills in on stations across the Carolinas in addition to hosting Panthers and College Football podcasts. His radio resume includes stops at WAVH and WZEW in Mobile, AL, WBPT in Birmingham, AL and WBBB, WPTK and WDNC in Raleigh, NC.
You can find him on Twitter @DemetriRavanos or reach him by email at DemetriTheGreek@gmail.com.
