Got a tip for us?
Let us know
Become a MacRumors Supporter for $50/year with no ads, ability to filter front page stories, and private forums.
Disney Raising Prices for ESPN+ to $6.99 Per Month/$69.99 Per Year
- Thread starter MacRumors
- Start date
- Sort by reaction score
ESPN+ is also supposed to replace NHL.tv, so presumably this cost increase will cover this additional programming.
The Disney bundle is included with my Verizon unlimited plan, so I wonder if I'll see an increase on my bill.
The Disney bundle is included with my Verizon unlimited plan, so I wonder if I'll see an increase on my bill.
ESPN is to sports what MTV is to music.
The other night (a Saturday night, and yes me and Mrs. IIGS stay in Saturday nights because we're old, and like to be up early on a Sunday to drink coffee and watch the sun rise, but anywhoo) the "ESPYS" were on the local ABC affiliate. Which, is owned by Disney, so the whole thing is really just a promotional tie in. I was like who the HECK watches this crap?
My wife said "Why do you think it's shown on a Saturday night in the middle of July?" They KNOW no one is going to watch it. It's pointless.
ESPN is one of the reasons I cord cut early. I NEVER watched it. If I watch sports, it's in market games, or what's available on broadcast.
The other night (a Saturday night, and yes me and Mrs. IIGS stay in Saturday nights because we're old, and like to be up early on a Sunday to drink coffee and watch the sun rise, but anywhoo) the "ESPYS" were on the local ABC affiliate. Which, is owned by Disney, so the whole thing is really just a promotional tie in. I was like who the HECK watches this crap?
My wife said "Why do you think it's shown on a Saturday night in the middle of July?" They KNOW no one is going to watch it. It's pointless.
ESPN is one of the reasons I cord cut early. I NEVER watched it. If I watch sports, it's in market games, or what's available on broadcast.
Disney lost about $8B since March 2020 due to Covid stuffand Disney+ still isn’t profitable.
After cutting cable a couple of years ago...my interest in sports has waned big-time! I'll watch the playoffs here and there (if they are actually shown on OTA TV). I used to be an avid MLB fan. Now I have no clue what's going on...I didn't even know today was the All-Star Game.
ESPN+ isn't even worth 5 bucks a month. Make it *everything* ESPN, and not just the ESPN3 rejects and every non-traditional sports event, and it might be worth $10-15 a month tops. Seems like a good many folks in this thread think ESPN+ has regular ESPN content on it. The cost of Disney+ and Hulu with ads combined is more than the bundle deal that also includes ESPN+, which is probably the only reason ESPN+ even somewhat succeeds.
Some are "permanent", some are limited. But Disney was limited that turned permanent, so we'll see.
I like the permanent Disney+ and Apple Music bundles. If Discovery and Arcade go away, so be it.
Hmmm…I have gigabit Fios and an unlimited 5G wireless plan, and so far my Disney+ promo is still time limited. May have to call and see whether I qualify for a permanent sub to D+.
I like the Discovery Immersions and the Alton Brown content, but most of Discovery+ is of little interest to me.
It’s the main reason I haven’t paid for cable TV in eons. When I read about how ESPN was essentially a premium cable channel in the basic bundle, I decided I wasn’t going to give them any of my money.
I will trade you my Disney+ for your Fios 😋
Disney+ is included with the play more and get more plans. https://www.verizon.com/plans/unlimited/
I may refuse to move to a place where I can’t get Fios, especially is Spectrum is the cable provider.
I have the Play More Unlimited plan, and I’m not seeing a permanent free Disney+ perk. May have to call and see what’s up.
Disney's ESPN division has likely been losing money in more recent years. ESPN for years was a massive cash cow due to cable/sat subscriptions (if you had a subscription it didn't matter whether you watched ESPN, you were paying ESPN about 5$ per month).
In 2020 cable/sat subscriptions dropped by 6million. That is on top of the notable drops in the last several years. If we say 10million lost in the last 4 years, that's 600 million per year that ESPN no longer collects in subscription fees.
Disney may own ESPN but a company doesn't act as a monolith. They act divisionally. If Disney parks, merchandising,TV are making profit A, it doesn't mean the Disney exec team will forget about loss B at ESPN division. Largely each division is on their own to make money or show a business plan to eventually make money. The division president is out of a job if neither one of those are achieved.
TV Networks including ESPN haven’t posted any financial losses. I don’t think anyone believes ESPN has lost money. ESPN still carries cable because sports are so popular. ESPN has UFC, MNF, NBA, and tons of other sporting events.
Many of the lost users switched to ESPN+ which is growing nicely (75% growth y/y). Disney+ is still in customer acquisition mode and profits will come. Cable is dying, but ESPN isn’t the reason.
My point was that Disney isn’t making money hand over fist due to the recent events which all but shut down several of their businesses completely or partially for the last 15 months. Media networks actually kept the company going during this time. Parks, cruises, movies, and Disney+ due to being in growth mode all lost the company money.
In fact, the most recent quarterly report credit higher net income partially due to “higher results at ESPN” confirming its profitable even as of today.
Last edited:
Whether you or I like ESPN or others do or don't isn't germane.
The content ESPN puts on is highly coveted by advertising, live sports, younger viewers that can't FF through commercials. It's the very best in advertising revenue in video media(TV). However, the cost of that content is massively outsized. What ESPN pays for its content is far more than any other channel, by a lot. NFL and NBA alone are probably above 4 billion for 2022. There's numerous other expensive sports leagues that will also add up a lot.
So what is ESPN's main revenue stream? It is cable/satellite fees. That has factually, not in dispute, declined substantially. In 2015 they collected annually 7.5 billion dollars in revenue from cable/satellite providers. It didn't even matter if every one of those subscribers didn't watch ESPN (a majority didn't but their demo number was still outstanding for live sports broadcasts). That was a guaranteed $7.5 billion. In 2015 there was about 95 million cat/satelite subscribers who were paying on average $6.60 per month -- about 8 billion per year.
Subscribers for cable/sat are now approximately 75 million (expected to keep dropping .75 to 1.5 million per year as far out as the estimates go). That is almost a 20 million subscriber drop, lowering the main revenue stream by approximately 1.5 billion dollars (again that was 100% guaranteed revenue). In today's sub fees that would be about 2 billion dollars.
Of those who have cancelled cable or satellite subscriptions, "most of them" have not signed up for or paying for ESPN+. That's just blatantly false. ESPN would be thrilled is they could get a 1 to 4 (they are very unlikely to). And even if they do, the revenue make up is unequal. ESPN+ in it's various forms to viewers (standalone, package) currently hovers around 13 million (that is world wide, the numbers above are US) with a most recent monthly average near $4.35. Understandable, freebies, reduced via bundle, and temp price reductions are used to try to attract new subscribers.
The decline of cable/satellite fees to ESPN has been hitting ESPN for several years now. I hate to see people lose their job but they have been laying off nearly every year for several years. It's about 2018 2%, 2019 1/3%, 2020 7% (this outsize was considerably Covid). Within that is lots of expensive on air salaries too. Operations cost must have been the norm at ESPN for several years.
As far as other channels, broadcasts and what Disney the full corporation does isn't material. Most cable/sat channels cost very little to no sub fee. Outside of TBS and a few others, most channels rely almost exclusively on advertising revenue. That is a hugely different thing than ESPN. Of course ESPN wants advertising too but unlike other channels, their largest by far revenue stream is mentioned above.
I know what I speak of as several years back I was moderately connected with advertising (specifically regarding demos- fortunately no longer, a very changing thing over the last few years). Take it FWIW...
I didn’t say most, I said many….and in all your rambling, you never provided evidence ESPN isn’t still profitable. If you’re not saying ESPN is losing money, then we agree.
I never said cable in general is as dominant as before. It’s not. I said ESPN is still hugely profitable and some of that business switched to ESPN+. I also said of the dying cable scene, sports are not the problem. Cable is crap because there is nothing on it BESIDES sports and the remaining subscribers largely keep it because of the sports content available at ESPN. Based on Disney’s earnings, ESPN is doing fine.
I think it’s a bit of an oversimplification to talk about whether ESPN is losing money. I don’t think ESPN is as “wildly profitable” as you claim. They’ve had revenue issues for years, and as the other poster laid out, the economics are growing challenging for them. They’re not replacing very profitable legacy cable subscribers with similar numbers of streaming subscribers, and their increased for outlays for content have seemingly outstripped any gains in revenues they made. Just because a company brings in boatloads of revenue doesn’t mean they’re profitable.
ESPN and ABC hit some revenue issues in Disney's third quarter, but less than other divisions, and ESPN+ now has 8.6 million subscribers
The overall state of Disney's media networks division, which includes ESPN and ABC, doesn't look bad. It's other parts of the company making headlines.
awfulannouncing.com
It is. Where do you think the operating income comes from? Discovery channel? It’s sports, overwhelmingly. You can see the profit in their earnings reports for media networks. Do you want me to pull the numbers? I never said revenue means profit. Streaming has good revenue and no profit…yet. However network TV is and has been very profitable, driven by sports on ESPN.I think it’s a bit of an oversimplification to talk about whether ESPN is losing money. I don’t think ESPN is as “wildly profitable” as you claim. They’ve had revenue issues for years, and as the other poster laid out, the economics are growing challenging for them. They’re not replacing very profitable legacy cable subscribers with similar numbers of streaming subscribers, and their increased for outlays for content have seemingly outstripped any gains in revenues they made. Just because a company brings in boatloads of revenue doesn’t mean they’re profitable.
ESPN and ABC hit some revenue issues in Disney's third quarter, but less than other divisions, and ESPN+ now has 8.6 million subscribers
The overall state of Disney's media networks division, which includes ESPN and ABC, doesn't look bad. It's other parts of the company making headlines.
Disney Media just put up 15% y/y operating income growth. Pandemic comparable aren’t as strong because sports took a hit, but that’s not normal. Linear networks have remained profitable throughout the pandemic, as the article you included points out.
At the media networks division, which includes ESPN and ABC, the story was a little different; revenues were slightly down (by two percent) year over year, dropping from $6.713 billion to $6,562 billion, but operating income rose from $2.136 billion to $3.153 billion.
There are timing reasons for the huge spike in growth, but it just shows how profitable it is either way.
Go find me a quarter media networks lost money and I may take you seriously.
Rambling? Great appeal to the nonsense. The losing tactic it is.
I did say and am saying ESPN lost money (which includes you are wrong). They have, it's a fact. But I did not say they are not profitable. Profitability is a far different formula of operational changes, cost cutting etc. And it isn't reported that I'm aware of as a line item in Disney earnings (if it is then I'm wrong on that). What Disney did say in it's quarterly: "The company said it does not expect Disney Plus, Hulu and ESPN Plus to achieve profitability until 2024"
ESPN has factually lost a tremendous amount of embedded subscriber fees that is in fact their largest revenue source. That's cannot be in debate because it is a fact. And notice in your amazingly well thought out response, you didn't mention everyone of those canceling their cable/sat subscriptions for streaming is "most going to ESPN+". An obvious falsehood easily proven so.
We can take Apple as an example (I'm sorry if the rambling of facts confuses you again):
Their main revenue is iPhones at approx. 65% average of revenue over 5 years. They lose 20% of that revenue with projections for it to continue to go down at almost 2% a year. Yea, sure, Apple isn't losing money (evenue, income, call out whatever you want). Now Apple can cut staff and maximize revenue streams to continue to turn a profit.
Rambling but clear enough?
Fyi, Disney stock is a very good buy. That is not because of ESPN division.
The numbers prove you’re wrong. Look at the earnings reports. I own a lot of DIS under $40 and look at the reports regularly.
I NEVER said ESPN+ is profitable. In fact, I originally said all of direct to consumer is currently non profitable. Cable TV which includes ESPN is and has been extremely profitable, driven by sports. They say it all the time.
In fact, the 2020 Annual Report specifically calls out ESPN.
Segment Operating Income
“Segment operating income increased 21%, or $1,543 million, to $9,022 million due to the consolidation of TFCF and increases at ESPN…”
Yeah, the $9B in operating income isn’t ONLY ESPN, but we don’t have a breakout specifically for it. It was however strong enough for them to call it out as one of the reasons for the growth, even during a pandemic.
Like I told the other guy, find a quarter traditional cable was not profitable, as in negative operating income, and I’ll take you seriously.
I have a master’s degree in finance and do it for a living at a company bigger than Disney.
Last edited:
The numbers don’t really prove anything, since we don’t have a specific breakout.
The reality is this…ESPN is paying increasing premiums for content and continuing to lose their cash cow linear cable subscribers. Their content spend is also generally locked up in long-term deals, so they lack flexibility to pivot or renegotiate. What’s their play? Direct to consumer?
Cable subscriber losses have accelerated in the last few years, which is going to place increasing pressure on cable providers to take a hard look at their own deals with the cable channels. Those losses are expected to take cable subscribers from just under 80 million to 50 million by 2025.
I have a bachelor’s in finance and an MBA, and have done finance at a Big 4 Consulting firm. What’s your point?
They do when they specifically call it out and everyone knows sports dominate cable TV. The rest of cable TV is essentially dead.
No one is arguing there hasn’t been cable subscriber loss, but it hasn’t impacted their profitability in the segment. Sports demand huge numbers And Disney owns a lot of the sports market with ESPN.
ESPN is the most profitable (at least top 2-3 depending on estimate) channel on cable according to analysts and is the most valuable brand on TV. We also know cable is Disney‘s most profitable business unit, so you do the math. They’ve been able to raise fees to make up for the subscriber loss as indicated by higher profits despite losses in ESPN subscribers due to cord cutting.
They will also have 20-30M ESPN+ subscribers in 2 years And currently have 12M. ESPN is doing fine bc people love sports And consume them more than anything on TV.
Big 4 is more accounting, but my point was I know how to read a financial statement and have read Disney’s because I own the stock. I’ve also worked at the best of the Big 4.
Last edited:
If the rest of cable TV is dead, ESPN is also dying and they don’t know it yet. The issue isn’t whether people love sports. The issue is how long the economics continue to work. ESPN dropped 2/3 of their exclusive MLB regular season games when negotiating their latest deal. The NFL is still negotiating as if their ratings aren’t softening, and they just locked in a new 10-year deal that featured an 80% increase over the prior deal.
Those 20-30M ESPN+ subscribers will still represent a significant decrease in revenue over the anticipated 20-30M linear subscribers they’ll likely lose over that same period. An ESPN+ customer is worth about half what a linear ESPN subscriber is, and it’s probably less than half when accounting for advertising revenue on ESPN. Factor in password-sharing, and Disney probably needs 4-6 ESPN+ subscribers for every linear cable subscriber they lose. The cable companies are absolutely hosed because they’ll be pushed into a “damned if they do, damned if they don’t” situation. At 50 million subscribers, they’ll either need to negotiate lower fees to ESPN or explore moving ESPN from their basic tier, which could accelerate their decline into a death spiral.
Whatever happens, it probably isn’t good for the average sports fan.