Disney is losing pay TV subscribers but it has a contingency plan in place

[Shawn Knight]

Why it matters: Disney isn't the only company to feel the effects of cord cutting but because ESPN is a part of most cable packages, its performance serves as a somewhat accurate barometer of the industry as a whole. Fortunately for its sake, Disney saw this coming and has a plan in place.

The Walt Disney Company in a recent Form 10-K filing with the US Securities and Exchange Commission revealed that it has lost an estimated two million domestic ESPN subscribers in the past 12 months, from 88 million a year ago to 86 million this year.

The Disney Channel, Disney Junior and Disney XD all saw subs drop by roughly three million year-over-year.

The figures come courtesy of Nielsen Media Research and highlight the ongoing struggles facing traditional broadcasters as a result of continued cord cutting.

Disney, however, is well aware of the changing landscape and has a contingency plan in place. The entertainment giant earlier this year launched ESPN+, a direct-to-consumer subscription streaming service that offers a wide array of sports coverage. The company bolstered the offering a few months later through a multi-year agreement with the UFC that starts in January.

Disney is also in the process of buying much of 21^st Century Fox as part of a deal valued at $71.3 billion, beating out Comcast for the lead over the summer.

Disney’s most substantial ammunition will arrive in late 2019 in the form of Disney+, another streaming service that’ll serve as the exclusive home to many of Disney’s hit franchises.

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https://www.techspot.com/news/77550-disney-losing-pay-tv-subscribers-but-has-contingency.html

 

[toooooot]

Wake up sheeple! The model of distribution where you have to watch the same amount of ads with your content isn't one that can sustain.

 

[Uncle Al]

AND having a channel that lacks some of the other basic's that most of the other services offer just stops you from being competitive. Since Microsoft bought Youtube their system has steadily declined with an abundance of reruns but not a lot of new programing, causing it to start slipping .....

 

[m4a4]

Since Microsoft bought Youtube

...Do you mean Google?

 

[EClyde]

Disney? Until they rerun Spin and Marty I ain't watching

 

[wiyosaya]

Time will tell how their plan works. There was an article in the Wall Street Journal this past week about how most traditional pay TV services are losing customers.

Part of the problem is that sports are included at great cost in the packages even if people have no interest in sports.

I think it is a good idea for them to spin off ESPN to a streaming service - it is getting more like the ala carte that people want. I am not a general sports fan, so I have no interest in subscribing to ESPN's streaming service; however, all I can say is that they better price it right, or there is a chance that it, too, will not do as well as Disney would like.

From the WSJ article - subscribers to the streaming services that the traditional providers are setting up are no where near enough to make up for the losses to those traditional streaming services.

To me, it looks like the industry is getting its wake-up call. Whether the industry hears it or not and responds appropriately is the big question. So far, the response from the industry, based on subscribers to streaming services put in place to make up for the loss of traditional services, sounds completely lack-luster.