Disney, Warner Bros. Discovery, and FOX surprise the market by joining forces to launch a comprehensive sports streaming platform
By: Lauren Cuppy
February 20, 2024
Photo Credit: Yahoo Entertainment
On February 6th, three competitors came together in an unexpected way to announce a new streaming platform. Rather than competing against each other for market share and subscribers, Disney, Warner Bros., and Fox have changed the game of sports streaming. Gone are the days of managing multiple subscriptions and switching between multiple apps to find the game. Now, the trio is offering an (almost) all in one stop for sports streaming. Disney, Warner Bros. Discovery, and Fox are to launch this collaboration in the Fall, claiming to provide 15 networks and all four of the major professional sports leagues. Among these networks are ESPN, TNT, and, the Big Ten Network.
Despite this collaboration, however, Disney is still intending to offer the option for a “stand-alone ESPN streaming app for those who don’t want the all-in-one bundle from the three companies'' (WSJ). Furthermore, subscribers have the ability to bundle the product with Disney+, Hulu, and/or HBO Max. Although a name and pricing model has not been released, the three companies are to each own one third ownership in the venture, equal board representation, and license their content on a non-exclusive basis (ESPN). Despite the evenness in terms of ownership, Disney spends more on streaming rights than both Fox and WBD, raising questions surrounding how costs will be divided. Furthermore, this new service would have a new brand and is to be accompanied with an independent management team (ESPN).
According to the Wall Street Journal, “Citi analysts expect the new service to encompass about 55% of U.S. sports rights, according to a note published Tuesday.” This proposes skepticism surrounding the legality of the venture. Since the unnamed platform was created by three competitors joining forces, a huge debate is whether or not the venture is anti-competitive, therefore in violation of antitrust laws. These laws are in place to promote competition within different industries and prevent monopolistic behavior. The federal government will have to answer this question, but consumer preference and convenience will factor into this decision, holding heavy weight (USA Today).
Although a pricing model has not been released, this service is predicted to cost around $40/month, and a price point of $30/month would be needed to break even. This steep price raises concern, as studies conducted in September revealed that 30% of survey respondents said they would not pay for a pure sports streaming service, whereas only 20% would pay above $20 a month (Yahoo! Finance).
As many viewers are pulling the plug on cable services and switching to an all-streaming lifestyle, this deal comes at a pivotal time that could finally pull consumers away from cable television (WSJ). The combined service is also capable of shaking up the current streaming industry – will platforms such as NBCUniversal and Paramount collaborate as well? As more details come out surrounding the venture, it will be fascinating to see how the three companies will work together and develop their product.
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