US media and entertainment giant Disney has unveiled that its ESPN sports heavyweight will launch a flagship streaming service by the latter part of 2025.
This comes a few days after Disney, along with fellow US heavyweights Fox Corp and Warner. Bros Discovery (WBD) announced the formation of a joint-venture streaming service that will combine the trio’s respective sports offerings into one over-the-top (OTT) service.
Now, in announcing the Disney financial results for the first quarter of the 2024 financial year (Q1) on February 7, the media giant has outlined how ESPN will act as a standalone streaming service from the latter half of 2025 (potentially as early as August next year) onwards.
Bob Iger, chief executive at Disney, said on that front: “Not only will consumers be able to stream their favorite live games and studio programming, they’ll also have access to engaging digital integrations like ESPN Bet and fantasy sports, e-commerce features, and a deep array of sports stats — all of which we know will be incredibly compelling to younger sports fans in particular. It will also have very robust personalization features.”
He added: “This is all part of the ambitious streaming strategy we’ve been building. From our acquisition of 21st Century Fox which expanded our vast content library and strong pool of creative talent, to the launch of Disney+ [the in-house streaming platform] as the home to a century of content, to securing full control of Hulu and expanding our streaming offerings to reach greater audiences, to our significant investments in technology, and now taking significant steps toward ESPN’s streaming future.”
This unveiling came alongside the Q1 financials - which showed that revenues were essentially unchanged from the equivalent financial quarter in 2023, now amounting to $23.54 billion as opposed to $23.51 billion the prior year.
Net income attributable to Disney, meanwhile, came to $1.91 billion, up year-on-year from $1.28 billion.
Disney’s sports revenues (mostly coming through the sports heavyweight ESPN) amounted to $4.83 billion, up year-on-year by 4% from $4.64 billion. That sector sustained a loss of $164 million, although this was a 37% improvement year-on-year.
Both domestic and international sports-related income rose slightly, with the Star India broadcaster in particular experiencing significant financial gain - its revenue for Q1 was up 71% year-on-year. Conversely, however, Star India also recorded vastly increased losses.
The domestic (US) growth was partly caused by changes to the timings of various college football playoff games, while despite the aforementioned growth in international sports network revenue, that segment still saw losses increase.
Disnet’s direct-to-consumer financials, meanwhile, saw a 14% revenue increase year-on-year, from $5.3 billion to $6 billion, while the operating loss decreased significantly, from over $1 billion to $216 million.
In terms of how DTC subscription numbers compared on December 30, 2023, to September 30 last year, domestic subscriptions took a 400,000 dip, while international numbers (excluding the Hotstar service in India) were down by 900,000.
However, Hotstar saw its numbers rise, from 37.6 million to 38.3 million, while there was also a rise in the amount of revenue generated per user, because of subscription costs rising.
Disney also said that they are on track to “meet or exceed our $7.5 billion annualized savings target by the end of fiscal 2024, while we continue to look for further efficiency opportunities.”
The media and entertainment giant added that it expects earnings per share in 2024 of around $4.60, which would represent an increase of at least 20% from 2023.
Returning to the ESPN streaming announcement, Disney already has a sports streaming service in ESPN+, which ended Q1 with 25.2 million subscribers. However, that service does not broadcast live coverage of many of ESPN’s most popular sporting properties.
Iger, in an interview with CNBC, said that the two services - the joint platform with Fox and WBD, and the new ESPN service - will offer different content and features.
On the joint platform, he commented: “Our mission is to make ESPN into the preeminent digital sports brand … One way will be through the new streaming sports service coming this fall that we announced yesterday in conjunction with Fox and WBD. This service will bring together our collective portfolios of sports channels and direct-to-consumer services – on a non-exclusive basis – providing consumers with more of the sports they want in a single place."
The joint service, as yet unnamed, will combine the sports offerings of Fox’s Fox Sports channels, Disney’s ESPN set of channels, and WBD-owned TNT Sport, among other offerings.
Once active, the service will broadcast offerings from all of the US’ major properties, namely American football’s NFL, baseball’s MLB, basketball’s NBA and WNBA, ice hockey’s NHL, soccer’s MLS, and motor racing's NASCAR.
The sports content will be licensed to the service by each of the three companies on a non-exclusive basis, allowing them to maintain their linear output streams.
The service is scheduled to launch in the latter months of 2024, with each of the three joint-venture partners holding a third of the stake each, and having equal representation on the board. Details such as pricing and format will be revealed closer to the product’s launch.
Finally, Disney has also unveiled a partnership with video game developer Epic Games, through which it will invest $1.5 billion in that firm.
Disney and Epic Games will work together on creating and developing new games.
Speaking to CNBC, Iger said the investment represented “probably our biggest foray into the game space ever.”
He added: “This marks Disney’s biggest entry ever into the world of video games, and offers significant opportunities for growth and expansion,” he said. “The new immersive universe will allow fans to unleash their own creativity and experience the Disney stories and worlds that they love in groundbreaking new ways.”
